Skip to main content

Biden's Executive Order On Crypto explained | Is it Good or Bad for Crypto ?

Photo by Karolina Grabowska

Biden Executive Order is Good or Bad for Crypto ?

Well It’s bad , if the recent crypto headlines didn't make it clear enough. It's clear that the SEC is following the orders of ESG obsessed institutional investors and anti-crypto politicians, especially those who are part of the subcommittee that held this hearing, as Tom Emma said however, a new day is coming You can also check the google web story by cryptolibrarynow for a quick overview of the topic by clicking on me.

As Crypto continues to crash , regulators around the world are taking advantage of the chaos to begin clamping down on the industry, while investors have their backs turned from being burned in the United States, the SEC(U.S Security and Exchange Commission) has begun a full on assault on cryptocurrency, and a recent hearing with the SEC's head of enforcement suggests that the orders to kill crypto. Are coming from higher up. Today I'm going to give you a bit of background about the hearing, summarize what was said in simple terms, reveal who is calling the shots and what it could all mean for the crypto market. Before I proceed, there is a disclaimer  I am not a financial advisor , nor will I ever be. This article is written only for educational purpose only, so please contact a financial advisor if financial advice is what you need . If you're new here, you might be feeling a little bit lost right ? My name is "MrCrypt "and I am your crypto geek here at the cryptolibrarynow. I pass on the knowledge of cryptocurrencies, exchanges, DeFi, protocols, NFT's and market analysis are just a few of the topics I tackle on the daily basis. Now enough with the intro. Let's get it on , Let's unpack this hearing . 

SEC Hearing -:

If you're unfamiliar with the SEC, here's what you need to know. The Securities and Exchange Commission or SEC, is one of the most powerful financial regulators in the United States. It overseas the issuance and trading of securities, which includes assets like stocks and bonds, hence the name. The SEC is currently headed by Gary Gensler, who spent most of his earlier career at Goldman Sachs, where he oversaw multiple billion dollar deals. Gary went on to become the chairman of the Commodities Futures Trading Commission, or CFTC, another powerful financial regulator in the United States. Prior to joining the SEC, Gary was a professor at the Massachusetts Institute of Technology, or MIT, where he taught courses in financial technology, including cryptocurrency. You can actually find Garry's full cryptocurrency course for free here on YouTube, and it's worth checking out if you have the time. Now when Gary became chairman of the SEC last spring, many believed that his previous crypto experience would translate into pro crypto regulations from the agency. But so far it's been the opposite. Over the last year or so, the SEC has been cracking down on crypto projects and is reportedly beginning to crack down on cryptocurrency exchanges as well. This might have something to do with the fact that Gary seems to believe that every cryptocurrency except BTC is a security including stable coins. Not surprisingly, this has resulted in lots of pushback from the crypto industry and pro crypto politicians who have pointed out on many occasions that Garry's beliefs and the SEC's actions are inconsistent with the SEC's own criteria about which assets count as security  While the expectations of profit for some cryptocurrencies can in fact be traced back to certain individuals and institutions, the origin of these expectations is much harder to identify for cryptocurrencies such as Ethereum. ETH, which is quote sufficiently decentralized, according to a former SEC official. It seems that the SEC's criteria haven't stopped. Gary and the gang from picking and choosing which crypto projects and crypto companies to clamp down on. The scariest part is that anti crypto politicians have been applauding the SEC's regulation by enforcement and encouraging it to do more. That's why the hearing I'll be summarizing today is so significant. It took place on Tuesday the 19th of July, and it featured only one witness, Gurbir Grewal, the SEC's director of enforcement, whose only held the position for about a year and it looks like it's been a busy year. If you catch my drift. Now the hearing itself was organized by the United States House Committee on Financial Services, specifically the Subcommittee on Investor Protection, Entrepreneurship and Capital Markets, and it's extremely important to point out that this subcommittee has direct oversight of the SEC. So without further ado. Let's dig in

Opening Statement -:

