A Democratic presidential candidate is challenging the rising anti-crypto sentiment within his party by attributing regulatory agencies’ “war on crypto” for several bank failures that occurred in March. Recently, environmental lawyer Robert Kennedy has voiced his concerns over the Biden administration’s management of the ongoing banking crisis, opposing the bailout approach used by financial agencies.
Kennedy supported an article written by Ellen Brown titled “How the War on Crypto Triggered a Banking Crisis.” The piece detailed how actions taken by the Federal Deposit Insurance Corporation (FDIC) and Securities and Exchange Commission (SEC) contributed to the collapse of Silicon Valley Bank (SVB), Signature Bank, and Silvergate Bank in March. The presidential candidate argued that the FDIC and SEC have no authority to wage an extra-legal war on crypto that leaves significant banks as collateral damage.
The crypto community has expressed its concerns about a suspected government conspiracy, informally known as “Operation Chokepoint 2.0,” which attempts to discourage the banking sector from servicing crypto companies and intimidate blockchain businesses with unclear and arbitrary enforcement actions. Caitlin Long, CEO of the crypto-friendly Custodia Bank, claimed last April that the SEC is penalizing crypto firms attempting to be compliant by providing a blatant signal to stay away from the industry. Coinbase CEO Brian Armstrong has also suggested that Coinbase might consider relocating its headquarters outside the United States if local regulatory challenges persist.
This ongoing situation has caused some politicians to criticize the SEC’s “regulation by enforcement” approach, but support mainly comes from the Republican side. On the other hand, Congressional Democrats are increasingly skeptical of the crypto sector and questioning its legitimacy.
Furthermore, the White House published guidance to Congress encouraging the passage of a 30% excise tax on Bitcoin mining as part of the federal budget to make miners pay for the “economic and environmental costs” they impose. In response to criticism for defending crypto, Kennedy promised to write about the energy consumption issue, assuring that the critique is a “misunderstanding.”
Kennedy has also opposed Central Bank Digital Currencies (CBDCs), which traditional crypto proponents often criticize for invading privacy. The presidential candidate argued that a CBDC tied to a digital ID and social credit score would enable the government to freeze assets or limit spending to approved vendors in case of non-compliance. These comments were in a specific reference to the central bank’s new FedNow payments service, which the Federal Reserve later clarified is “not related to a digital currency.”