US government agencies are increasingly under fire for their active hindering of the crypto industry and its users.
Acting under all-terrain pretexts of fighting money laundering and tax evasion, agencies like the Treasury, the SEC, or the Fed, have been overtly ill-disposed to crypto for a long time.
Last year marked a whole new level of hostility : the SEC filed a lawsuit against Ripple (judged frivolous by many), the Treasury included Tornado Cash smart contracts into the OFAC list, the Fed called crypto a menace to financial stability…
Public opinion used to be on their side: the many narratives linking crypto to criminal use or get-rich-quick schemes did their job… and most people who absorbed these one-sentence myths didn’t go as far as reading multi-pages reports refuting them.
? Recently, however, it seems like the tide is turning, and crypto proponents’ voice is getting louder.
? In September, six Tornado Cash users filed a lawsuit against the Treasury, backed by Coinbase.
? Yesterday an eminent crypto advocacy group Coin Center filed another one, this time against Janet Yellen (Treasury Secretary) and Andrea Gacki (OFAC Director) personally.
Both lawsuits call the Treasury’s actions unlawfully hindering users’ privacy – and that is a very dangerous thing in a transparent environment which is blockchain.
? The SEC is facing an increasing indignation from the judges assigned to the Ripple case for its “hypocritical tactics”. It is also regularly accused of (still!) not giving the industry a clear definition of what cryptoasset it considers security.
? On Tuesday, the Fed got slammed by Caitlin Long, founder of Wyoming-based crypto bank Custodia Bank (ex-Avanti), who accused it of favoritism.
Custodia applied for a master account at the Fed (to enable all traditional banking functions) 2.5 years ago, but the Fed hasn’t yet processed it.
The bank filed a lawsuit for “potentially unlawful delay” in June, but, almost as if to mock it, the Fed has recently given an approval to BNY Mellon to provide crypto custody services.
America’s largest bank surely has its ways around Federal agencies, but the stunning difference of treatment has got people talking.
It may take more than that to protect the crypto industry and its users from over-reaching regulations, but it’s a good start.