The hearing began as most of these hearings do, and that's with opening statements from politicians from both sides of the aisle, followed by an opening statement from the witness, which is again the SEC's enforcement director, Gurbir Grewal. The first politician to go was sub. committee chair Brad Sherman, and if the name sounds familiar, that's because Brad is one of the most anti crypto politicians in the United States. Brands began by highlighting the fact that the subcommittee has direct oversight of the SEC, which in turn overseas assets that are worth more than $100 trillion. Let that sink in. Brad also revealed that the SEC has an annual budget of $2 billion and 4500 employ. There's a quarter of whom are part of the regulators Enforcement division. You know, I'm starting to understand why these regulators are so easy to influence $2 billion to oversee 100 trillion. If the SEC was a proof of stake crypto, it would have been compromised at 100 times over. More about proof of work vs proof of stake here.Brad went on to explain that the number of enforcement actions the SEC took in 2021 increased by 7% compared to the previous year and that ideally the SEC would discourage rule breaking before it happens. Regarding cryptocurrencies, Brad talked about how the SEC has gone after no fewer than 80 crypto projects and companies since it established its digital assets arm in 2017, and that these enforcement actions resulted in $2 billion in fines, basically enough to cover one year of the regulators expenses. Brad ended his opening statement by conceding that there are some serious concerns around crypto definitions, particularly in the context of criteria such as the Howey test, and said he's surprised that the SEC hasn't spent more time going after crypto exchanges. This comment made the crypto headlines. The next politician to give their opening statement was Bill Huizenga, who serves as the ranking member to the subcommittee. That's a fancy term for second in command from the other side of the aisle. Fill began by highlighting the fact that it's been years since the subcommittee has had the chance to properly interrogate SEC officials and expressed anger that Gary Gensler wasn't present to answer for his actions. Though, to be fair, it's not entirely clear whether Gary was invited in the first place. Phil continued being blatantly pro crypto during his opening statement, mentioning everything from the fact that the SEC was failing to facilitate capital formation for Americans by going after crypto, and that it's actively engaging in enforcement without providing much needed regulatory clarity. This was in stark contrast to the next politician, Maxine Waters, the chairwoman of the House Committee on Financial Services, the Committee to which this subcommittee belongs. Maxine's opening statement was surprisingly short and to the point. The life savings of Americans were lost during the recent crypto crash. It's great to see the SEC cracking down, keep doing what you're doing. That was literally it. And then it was time for the man of the hour to make his opening statement. Gurbir began by bragging about how the SEC's enforcement actions have been increasing over the years, and said that crypto companies must work proactively to comply and the penalties will arise if they don't. Gurbir went on to admit that investigating crypto projects and companies is becoming more difficult and therefore the SEC is asking once again for politicians to allocate even more capital to it so that it can  on the crypto industry even more.

Executive Order on XRP , Tether , Terra and COINBASE -:

With opening statements out of the way, it was time for the politicians present to start asking questions, and the first to go was none other than subcommittee chairman Brad Sherman. Brad began by not so subtly responding to Bill's frustration about SEC officials not showing up to hearings, noting that Gary Gensler will be appearing before the committee later this year. And you can rest assured re summarizing that hearing when it comes along. Brad went on to say something surprising, and that's that the SEC must provide a clear definition of what a security is in the context of cryptocurrency. This is surprising because Brad is anti crypto, yet he knows as well as anyone else that regulatory clarity will result in more investment in cryptocurrency. Unfortunately, it only took a few seconds for Brad to remember he's anti crypto and this is where he said that the SEC needs to go after exchanges like Coinbase simply because they listed XRP in the past. Something else that made the crypto headlines for context, the SEC considers XRP to be a security and is suing. Ripple and its executives because of it. Anyways, Gurbir responded by saying that the SEC had brought an enforcement action against the Pollenex cryptocurrency exchange last summer, to which Brad responded by saying small exchanges don't matter. You need to go after the big exchanges, a comment which once again made the crypto headlines. Grad went on to ask why the SEC was investigating terror and not tether, and Gerber actually dodged the question, which is very interesting. Brad fired back by saying that the SEC needs to go after crypto projects and companies, even if it's not sure of success, which is just pure insanity if you ask me. Now the next politician to pose some questions was, of course, Bill. Who's anger, who began by blasting gurbir about the SEC's definition of a dealer in the context of investing and how it could theoretically apply to every single individual investor in the United States, not just institutions. Bill went on to highlight how the SEC's definitions of what a dealer is seem to vary depending on the context and ask gurbir how they can possibly set, much less enforce regulations with such contradictory definitions. Grewal responded by saying he's not involved in making the rules, and Bill said he hopes he and the rest of the subcommittee get to speak with the people at the SEC who are involved in making the rules at some point because it's long overdue.

