CRAZIEST Crypto Hearing: How Is This Happening?!

As the U.S government continues to crack Down on the crypto industry crypto Investors are scrambling to try and Predict which crypto project or company Will be next in the crosshairs of Regulators like the SEC A recent Congressional hearing about Last year's crypto crash offers some Clues about which cryptos and companies Are at risk and what the goal of this Crackdown is it's safe to say that it's Not looking good that's why today I'm Going to summarize everything that was Said during that Congressional hearing Explain what it means in simple terms And tell you what it could mean for the Crypto Market The hearing I'll be summarizing today Was titled quote crypto crash Why Financial system safeguards are needed For digital assets It was held by the United States Senate Committee on banking Housing and Urban Affairs last week I'll leave a link to The full hearing down in the description I'll also leave a link to our recent Video about operation choke point 2. I Reckon it's a prerequisite for Understanding the significance of what Was said during this hearing I'll do my Best to give you the necessary context As we go along but watching that other Video first might be the best way to go Now what's interesting is that the

Hearing about the crypto crash was only Announced earlier this month Specifically the 3rd of February this Gave the crypto industry fewer than 10 Days to find witnesses to represent the Pro-crypto side of the argument Spoiler alert but it seems that this was Too short notice The three Witnesses were Lee Reiner's Financial policy director and lecturer At Duke University Linda Jang a law Professor at Georgetown University who's Also part of a crypto lobbying group Called The crypto Council for Innovation And yesha yadav a law professor at Vanderbilt University the hearing began With opening statements from the two top Politicians on the committee side from Both political parties The first to speak was Sherrod Brown who Is known for being anti-crypto not Surprisingly he said that the events of The last year proved that he was right About it all along He pointed to just about everything you Can think of Russia and North Korea Using crypto crypto companies laying off Employees the collapse of FTX silvergate Being affected by the collapse of FTX And so on Sherrod even paraphrased Crypto.com's marketing campaign fortune Favors wealthy insiders what's Interesting is that he specified that He's been concerned about cryptocurrency

Since Facebook announced its Libra AKA DM project in 2019. if you've watched Any of our videos about crypto Regulations you'll know that this seems To be the case everywhere around the World thanks Zuck now the second Politician to speak was Tim Scott this Came as a surprise to me because I was Expecting to see Pat Toomey one of the Most pro-crypto politicians then I Remembered that Pat had retired from Politics last year at just 61 years of Age young for a U.S politician anyhow Tim's spent most of his time talking About how he wants SEC chairman Gary Gensler to testify before the committee Given his connections to FTX and the Sec's apparent inability to see fraud When it was in front of their face here Here He went on to highlight the fact that if The SEC had established some reasonable Crypto regulations then it's possible if Not likely that most of the crypto Catastrophes that occurred last year Wouldn't have happened he also said that The focus should be on Innovation and Financial literacy not regulation sounds Good doesn't it but I must caveat by Saying that Tim's heart really wasn't in It and it made me yearn for Pat Toomey All the more oh Pat why hast Thou Forsaken us now once Tim was done the Witnesses read their opening statements

Lee was the first to go and all I could Think about was how he looks exactly Like agent Smith from The Matrix Lee lived up to the resemblance because His rhetoric was possibly the most Anti-crypto I've heard at any of these Hearings He started by saying that the only thing Crypto has achieved is trillions of Dollars of losses for investors he said That only 16 of Americans have invested In crypto but failed to mention that This number was just three percent at The start of the pandemic according to JP Morgan in other words it's Exponential growth more about that in The description Now Lee went as far as proclaiming that Cryptocurrency is undermining every Single goal of the US government to be It National Security climate change or Otherwise He insisted that FTX wasn't the Exception quote the whole Barrel is Rotten he also said it doesn't matter if Crypto goes offshore that's because in Agent Smith's I mean Lee's mind crypto Is a net harm not a net good so forcing It offshore with regulations is fine it Becomes a problem for other countries He then complained about how Cryptocurrencies such as Bitcoin have Been classified as Commodities and can't Be easily regulated that's why Lee is

