During the campaign for President of the United States, there was debate about which candidate would be more benefit to cryptocurrency.
Kamela Harris stated that she would not change anything regarding the policies of Joe Biden. This means, if she won, it would have been status quo.
We are starting to get people reporting what took place during the Biden years and how destructive it was to cryptocurrency. One entity that took it on the lip was Facebook (Meta). Perhaps that is why Mark Zuckerberg was restrained in his support for Democrats in this election.
Do you remember Libra? That was going to be a game changer, something that quickly disappeared from the radar. But why did that happen?
In this article we will dig into some of what is emerging and how it really hindered the growth of the industry.
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The Biden Administration Was Destructive To Crypto
Operation Choke Point 2.0 was a behind the scenes operation that was designed to cripple the crypto industry. We will never know the true extent of the damage.
This was a follow up to Operation Choke Point, which was instilled under the Obama administration. During that period, it targeted mostly cannabis companies, an industry that was becoming legalized.
The basis for these operations was basically to cut companies from the banking system. Through The Fed and Treasury, pressure was put on banks to cease ties with particular sectors. In this instance, it was crypto firms.
Many had their bank accounts closed down. This was an organized attack by the government to destroy an industry. Fortunately, crypto is much larger than one country, so the overall impact was reduced. It did, however, affect the standing of the United States as businesses were pushed offshore.
None was affected more than the Libra project.
Libra Killed By The US Government
Janet Yellen is head of the United States Treasury. She is part of the Biden administration and a government employee.
Libra, as it turns out, was not killed for regulatory reasons. Instead, it was political.
In a recent post on X, Marcus recounted how Libra was ready for a limited rollout in 2021 after addressing every regulatory concern.
However, Treasury Secretary Janet Yellen allegedly told Federal Reserve Chair Jay Powell that approving the project would be “political suicide.”
Soon after, the Fed reportedly pressured banks to back away, effectively killing the initiative.
Here we have a government employee basically telling the head of the Federal Reserve, who is appointed by the President, that is would be political suicide to allow Libra to go forward.
Of course, as an aside, the idea of Zuckerberg having so much power would not be very appealing. However, as we see, it was the choice of him or Blackrock, which is now moving into the crypto space in a big way. Is Larry Fink any better?
Tyrants aside, the fact the United States government, through underhanded operations, set out to crush private company projects from emerging should being upsetting to everyone.
Unfortunately, this is not a one off.
Caitlin Long, CEO of Custodia Bank, replied to the thread claiming her firm faced similar targeting, stating, “Someday...I’ll be able to tell the real story of what the Fed did to Custodia Bank.” She added, “There’s so much corruption.”
She made waves by attacking the Fed for its decisions to exclude that bank from having a master account. That basically cut them off from Fed funding.
Then we have venture capital investors who saw a number of their businesses crushed.
Marc Andreessen of Andreessen Horowitz has also highlighted the issue, stating on The Joe Rogan Experience that more than 30 tech founders have been “debanked” over the past four years.
Crypto founders like Sam Kazemian alleged that JPMorgan Chase was instructed to close accounts tied to crypto wealth.
As we can see, the list keeps getting longer.
Killing Innovation
How many companies were destroyed because of this?
While it might not seem like a big deal on the surface, who knows what could have emerged. Perhaps there was the "Google of Crypto" in there. Because of this, it will never see the light of day.
This is typical government. The revelations coming out show how absurd the debate during the campaign truly was.
It is not limited to cryptocurrency. Marc Andreeson, on that same Joe Rogan podcast, mentioned that AI was being treated the same. Startups would not be allowed to succeed. Instead, through regulatory capture, a few companies would be allowed to build LLMs and everyone else would be shut down.
We can see why Sam Altman suddenly became such a proponent of regulation. He was angling to have OpenAi be one of the firms granted the ability to profit off AI.
When it comes to technology, innovation is key. Things go stagnant when new ideas and innovations cannot come to market. It is why the Soviet Union struggled to keep pace. Ultimately, history showed it was not an innovative company.
The same is starting to emerge with China. That is also a centrally planned economy, with the government dictating what can take place. China excels at taking existing ideas and expanding upon them. Some state that it does so by stealing the technology. Nevertheless, they do advance things in this manner.
Where it runs into an issue is with innovation. China doesn't have the system whereby companies can compete without someone from the government overseeing what is taking place.
Here is where stagnation enters. China did not start the EV revolution, they just moved quicker in their adoption and manufacturing. This is what allowed them to surpass the rest of the world.
Crypto requires massive innovation. We are at the early stages. There are going to be a lot of failed initiatives, which is common in technology. Not everything ends up as Google or Apple.
What is clear is countries that try to pick winners and losers ends up losing. Look at those economies, especially with the percentage of GDP that is technology based. They lag behind the rest.
Crypto is going to be a major driver going forward. AI is a central premise of Web 3.0. Here we see the handshake between the two industries.
To excel, we need innovation.