ESG -:

After Maxine Waters asked some questions that are completely unrelated to crypto, and Wagner took her turn and began by asking how the SEC plans on enforcing ESG related disclosures. Given that the SEC has no definition of ESG either. Gabriel responded by saying that institutional investors are worried about companies lying about ESG criteria,  . Anyhow, anne went on to ask whether the SEC is an expert in climate policy, to which Gurbir said no, but that they actively refer to experts in climate policy when taking enforcement actions. Now this begs the obvious question of who these climate experts are, and that led Anne to demand that the subcommittee. Summon these climate experts for cross examination since they may very well be pushing the same investment ideology as Black Rock and Co. The next politician to ask questions was David Scott, who was enthusiastic about the SEC's whistleblower program, and by that I mean David spent most of his question. Just repeating how amazing the SEC's whistleblower program is before finally asking what the SEC needs more money for. Gurbir responded by saying. That it needs an 8% increase in its budget to add an additional 120 employees, twenty of whom would be focused on crypto. Note that the SEC had already doubled the size of its crypto unit in May this year. Once David was done, French Hill took the mic and brought the conversation back to ESG. He began by asking Gurbir whether the EC's enforcement actions around ESG were more related to false advertising rather than enforcing an investment ideology to which Gurbir responded yes. French then turned the tables on Gurbir by bringing up a document drafted by the task force for financial related disclosures in 2017, which provided socalled recommendations on how regulators should approach ESG and read a long passage from this document. For context, this task force was put together by Mike Bloomberg, the former New York City Mayor and Bloomberg CEO, and Mark Carney, the former governor of the Bank of Canada, the former governor of the Bank of England, the former chair of the Global Financial Stability Board and an active World Economic Forum memberNow, after French finished reading the passage, he asked Gurbir how the taskforces ESG ideology could possibly be enforced by the SEC. Given that the task force's own documents admit that there are no objective ways of measuring ESG criteria, learn the hold. Gurbir didn't have an answer and said that he'll touch base with the SEC about the congressman's concerns.

SEC Crypto Regulations -:

Photo by Marco Oriolesi on Unsplash

The next politician to pose questions was Jim Himes, who began by jabbering about his insider trading bill before pivoting to cryptocurrency. Name checking Tether, Voyager Digital and Celsius, and asking Gurbir whether the SEC has the resources to go after these firms and quote pause the excitement in crypto. Gurbir simply responded by saying that the SEC needs more resources. Jim then turned to the topic of SEC. Gurbir a gave a very political response and that's the SEC and the CFTC get along just fine, just fine. Politician Tom Emmer turned up the heat with his questions, and that's because he started by saying that nobody will invest if they know the game is rigged. And it's clear that it's the SEC and not the private sector that's rigging the game, especially when it comes to crypto. Tom then asked a peculiar question, and that's whether the SEC investigates individuals or institutions that they don't technically have authority over. Gurbir was visibly confused and responded no. Tom went on to ask whether the SEC had ever sent a letter to individuals and institutions. It doesn't have authority over telling them that it will be a quote bloodbath if they don't comply with the SEC's demands, to which Gurbir also responded. No. Tom then said something to the effect of, well, that's very interesting because the letter with that exact wording was sent to certain entities in the crypto industry, and that this is disturbing because complying with the requests in SEC letters of these kinds is supposed to be voluntary as per the SEC's rules. Tom concluded by slamming the SEC, declaring that it's become a power hungry regulator that's tricking crypto companies to come in and talk to it so that they can then be sued and told Gurbir quote, understand, Sir and New day is coming, which is likely a reference to the upcoming midterm elections. In the interim, it looks like the SEC will continue to clamp down on crypto thanks to politicians like Juan Vargas, who applauded the SEC for cracking down on crypto and said that he's shocked the regulator is being attacked for, quote, doing the right thing. Although one also advocated for more ESG from the SEC, he was similarly suspicious as to which climate experts the SEC is referencing as part of its enforcement actions. And while Gurbir again confirmed that it is deferring to third parties, he did not disclose who these climate experts are. Politician Warren Davidson began his turn by saying he's glad that one isn't a financial advisor, SNAP and then ask Gurbir whether the SEC investigates pumps and dumps in crypto. Gurbir said yes, but that he didn't have a list with him, which inspired Warren to ask why the SEC goes off to some crypto projects. And not others. And whether this evident bias is happening because bigger crypto projects are harder to target. Gurbir was visibly defensive when he insisted that the SEC goes after all crypto projects and companies equally, regardless of their size. Expecting this reply, Warren hit Gurbir with another fast ball, and that's where the previous comments by SEC officials count as regulatory clarity, a not so subtle reference to former SEC director Bill Hinman, who, as I mentioned earlier, said that a etherium earth was not a security as it is sufficiently. Decentralized. Gurbir quickly realized Warren was not so subtly referring to the SEC's ongoing case against Ripple and its executives, and said he couldn't comment on any ongoing cases against crypto projects. Warren doubled down by declaring that the SEC has given zero regulatory clarity around cryptocurrency and is regulating via enforcement. He also asked Georgia why the SEC is not doing the same with other asset classes. Gurbir responded by saying that the SEC engages in enforcement actions whenever the law is broken Warren finished his question. By asking Gurbir when Gary will stop pushing his political agenda in the SEC's enforcement, and the timer ran out before Gurbir could respond.

