Are you a supporter of cryptocurrency regulations? Do you trust government entities like the CFTC, SEC, FBI, and IRS to protect the best interests of Bitcoin? Are you hoping for regulations that benefit investors? It’s understandable if you hold these positive and optimistic beliefs.
Crypto regulations or crypto control?
Over the past year, figures like CZ and Binance have faced significant challenges from the SEC and CFTC. Following a settlement of $4.3 billion with the SEC, the U.S. Department of Justice (DOJ) is now recommending a three-year prison sentence for Changpeng “CZ” Zhao for his involvement in enabling the crypto exchange to violate federal sanctions and money laundering laws.
The DOJ has submitted a sentencing memo requesting a 36-month prison term and a $50 million fine for violating the Bank Secrecy Act, to which CZ pleaded guilty in November. In response, CZ’s defense team submitted their own memo proposing probation, potentially including home confinement in Abu Dhabi, where he resides.
A well-known crypto analyst, Crypto Tea, expressed his thoughts on the matter, stating, “The FBI calls crypto money so they can arrest you for money laundering… the IRS calls it property so they can tax you on capital gains… the SEC calls it a security so they can sue every exchange… the CFTC calls it a commodity so you can’t use it as a currency.” This highlights the different perspectives and intentions of these organizations regarding crypto regulations.
Binance co-founder He Yi emphasized that while CZ acknowledges his mistakes, his biggest one was ignorance. He believes that the rest of the crypto community should not make the same mistake.
So, what exactly do the SEC, CFTC, DOJ, FBI, and IRS want in terms of crypto regulations?
In a hearing titled ‘Oversight of the Securities and Exchange Commission,’ the House Financial Services Committee invited SEC Chair Gary Gensler as the sole witness. During a recent SEC Oversight hearing in Congress, Chairman Patrick McHenry engaged in a heated exchange with Gensler regarding the classification of Ether as a security or a commodity.
These hearings have repeatedly focused on questions about Bitcoin and Ether, indicating that policymakers are still unsure about the appropriate regulatory approach for these top digital assets given their market size.
The crucial question is whether Congress should take action to establish a regulatory framework that builds confidence in consumers, investors, and businesses regarding digital assets.
What is evident is that each of these entities stands to benefit from crypto. How? Through paid fines, as seen in CZ’s case, and through influencers like Kim Kardashian. Additionally, they profit from confiscated digital assets obtained through illegal seizures, such as the Silk Road case.
But the biggest win for these entities? Absolute financial control. Bitcoin’s advent introduced decentralization, taking away financial control from centralized entities like the ones mentioned above.
While these regulatory bodies claim to assist with crypto regulations, they are ultimately consolidating money and power in Washington, D.C. Make no mistake, the regulations will favor the regulators more than the crypto investors.
