Hillary Clinton Now Wants Biden To Regulate Cryptocurrencies

Mark Hake

Hillary Clinton says Russia and China are "manipulating" cryptos and the Biden Administration needs to "regulate" the cryptocurrency marketplace

She told this one day ago to Rachael Maddow on MSNBC. It immediately made headlines in the crypto world.

There is only one problem. China has already shut down all cryptocurrency mining in that country this spring. Moreover, they declared all crypto transactions illegal, according to the Wall Street Journal. This was done by the country's central bank.

As a result, numerous crypto mining companies have migrated to other countries, including the U.S. In fact, Coin Telegraph reports that the Chinese government recently warned state-owned enterprises to stop mining cryptocurrencies. The government believes it does not have the power capacity to mine cryptos.

The problem with China's banning cryptos is that this is now the second time the country has tried to do this. Several years ago they made the same proclamation.

As a result, the US is now considered the leader in Bitcoin and Ethereum mining. The Guardian magazine reports that the US leads and now has the largest share in crypto mining, based on global hash rate analysis done by Cambridge University.

In addition, people kept making peer-to-peer transactions in Bitcoin and other cryptos. In fact, one commentator on CNBC said that this was the 20th time it had banned cryptos. Each time Bitcoin came back stronger. In fact, Edward Snowden now says that Bitcoin is stronger as a result.

Regulation in the US Not Likely

So far the US Securities and Exchange Commission has said that it won't regulate cryptocurrencies and that regulation is up to the US Congress.

Given that this would likely become a contentious issue, any legislation might be difficult to pass both houses of Congress. For example, the Financial Times reported that some Republican members felt the SEC was overstepping its bounds in trying to regulate cryptos.

However, the SEC has already issued a notice that all crypto exchanges that operate in the US need to register with the SEC.

Nevertheless, Coinbase Global (COIN), the largest crypto exchange operating in the US has not registered as a broker-dealer with the SEC. Moreover, it had plans to offer a lending product and is not registered as a lender or a bank, according to Coinbase. Later Coinbase dropped that plan according to the WSJ.

Recently the new infrastructure bill levied a tax on cryptocurrency transactions. The infrastructure bill says “a brokerage” needs to levy the tax. But, as Tech Crunch recently wrote, there are many smart contracts in the crypto world that do not involve brokerages. The bill seems to have been loosely worded and its implementation may be difficult.

Moreover, the new tax may make it very difficult for US citizens to participate in the crypto world. Many foreign companies could find the compliance issues too burdensome and reject US customers. This is what happened when the US passed the Foreign Account Tax Compliance Act.

Where This Leaves Crypto Investors

Hillary Clinton's call to regulate cryptocurrency will likely not lead to any major shift in the US government stance. It has already tried to move in this arena, but so far nothing major has happened.

In fact, the SEC is still involved in a major corporate lawsuit with Ripple Labs over the regulation of their cryptocurrency as not having been registered. Ripple Labs has fought back against the SEC in a countersuit and argues that it is trying to install unnecessary regulations.

Ripple also argues that this kind of high-handedness will result in harm to innovation and hamper business growth, according to Namecoin News.

As a result, crypto regulation is at a stalemate in the US, despite what Hillary Clinton wants.

By the way, don't forget to follow me and make sure to download the Newsbreak app to become a registered follower, so you can see all my articles in the past. Click on the link underneath my profile name.

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This is not financial advice and you should not rely on my analysis to buy or sell any stock or crypto, as I am not undertaking to induce you to buy or sell securities.

I am relying on the “publisher’s exclusion” in the Investment Advisers Act of 1940 to provide this information without any personalized or individualized investment advice.

This represents my analysis of Bitcoin, Coinbase, and cryptocurrencies and it is not meant to provide you with specific advice in your own situation. I do not presently own these securities, but I may buy some of these in the coming weeks.

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Mark Hake is a financial analyst, investor, and Chartered Financial Analyst (CFA). He writes about US and foreign stocks as well as cryptos, hedge funds, and private equity. He previously ran his own hedge fund, investment research firm, and acted as CFO for a fintech startup. He focuses on finding value, arbitrage, and hidden asset opportunities.

Phoenix, AZ
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