US Democratic Presidential Candidate Blames Regulators’ War on Crypto For Recent Banking Crisis

A recent comment by a Democratic presidential candidate suggests crypto still has some political figures supporting it. 

An environmental lawyer and Democratic presidential aspirant, Robert Kennedy, spoke against the government’s crypto regulatory war that caused the collapse of prominent banks.

Kennedy’s statement came amid a rising banking crisis and heightened regulatory crackdowns as the SEC and other regulators hunt down crypto firms. 

Banks Became Collateral Damage in the War Against Crypto, Says Kennedy

In a May 2 tweet, Kennedy commented on an Ellen Brown article, tagged “How the War on Crypto Triggered a Banking Crisis.”

The article highlighted how the actions of the Federal Deposit Insurance Corporation (FDIC) and Securities and Exchange Commission (SEC) revved up a banking crisis, leading to the collapse of Signature Bank, Silicon Valley Bank, and Silvergate Bank in March. According to Kennedy, the FDIC and SEC lack the jurisdiction to wage an extra-legal war on crypto, leaving top banks as casualties.

In recent months, top crypto industry players frequently protested against an alleged government conspiracy informally tagged Operation Chokepoint 2.0. The so-called conspiracy is an effort by regulators to discourage the banks from servicing crypto firms. It also includes the attempts to repel blockchain-related businesses from the US with oppressive enforcement actions.

In April 2022, the CEO of Custodia Bank, a US-based crypto-friendly bank, Caitlin Long, claimed the SEC punishes crypto firms who push for compliance with deliberate stay-off signals. The statement aligns with Coinbase’s complaint about its experience while seeking regulatory guidelines from the SEC.

These repulsive actions are gradually pushing crypto and blockchain firms from the US. Coinbase CEO Brian Armstrong hinted that the crypto exchange might move its headquarters outside the United States should the regulatory uncertainties remain.

Kennedy isn’t the only one kicking against the move on the crypto and banking crisis. An ex-US congressman and Signature Bank’s board member, Barney Frank, claimed the bank’s closure was uncalled for. Frank believes Signature Bank’s closure aimed to dissuade other banks from dealing with crypto firms.

Anti-Crypto Moves By US Authorities

Although some pro-crypto politicians have called out the SEC for its regulation by enforcement approach, many were Republicans. 

In contrast, several congressional democrats have constantly kicked against crypto to the extent of doubting the legitimacy of its use cases. On many occasions, Senator Elizabeth Warren and others have led several anti-crypto campaigns.

Last year, Warren and other senators wrote to the EPA seeking to probe crypto mining energy consumption and its environmental impact. In September last year, the White House announced that crypto miners must share mining energy consumption data with regulators.

While the anti-crypto sentiment continues to grow, the White House’s Council of Economic Advisers proposed a 30% tax excise on Bitcoin mining. They claimed the tax is part of the federal budget to hold miners accountable for their operation’s economic and environmental impact.

Kennedy’s Pro-crypto Comments Meets Criticisms

As much as Kennedy’s crypto-pro tweet excited the crypto community, it met criticisms. A respondent criticized the presidential aspirant for supporting crypto. He questioned Kennedy’s credentials as an environmentalist supporting crypto, considering the large amount of energy the technology consumes. 

Responding to the criticism, the environmental lawyer said the critic’s comment was a misunderstanding, promising to write about it later this week. 

But that wasn’t the first time Kennedy criticized the government. He previously kicked against Central Bank Digital Currencies (CBDCs), a government-backed digital fiat frequently condemned by crypto proponents as an invasion of financial privacy.

In an April tweet, Kennedy argued that a CBDC tied to a digital ID and social credit score would give the government access to private financial information. Such will allow the government to freeze citizens’ assets or limit their spending on approved vendors for failure to comply with arbitrary laws.

The presidential candidate’s comments referenced the Fed’s FedNow payment service, which the monetary authority later clarified as unrelated to a CBDC.