Cryptocurrency

The March 2023 collapse of Silicon Valley Bank (SVB) — aside from foregrounding the hypocrisy of neoliberal pundits and libertarian venture capitalists alike — spotlighted the instability of the cryptocurrency industry’s most ostensibly stable offering. Hidden within the uncertainty of SVB’s fate following a $42 billion withdrawal frenzy was a similar crisis of confidence for Circle Internet Financial and its stablecoin, USD Coin (USDC).

As of now, Barr is assigned to investigate supervisory failures that occurred under his watch featuring a bank that catered in particular to the crypto and fintech industries which Barr was so active in immediately prior to revolving back into government. Barr is a walking conflict of interest. His central role in the investigation is damning

The Bipartisan Group That Once Defended Crypto Firms From SEC Investigations May Have Gone Silent In Recent Months, But Their Crypto Loyalties Remain.

The media must stop treating Summers as an impartial expert and recognize how he uses his status in the economic media to provide credibility to corporations.

Considering how much of the financial press eagerly solicits Summers’ take on every imaginable economics topic, it’s bizarre that no reporters have gotten his thoughts about his involvement in this crumbling company, and the asset class it promotes.

The FTX disaster should be all the impetus needed to kill off any new crypto industry–approved legislation. Instead, we need Congress to provide material support for financial regulators in the form of increased appropriations to guard against the next collapse. Much of the crypto industry is already subject to laws—the very ones that the SEC seeks to enforce and that the crypto industry broadly (not just Sam Bankman-Fried) seeks to evade by reducing the SEC’s jurisdiction ex post facto. Both the CFTC and SEC urgently need funds to fulfill their mandates. Crypto stretches these needs even further, but the need has existed for years. For decades, financial crimes have too often gone unpunished. This wasn’t for a lack of rules, but a lack of will, funds, and people willing to enforce them. Crypto doesn’t need special treatment, it needs to face the music.

At a critical juncture such as this where the industry seeks kid-glove treatment from regulators, backgrounds such as Harris’s should be disqualifying.

The rapid meltdown of FTX stands as one of the most gruesome chapters in the annals of investment fiascos: think of the false technological promises of Elizabeth Holmes’s Theranos grift combined with the evaporation of Bernie Madoff’s prestigious Ponzi fund. But the saga of FTX involves much more than either the vanity and hubris of Holmes’s fraud offensive or the deceptive practices of the Madoff scam. The rapid rise and fall of Bankman-Fried points up the delusional character of information-age capitalism; Far from standing as an outlying trend within the crypto investment world, Bankman-Fried’s scam was nestled at the very heart of its prevailing business model.

Boosters of Ponzi products should not be granted the freedom to tout their products without ample pushback and skepticism. Because, as is all too common in Washington, when this media cover is combined with other forms of political pressure including lobbying and campaign donations, industry interests take precedence over the public’s. Politico knows where to find skeptical voices; they had Healthy Markets President and CEO Ty Gellasch on the panel that followed Alderoty’s remarks, albeit alongside three other preachers of crypto’s so-called greatness.

Government officials in Congress and at independent agencies like the CFTC should focus on protecting consumers and ignore any entreaties from their former colleagues who now represent the industry’s interests.

Better still, the government could consider more aggressive action. Application of existing law would bring some stability to the stablecoin space, but there is one more simple and effective option: banning them outright. Stablecoins are an essential component of a deeply fraudulent industry that is financially and environmentally destructive. Guaranteeing their existence is an unnecessary risk.