The U.S. government has been accused of waging a secret war against the cryptocurrency industry, with some fearing that it could destroy all value of bitcoin, ethereum and other major cryptocurrencies.
A leaked memo circulated to Democrat House financial services committee members has revealed the “key messages” lawmakers were told to stick to that could see almost all cryptocurrencies categorized as securities.
The document, passed to committee members by the Democratic party ahead of Wednesday’s joint House hearing on crypto policy, was leaked by Fox Business reporter Eleanor Terrett on Twitter.
“The problem isn’t ambiguity—it’s mass non-compliance with existing laws,” the memo reads.
The memo also claims that “the vast majority of tokens are securities” and that “the SEC has been clear about this for years.”
This could have serious implications for the crypto market, as securities are subject to strict regulations and disclosure requirements that most crypto projects do not comply with.
The memo also suggests that lawmakers should push for more oversight and enforcement of the crypto industry by the SEC, the CFTC and other agencies.
The leak comes amid growing tensions between the Biden administration and the crypto industry, with some accusing the government of trying to “quietly” ban bitcoin, ethereum and other cryptocurrencies in a move that’s been described as “Operation Choke Point 2.0”.
Operation Choke Point was a 2013 government initiative that sought to cut off undesirable industries from banking services, such as payday lenders, firearms dealers and pornographers.
Some in the crypto space believe that the recent attempts to ringfence the crypto industry and cut off its connectivity to the banking system are reminiscent of this little-known Obama-era program.
Last month, the Federal Reserve rejected crypto bank Custodia’s application to join its ranks, casting doubt over whether the Office of the Comptroller of the Currency will give final approval to crypto companies Protego and Paxos’ applications for national trust bank charters.
The Biden administration also warned last month that it would be a “grave mistake” to allow ties between traditional banks and crypto companies without imposing strict regulations on the latter.
The administration’s stance on crypto has been met with resistance from some lawmakers and industry leaders, who argue that innovation and competition should be encouraged rather than stifled.
They also point out that crypto has many potential benefits for society, such as financial inclusion, transparency, efficiency and privacy.
The debate over crypto regulation is likely to intensify in the coming months, as more bills and proposals are introduced in Congress and more hearings are held on the topic.
The outcome of this debate could have a significant impact on the future of crypto in the U.S. and beyond.