Gamification in Cryptocurrency -:

The next politician in line was Sean Caston, who remarked that it had been about two years since Robin Hood Trader named Alex Kearns had killed himself after mistakenly thinking that his account was more than $700,000 in the hole from losing a heavily leveraged trade. Sean asked Gurbir what the SEC is doing to stop the gamification that Sean believes led to this suicide, and whether this kind of gamification is part and parcel of cryptocurrency, the obvious answer to both questions was that the SEC is investigating and yes, I'm absolutely sure it is. Now, after a couple of odd questions from Trey Hollingsworth, Brian Stale took his turn and spent most of his time reiterating that the SEC's definition of a dealer could create issues for individual investors and that the SEC's ESG push is only going to increase costs across the board and accelerate inflation, some would say. That's the whole point of ESG, but that's a topic for another time. Brian then again asked whether the SEC was an expert in climate science, and after Gurbir reiterated that the SEC refers to third parties for advice, Brian berated him for wasting taxpayer dollars after Gurbir tacitly admitted that these climate experts are being paid thousands of dollars per hour. You know, this reminds me of how the anti money laundering industry is making ever more money from the public and private sectors while having no effect on illicit finance at all. With all the politicians present, having asked their questions, all that was left was the closing statements from Brad and Bill. Bill was the first to close and he reiterated that the SEC needs to send more people to the Subcommittee for Cross examination Brad once again surprised with his closing statement because he reiterated that the SEC needs to set a clear definition of what a security is in the context of cryptocurrency. Because Howie test was developed in the 1940s and is simply outdated? Brad then once again went back to his old ways by saying that XRP is clearly a security and the SEC needs to clamp down on all cryptocurrency exchanges that listed in the United States. I mean, look, I understand that not everyone is a fan of XRP, but this is really something else. Brad ended the hearing by saying the SEC also needs to provide a clear definition of ESG and that there's a need for clarification. About the SEC's enforcement in general, finally, something we can agree on.

Is This Executive Order Good Or Bad for Crypto ?

