The exponential growth of bitcoin and the entire cryptocurrency sector has caught the attention of global regulators, noted Kraken’s CEO, Jesse Powell. Speaking to CNBC, the executive warned of potential crackdowns, especially after the threats coming from the US government.
Regulatory Crackdowns on the Crypto Industry?
The cryptocurrency industry has been on a roll since mid-2020. Led by bitcoin’s massive increase, the explosion of NFTs, the growth of DeFi, and many more, the cumulative market capitalization of all digital assets has expanded by 600% to well over $2 trillion.
Naturally, such impressive advancement cannot go unnoticed. Somewhat expectedly, the US was among the first to react. The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) proposed what seemed as rushed new rules, which were postponed due to lack of time and clarity, while the Treasury Secretary, Janet Yellen, has frequently breached concerns on lack of proper legislation.
Jesse Powell, the CEO of the veteran US exchange Kraken, also touched on this narrative in a recent CNBC interview. He believes “there could be some crackdown” and was especially worried about FinCEN’s proposal suggesting that people holding crypto assets in private digital wallets need to verify their identities if they make transactions worth $3,000 or more.
“Something like that could really hurt crypto and kind of kill the original use case, which was to just make financial services accessible to everyone.” – he asserted.
Shortsighted Approach by the US
Although Powell didn’t provide specifics on what adequate regulations should be, he indicated that the US is somewhat “shortsighted” when it comes to the crypto industry. Additionally, he believes that the world’s largest country by nominal GDP can take a page out of other nation’s playbooks.
“I hope that the US and international regulators don’t take too much of a narrow view on this. Some other countries, China especially, are taking crypto very seriously and taking a very long-term view.”
However, he dismissed the potential ban of cryptocurrencies as “it might be too late.”
“Maybe the genie’s out of the bottle and just trying to ban it at this point would make it more attractive. It would certainly send a message that the government sees this as a superior alternative to their own currency.”
With the aim of lobbying for fair regulations, some of the giants involved in the industry, such as Fidelity, Coinbase, Square, and Paradigm, formed a crypto council earlier this month.