What if the government’s war on crypto didn’t protect consumers—but built a playground for fraudsters?
That’s the ugly truth behind Biden-era crypto policy. Thorn’s takedown of that New York Times op-ed by ex-advisers Ryan Cummings and Jared Bernstein nails it: their selective amnesia ignores how hostility, not rules, defined the approach. Bitcoin’s price dip? Blamed on the tech. But wait—prices fluctuate. Amazon cratered 94% in the dotcom bust. Worthless? Hardly.
Look, these guys paint a picture of ‘aggressive efforts to curb scams.’ Extraordinary spin. FTX ballooned under Biden’s watch. Sam Bankman-Fried, mega-Dem donor, schmoozed with Gary Gensler himself—while building history’s biggest fraud. Regulation-by-enforcement? It chased good players away, left the field to rule-breakers who gamed the gray zones.
Did ‘Operation Choke Point 2.0’ Kill Crypto in America?
Banks, prodded by feds, debanked legit crypto outfits. No due process. No rulemaking. Just cut off. Small businesses, underserved folks turning to crypto for banking alternatives? Collateral damage. This wasn’t policy—it was a shakedown, echoing the original Choke Point that targeted guns and payday lenders. (Remember how that birthed offshore shadows?)
Consumers lost tools. Innovation? Offshore to friendlier shores like Singapore, UAE. America’s edge? Squandered.
Here’s the blockquote that stings:
The administration’s strategy of regulation-by-enforcement, rather than establishing clear rules, had a perverse effect: legitimate, compliance-minded companies were driven offshore or out of business, consumers were harmed, and American innovation was stifled.
Spot on. Cummings and Bernstein gloss over this, waving at remittances like it’s pocket change. Global fees? 6.5%. Billions siphoned yearly from migrant families. Stablecoins? Minutes, pennies. They sat in ‘dozens of meetings’—did they ask the users?
Why Dismiss Big Banks’ Blockchain Bet as Hype?
Fidelity. JPMorgan. BlackRock. Visa. Stripe. They’re all in—building on blockchain. Claim no ‘giant tech firms’? Wrong. Dead wrong. This op-ed’s Bitcoin-is-slow jab? Security trumps speed for dissidents dodging tyrants. Can’t reverse peer-to-peer txns. No middleman veto. That’s the ‘why’ regulators should love.
My unique take: This mirrors the 1996 telecom wars. FCC flip-flopped on internet classification—dial-up as phone? Cable? Chaos slowed broadband rollout. US lagged. Biden’s crypto fog? Same playbook. Bold prediction: Clear rules under Trump (or anyone rational) flips it—US DeFi hubs rivaling Wall Street 2.0 by 2028, sucking talent back.
But their bailout strawman? Laughable. Stablecoin bills demand overcollateralization with Treasuries. Bitcoin reserve? No new spend. Meanwhile, SVB collapse—Biden guaranteed all deposits. Moral hazard? Selective outrage.
Short-term prices condemning crypto? Unserious. Volatility signals youth, not failure. Nascent markets swing—then mature.
And the PR spin? Masterclass in omission. History rewritten: hostility as heroism.
How Did Hostility Reshape Crypto’s Architecture?
Drill down. Enforcement-first meant no safe harbors. Builders couldn’t scale domestically—compliance roulette. Offshore migration? Baked in. FTX thrived in murk; Terra/Luna imploded sans guardrails. Clear rules? Like Europe’s MiCA—firms stay, innovate.
US lost ground. Remittances alone: $800B market. Stablecoins slice fees 90%. Families eat better. But Biden crew? ‘Painfully slow database.’ Ignored the stack: L2s hit Visa speeds. Ethereum’s roadmap? Real-time settlements soon.
Corporate hype? Their op-ed reeks of it—defending debanking as consumer protection. Nah. It starved the underserved.
One punchy para: Chaos favors cheats.
Deeper: Banks debanked crypto, then pivoted to custody post-FTX. Profitable pivot, courtesy of policy whiplash.
Regulators met SBF—red flag ignored. Why? Political games. Donors get leeway; startups get lawsuits.
The Offshore Exodus: A Self-Inflicted Wound
Count the casualties. Coinbase fought SEC in court—win, but drained. Kraken settled. Others? Gone. Dubai, Bahrain now crypto Meccas. US talent? Exiled.
Architectural shift: Permissionless to paranoid. Builders code in shadows now.
But flip it. Clarity unleashes. JPM’s Onyx? $1B+ settled. BlackRock’s BUIDL fund? Billions tokenized.
Biden legacy? Not vindication. A warning: Hostility breeds exodus.
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Frequently Asked Questions
What was Operation Choke Point 2.0 in crypto?
Feds pressured banks to cut off lawful crypto firms—no formal process, echoing 2013 gun-lender crackdown. Debanked innovators, hurt consumers.
Did Biden policy stop crypto scams?
Nope—FTX grew huge under it. Bad actors thrived in rule vacuum; good ones fled.
Will clearer crypto rules boost US innovation?
Absolutely. Like MiCA in EU, it pulls firms home—predicting DeFi boom by 2028.