So this brings me to the big question and that's what this SEC hearing means for cryptocurrency. Well, if the recent crypto headlines didn't make it clear enough, it's not good. It's clear that the SEC is following the orders of ESG obsessed institutional investors and anti crypto politicians, especially those who are part of the subcommittee that held this hearing, as Tom Emma however, a new day is coming, the upcoming midterm elections are likely to shake up the composition of these committees. Let's just say that the power will be put back in the hands of the pro crypto politicians. The thing is that this isn't a guarantee. More importantly, even if this does happen, crypto isn't exactly the number one issue these days and that means that any attempts by pro crypto politicians to pull crypto from the SEC's line of fire are likely going to come after a few crypto projects and companies have been hit hard. As I mentioned in our recent weekly crypto review, the SEC is currently trying to take down crypto project called library as quickly as it can so that it can set the precedent it needs to take down XRP and then go after just about every other altcoin. The decision in the SEC's case against library is expected to come out in the next one to two months, which happens to roughly coincide with when we could start seeing some new lows for this crypto cycle for most coins and tokens. Never mind the SEC is also starting to go after cryptocurrency exchanges. In sum, the second-half of this year is going to be nothing short of crazy. We're likely to see a lot more enforcement actions from the SEC before the proto politicians put Gary Gensler back in Pandora's box, and it's possible that some cryptos you hold will be affected. Now, for what it's worth, the SEC has made it clear that BTC is not on its radar, and any cryptocurrencies that aren't listed on crypto exchanges in the United States will probably not be targeted and only suffer because of the broader crypto market decline. Just make sure to check that the ICOS for these offshore cryptocurrencies weren't available to retail investors in the United States, because that could put them within the SEC jurisdiction. It really shouldn't. But hey That's just how the SEC is. Last but not least, consider assessing just how decentralized the cryptocurrencies in your portfolio are. Because if these coins and tokens are truly decentralized, then they are immune to regulation as per the admission of the SEC and other regulators around the world. You can find out what decentralization looks like by clicking on me .

That's all for today guys about the Biden's executive order on crypto. If you found this article  helpful, please share this article with your fellow cryptonians and Let's increase the awareness together we can not let greedy politicians take the one power which people have to change their lives .

To read more such interesting articles please pay a visit to cryptolibrarynow by Clicking On Me

Thank you all so much for reading this article  . Keep-Learning-Keep-Growing.


Popular posts from this blog

What is Tectonic Crypto Burn Mechanism for Tonic | How To Stake Tonic Explained 2022.

    Table Of Content -: What is Tectonic Crypto Burn Mechanism for Tonic? Why is Tonic Going down? What is Tectonic? what is Tonic ? What is Tonic Staking ? How Does Tonic Staking Works? Lending Assets Borrowing Assets How to Stake Tonic? How to Unstake Tonic? What is Tectonic Crypto Burn Mechanism for Tonic? The answer is Staking , as more people borrow and repay their loans on Tectonic , the staking module will buy more TONIC off the market resulting in a lower market supply. Why is TONIC going down ? Tonic is going down because of two reasons-: 1st)The Staking Module buying more Tonic off the market resulting in a lower market supply , thus high burn rate. 2nd)TONIC Iis based Kronos blockchain , and as kronos is going down so expecteadly TONIC is also going down. Disclaimer -: I need to give you a disclaimer before I talk about this bill. I am not a financial advisor , I'm just an educator and this blog post is written with the sole purpose of providing you factual information.

What Is Crypto Mining | For Beginners.

Hi folks. Do you know something I've learned recently is that it's very, very useful to know one of these shadowy, supercoder types who keep Mr Ajit Doval awake at night? Well, not literally. Well, I suppose you never know. Anyway, I have a friend. Called Rakesh and he is a whiz with computers and he has very kindly put together this little beauty for me. Now it doesn't look like much, does it? Well, this is actually my very first crypto mining rig. Crypto Mining In India!?!.Now, wait, I know what some of you may be thinking. Guy, come off it. Crypto mining is big business. You'd need a room filled with thousands of those if you wanted to become a crypto miner. Well, you're half right. But before I talk about this chap here, I want to talk briefly about the mining process, because it's one of the most technical. And tricky aspects of crypto to try and wrap your brain around so. Here goes, and. So let's start with Bitcoin now.  How Is Bitcoin Mining Done? Her

Bitcoin Mining Climate Change: How Much Does It Really Matter?

  What Is Crypto Mining? Bitcoin, Ethereum, Litecoin and a few other large cryptocurrencies use a proof of work consensus mechanism. In simple terms, a consensus mechanism is the process used by multiple entities to reach an agreement about. Fact, as a simple example, let's say you're hanging out with eight of your friends and you're deciding whether to go to the movies or to the beach. The consensus mechanism for that decision could be a simple majority vote, or it could be that all of you must vote to do the same activity. Cryptocurrency works the same way, except instead of a group of friends deciding what to do for fun, it's a group of computers spread around the world deciding which cryptocurrency transactions are valid. Rather than confirm one transaction at a time, cryptocurrency networks group multiple transactions into a single block. Each block contains a record of the previous block, hence the term blockchain. For blockchains like bitcoins, they're reward