A U.S. crypto crackdown could be coming
Future. Crypto seems to be on top of the world. Bitcoin recently hit an all-time high price of $61,200, and the popular crypto exchange Coinbase is set to go public this week valued at roughly $100 billion. But there may be trouble in (decentralized) paradise, after all: One CEO of a prominent crypto exchange believes there could be serious U.S. crypto regulations around the corner.
Crypto is soaring… but it could still have its wings clipped
Jesse Powell, the CEO of Kraken (a crypto exchange that competes with Coinbase), told CNBC earlier this week that he thinks there could be a U.S. government crackdown on cryptocurrency.
According to Powell, regulatory uncertainty won’t disappear just because a handful of crypto companies hit public markets. Instead, he said, the government could choose to create more new regulations as crypto becomes more commonplace.
- As an example, Facebook ran into a number of regulatory roadblocks after it announced its crypto project, Libra, in 2019. Since then, it has significantly scaled back its ambitions.
Could the government kill crypto? And would it?
Technically, the government could impose a number of regulations that threaten the continued growth of crypto: Recently, the U.S. government proposed an anti-money laundering rule that would force anyone who owns more than $3,000 worth of crypto to undergo identity checks — which would throw a big wrench into existing crypto systems.
The U.S. government isn’t the only government that has considered (or even implemented) strict crypto regulations:
- South Korean legislators recently announced plans to further regulate crypto in what it called an “overheated market.”
- In India, the government is going a step further and considering a law that would ban cryptocurrencies outright and punish anyone holding them.
For now, crypto will remain regulated in the U.S. predominantly by state governments and not the federal government. The state of New York has required cryptocurrency investors to hold “BitLicenses” since 2015, and the state remains one of the toughest regulators in the country.