US Congressman Byron Donalds criticized the country’s regulatory agencies on April 12 at the NFT.NYC 2023 conference in New York. According to Donalds, agencies such as the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC) and others are being used to trigger “Operation Choke Point 2.0.” limiting the access of cryptocurrencies to banking services.
Operation Choke Point 2.0 describes the alleged coordinated effort by the US government to discourage banks from dealing with cryptocurrencies under the guise of ensuring security and stability. Cryptocurrency industry commentators believe that government attempts to restrict access to the cryptocurrency sector have intensified in 2023.
“What I have seen in my short time in Congress is that nothing is a coincidence with the government agency,” the lawmaker said during a keynote address, referring to the recent US government crackdown on cryptocurrencies. “They’re talking between the lines a lot more than they used to. They’re finding various ways to squeeze out a result that they want.”
Along with efforts to limit the banking system’s exposure to cryptocurrencies, Donalds believes the Federal Reserve is “laying the groundwork for a CBDC,” or central bank digital currency, with recent enforcement actions being part of the plans for a digital dollar.
The Florida congressman also noted that the United States government does not have enough knowledge about cryptocurrency to properly regulate it and, through its agencies, is relying on a “100-year legacy framework” to create rules and regulations for today’s needs. . “To put ourselves in lay terms, […] This will be like asking a sixth grade basketball player to officiate in the NBA Finals.” he said before urging an updated regulatory environment for digital assets.
Donalds also called SEC Chairman Gary Gensler a “very arrogant individual,” stating that “he thinks he is the smartest person”. Donald’s continued:
“Old Washington, which is basically today’s Washington, loves to have the alphabet soup agencies. […] They’re all relics from a time when you had to send faxes before fax machines. That’s when regulatory agencies were created. Old Washington, like anyone else, doesn’t like to budge from what he created.”
Helping regulators understand the nuances of digital assets, blockchain and cryptocurrencies in general is necessary for a better environment for cryptocurrencies in the country, according to the congressman.
US authorities appear to have resurrected coercive tactics from the past to impose restrictions on cryptocurrency companies and the banks that serve them. The alleged strategy consists of isolating the traditional financial system from the cryptocurrency market by using “multiple agencies to discourage banks from dealing with cryptocurrency companies”, with the aim of driving cryptocurrency companies to become “completely unbanked”, sources told Cointelegraph in early February.
Recent reports reveal that the US arm of Binance has been facing difficulties establishing a new banking partner to serve as a fiat on-ramp and off-ramp for its clients in the country. The recent bankruptcies of Silvergate and Signature Bank left Binance.US without banking services, relying on intermediary banks to store funds on its behalf.
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