As panic continues to ripple through the cryptocurrency markets, industry experts and investors are worried that the latest crypto crash will worsen the industry in the eyes of Washington policymakers.
Charles Hoskinson, the founder of the Cardano blockchain platform, hosted a lively Twitter space call for his 911,000 (and growing) followers, where he discussed his current status, after a 72-hour roller coaster ride that wiped out the $409 billion global crypto market cap. the crypto market and its implications for the future of the industry.
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“We’ll probably wait until 2025 for real change to happen,” Hoskinson told FOX Business. “I have zero faith in Elizabeth Warren’s party and others that they will actually impact crypto above and beyond in a meaningful way.”
The conversation surrounding cryptocurrency in Washington has been largely dominated by both Elizabeth Warren, a fierce crypto critic, and Gary Gensler, head of the Securities and Exchange Commission, who has vowed to crack down on the digital asset space using a “regulation.” The “practice” approach in an attempt to control the rapidly expanding industry. Earlier this month, the SEC announced that it will add 20 new positions to its crypto assets and Cyber Unit, nearly doubling its crypto enforcement team, bringing its total headcount to 50.
Today, Gensler doubled down on the view that most cryptocurrencies are really securities and should be regulated under the SEC’s jurisdiction. He also caused new waves in the industry by arguing that crypto exchanges such as Binance and Coinbase are trading against their customers, meaning that they can get intelligence before their customers and take advantage of the trades.
Elizabeth Warren has also been a staunch critic of crypto recently, stating that investing in cryptocurrencies is a “risky” and “speculative” gamble. Now, many in the crypto space fear that the words of the Massachusetts Senator are starting to sound true.
In the past 24 hours, Bitcoin has slumped below $30,000, down more than 50% from its all-time high of $69,000 last November. Meanwhile, the price of the so-called stablecoin Terra, designed to hold a consistent peg against the US dollar, slumped as low as $0.23 on Wednesday with its sister token Luna, losing nearly 94% of its value last week. .
Currently, Sens. Kirsten Gillibrand (DN.Y.) and Cynthia Lummis (R-Wyo.) are working together on bipartisan legislation that could bring some kind of regulatory clarity to the crypto industry.
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Hoskinson believes that the recent volatility and general uncertainty in the crypto market will generate more support for the new law, but time is running out.
“I believe this will push the legislature to escalate and actually pass a law at some point,” Hoskinson told FOX Business. “But if they don’t act quickly, I don’t think they have enough political time to actually pass comprehensive legislation before the midterm elections.”
In March, President Biden signed an executive order asking various government agencies to weigh the pros and cons of implementing a US digital dollar, also known as a CBDC, pegged to a country’s fiat currency. The study takes more than 6 months and includes input from both the Federal Reserve and the Treasury Department. Digital currency advocates feel that the US is lagging behind in adoption as 9 other countries, including China, have already launched their own CBDCs.
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This breakout in the crypto markets could damage the timeline for Washington’s wider crypto adoption.
“Washington is Washington, and the gears are pretty mixed right now,” Hoskinson said. “With the change in management, it seems like practically nothing will be done until 2025, except for more sanctions and regulation,” he said.