Democratic presidential candidate blames War on Crypto” for recent bank failures

Democratic presidential candidate blames War on Crypto” for recent bank failures

A Democratic presidential candidate is tackling growing anti-crypto sentiment within his party by blaming regulators' "war on crypto" for various bank failures that occurred in March.

Environmental lawyer Robert Kennedy Jr. has spoken out in recent days against the Biden administration's general handling of the ongoing banking crisis and has spoken out against the financial authorities' rescue approach.

The War on Crypto

In one tweetOn Tuesday, Kennedy endorsed an article by Ellen Brown titled “How the War on Crypto Triggered a Banking Crisis.” The article outlined how actions by the Federal Deposit Insurance Corporation (FDIC) and the Securities and Exchange Commission (SEC) contributed to the demise of Silicon Valley Bank (SVB), Signature Bank and Silvergate Bank in March

“FDIC and SEC have no authority to wage an extra-legal war on crypto that leaves big banks as collateral damage,” Kennedy said.

Crypto industry leaders have been in turmoil in recent months over an alleged government conspiracy colloquially referred to as “Operation Chokepoint 2.0” – a subtle attempt to dissuade the banking sector from serving crypto companies and spook offshore blockchain companies with unclear and arbitrary enforcement measures.

Caitlin Long, CEO of crypto-friendly Custodia Bank, claimed last April that the SEC was penalizing crypto firms that tried to "stay the fuck away" with a deliberate signal. Coinbase CEO Brian Armstrong has also done sorecommendedthat Coinbase could seek to move its headquarters outside the United States if local regulatory challenges persist.

Even Barney Frank – a former US congressman and board member of Signature Bank at the time of its closure – claimed that the closure of the crypto-friendly bank was unnecessary and was specifically intended to create a “Anti-crypto message“ to other banks.

While some crypto-supporting politicians have done soAttention calledAccording to the SEC's “regulation by enforcement” approach, most come from the Republican island. In contrast, congressional Democrats are showing fatigue with the crypto sector and are beginning to question whether there is even a legitimate use case.

The White House on TuesdaypublishedGuidance for Congress encouraging policymakers to pass a 30% excise tax on Bitcoin mining as part of the federal budget to make miners pay for the “economic and environmental costs” they incur.

Kennedy's crypto support

A respondent to Kennedy's tweet criticized the presidential candidate for defending crypto and questioned his environmental claims given the "enormous amounts of energy" consumed by the technology. The lawyer then assured that this criticism was a “misunderstanding” and promised to write about the issue this week.

Kenedy has also opposed Central Bank Digital Currencies (CBDCs) – a government-backed form of money often advocated by traditional crypto advocatesblow upas an invasion of privacy.

“A CBDC tied to a digital ID and social credit score will allow the government to freeze your assets or limit your spending to approved providers if you don’t comply with arbitrary dictates,” Kennedy argued in a tweet last month.

The candidate's comments were specifically related to the new central bank FedNow payments service that the Federal Reserve operatesclarifiedDays later “is not associated with any digital currency.

Cover image courtesy of People Magazine.

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