Bitcoin has Become Political

Bitcoin has become political, which means we all need to be careful of the regulatory sharks in the crypto waters.

October 21, 2024

By: Bobby Casey, Managing Director GWP

It’s strange how everything now comes with this mandate to either be a left wing phenomenon or a right wing one. Nothing seems to be able to exist apolitically.

Speech, gun ownership, privacy, low taxes… none of those things should be politically charged issues. The United States, vis a vis its constitution, should be culturally inclined to maximize all of those things.

That’s not the case. The United States is quite divided on these things, and many others, and that division has risen to a political level.

This division finds its beginnings at the political level, though. Politicians created the Central Banking system, took their country off the gold standard, and became very dependent on OPEC cooperating with propping up the petrodollar.

Ron Paul installed a resurgence of anti Federal Reserve sentiment, and push for the gold standard. That gave rise to alternative currencies to fiat such as gold and silver, as well as Bitcoin and cryptocurrencies in general.

Ron Paul didn’t win presidential nomination or office, but he did put a lot of people on to the Central Banking scam. When Bitcoin first emerged it was a novelty. People started advocating it become a recognized currency of the US.

Fast forward to today, and Bitcoin has become political. You have politicians clinging to Central Banks the way they cling to legacy broadcast television. We’ve written about the fearmongering behind crypto about money laundering and tax evasion. Of course that was true for years with cash, but okay.

Why the focus and shift toward Cryptocurrencies and Bitcoin?

Remember when accounts were being frozen in Canada, as part of a larger retaliation against the trucker convoy?

Prime Minister Justin Trudeau’s order to freeze bank accounts and crypto assets belonging to leaders of Canada’s anti-vaccine mandate movement choked off support for demonstrations that paralyzed international commerce and clogged Ottawa’s downtown with big rigs.

It was a shocking wake-up call to many who watched as the pillars of the middle class had their accounts frozen.

Privacy is paramount here. This is exactly why Prime Minister Justin Trudeau lashed out the way he did against the truckers. He didn’t like not knowing who was helping, and who was receiving that help. Remember, free people don’t owe governments any transparency.

Anti-Bitcoin Rhetoric form Elizabeth Warren

I doubt Elizabeth Warren actually understands what Bitcoin even is, but she has a very staunch and loud opinion on it. She’s called it, “the plaything of terrorists and money launderers,” and believes, “crypto threatens national security, climate, financial stability, and consumer and investor protections”.

She passed legislation that restricted self-custody wallets… but allows banks custody of their own wallets. Forbes observes:

For somebody who has claimed her position is for working people and against big banks, Sen. Warren now finds herself in league with the same banks she claims to decry – with many banks part of official or shadow efforts (such as Operation Chokepoint 2.0) to shut down Bitcoin.

Bitcoin has become political, and Elizabeth Warren is running for a third term on an anti-Bitcon platform.

What does “Cryptocurrency Support” Mean?

It’s a bit deceptive because cryptocurrency is a very broad term. Does Bitcoin fall under that umbrella? Yes. So does Central Bank Digital Currency. So do Stablecoins.

So, yes, there is a lot of support for “cryptocurrency”, but when we see headlines like, Just 41 US politicians now ‘strongly against’ crypto with 310 ‘strongly supportive’, we should be cautious. There’s a lot in that crypto tent that is bad or at the least sketchy.

Be as suspicious of politicians who support cryptocurrency as Elizabeth Warren is of people who use it. That’s the best way to put it.

When I say that Bitcoin has become political, keep in mind that most politicians don’t understand the difference between Bitcoin and CBDC. Matter of fact, it wasn’t long ago that this very point was made in congress:

At a congressional hearing only four months ago, Democratic Congresswoman Maxine Waters actually tried to make the case that we should implement a CBDC, and not ban it, because countries like China are embracing it. She called it the next “space race”.

You can have “support” for a thing, but the other shoe to drop is the level to which they wish to regulate it.

Enter Pending Regulations on Cryptocurrency

This is where we see what support actually looks like. Several regulations are either in the pipeline or recently locked in. Some of it is benign, like whether to define cryptocurrency as a security or a commodity based on whether the blockchains are centralized or decentralized.

There are others that start to get into reporting, such as registration of exchanges and tokens, standard disclosures and what they should be, as well as anti-fraud measures and cybersecurity measure to insure against hacking.

So far, okay. If that’s all there was, I think people would be fine with it. But that’s never all there is.

The list goes on to include collaboration with other regulators on Anti-Money Laundering and Counterterrorism Financing, monitoring trading activities, global regulatory cooperation, and tax guidelines.

There’s the rub. Reread that last sentence, but think FATCA. Not so reasonable anymore, is it?

These regulations are coming from the SEC, and we all know government agencies are down stream by several years from the rest of society. So while Bitcoin has become political, the interesting part we need to watch is how the overturning of Chevron Deference will play into this.

Either way, watch where you step in the choppy waters of Bitcoin or cryptocurrencies in general. Whereas, you once worried about private sector hackers and scammers… now you have to worry about the public sector scammers and theives as well.