Silicon Valley Bank, Silvergate Bank, and Signature Bank’s recent closures are more than just hearsay. If they even bring up cryptocurrency, businesses and law firms are apparently having trouble getting banking services. Why is the government preventing banks from providing services to the cryptocurrency sector?
After discussing this with James Murphy, a strategic advisor and attorney, and he brought up the well-known statement from bank robber Willie Sutton that one must rob banks because “that’s where the money is.” He emphasized that stopping money from entering or leaving cryptocurrency exchanges was strangling the sector. The global conversation has now focused on this topic, with presidential contender Donald Trump pledging to put an end to President Joe Biden’s “war on crypto.”
In addition, the U.S. Securities and Exchange Commission (SEC) and its chairman, Gary Gensler, have recently suffered greatly. Gensler appears to be having more problems as a result of the Supreme Court’s decision to rule against the SEC and VanEck’s application for an exchange-traded fund (ETF) based on Solana. Murphy claimed that the SEC’s record of wins and losses is poor and that these setbacks have severely damaged the regulator’s reputation.
According to Murphy, courts are also frequently ruling against the SEC for acting arbitrarily and capriciously, which is significantly worse than just making mistakes.
Drawing attention to the well-publicized Debt Box scandal, he asserted that Grayscale’s lawsuit against the SEC, which the SEC lost, is the only reason a bitcoin spot exchange-traded fund exists today. According to this, Gensler’s activities are starting to lose political value even though they are in line with the policies of an organization headed by Elizabeth Warren. In the next months, Murphy believes that action may be taken in response to the issue.
Although these cases usually take a long time to settle, Murphy claimed that because a trial is not required, the procedure is rather quick by litigation standards. He projects that it will take six to nine months to find out if the government may withhold papers from Coinbase under any kind of exemption.
However, what if the Federal Deposit Insurance Corporation (FDIC) is discovered to have illegally shut down banking for the cryptocurrency industry as well? According to Murphy, the FDIC is already preparing a scapegoat in light of the issue surrounding its chairman, Martin Gruenberg, who has been accused of creating a hostile work environment.