Calling on the SEC to create a new Definition of what a security is for Cryptocurrency a definition which would Apply to all coins and tokens even BTC In plain English Lee wants the SEC to Crack down on every single Cryptocurrency and he's even provided a Road map for them to do it Next up was Linda and I was really Hoping that she would wipe the floor With Lee unfortunately this didn't Happen although Linda is obviously Pro-crypto she seemed extremely nervous Sitting in front of U.S politicians and Did not sound convincing as a result not Only that but Linda specified that she Was testifying in a personal capacity Not on behalf of the crypto Council for Innovation this further lowered the Impact of her opening statement which Consisted of very vanilla talking points Like how the SEC shouldn't do regulation By enforcement thankfully yeshu's Opening statement was a lot more Colorful and included specific policy Recommendations She acknowledged that the collapse of FTX had reduced the trust in Cryptocurrency but argued that the Inaction of regulators like the SEC has Also reduced the Trust In regulations As such yesha boldly called for a new Regulatory framework where Cryptocurrency exchanges regulate the

Industry and the U.S government only Regulates the cryptocurrency exchanges She explained that this regulatory Arrangement exists in traditional Markets and has worked very well for Many years that's simply because under This proposed framework cryptocurrency Exchanges would be held legally Accountable for things such as the Collapse of Terror this is in stark Contrast to the existing setup where Regulators like the SEC can turn a blind Eye to sketchy entities like FTX without Being punished not bad Now with all the opening statements out Of the way the question period began Sherrod was the first to ask questions And he spent most of his time talking With Lee about how crypto can be crushed Lee revealed something scary and that's That the SEC has never lost a case Against a crypto company Lee also said Something that was even more misleading Than his crypto adoption statistic and That's that new crypto custody rules are Needed because crypto exchange users are Unsecured creditors this means that if a Crypto exchange collapses you lose all Your crypto but well I reckon we all Know that in any case this is misleading Because Lee said that if you have your Money in a bank account your money is Safe because of FDIC insurance if you Watched our video about bank balance

However you'll know your money will be Used to bail out the banks during the Next Crisis and FDIC insurance is Underfunded if all that wasn't bad Enough Linda and yesha both couldn't Provide clear answers to sherrod's Questions about things like transparency And disclosure from crypto exchanges Lee Had the final word on the matter and he Called on the SEC to require extensive Disclosures from decentralized Cryptocurrencies Such Insanity aside Tim was the second To ask questions he spent some of his Time talking about how the United States Is falling behind on crypto regulation And spent the rest of his time talking With Linda and yesha he asked them easy Questions like what the benefits of Crypto are but their answers all sucked If I'm honest Linda and yesha spent most Of their time stating the obvious like Quote the economy is becoming digital Later Linda talked about how her husband Was Irish and how she had to learn how To drive on the other side of the road It was supposed to be an analogy of some Kind but it didn't make very much sense Now the third to ask questions was Bob Menendez who is yet another anti-crypto Politician he asked how Congress should Address the regulatory Gap in crypto Lee Said that the only regulatory Gap in Crypto is that Bitcoin is currently

Classified as a commodity it needs to be Labeled a security by the SEC Yesha said that the solution was to make The crypto industry accountable and Responsible via the Innovative Regulatory framework she had proposed in Her opening statement all Linda could do Was nervously ramble now in her defense I can't imagine what it would be like to Be around people like Bob certainly Doesn't look like much fun that's for Sure Bob went on to ask whether the U.S was Falling behind on crypto regulation Yesha confirmed this is the case and Cited the European Union's upcoming Crypto regulations which are scheduled To be finalized in April Linda added That the UK Hong Kong and many others Are working on robust crypto regulations Now believe it or not but Lee said that The United States is not falling behind On crypto regulation he said other Countries are gambling with crypto Regulations because they're desperate For economic growth he repeated his Shtick about crypto doing more harm than Good National Security blah blah blah And to really drive the point home he Said he's happy that Banks aren't being Discouraged from working with the crypto Industry agent Smith is not going to Make it folks Now the fourth to ask questions was JD

Vance and he admitted that he personally Holds cryptocurrency He said that all the skepticism about Cryptocurrency reminds him of all the Skepticism about the internet when it Was getting started and he asked the Witnesses what they thought about that Lee seemed shocked by the question and Said that crypto has been around for 14 Years and has not seen the same adoption Curve as the internet he said that Crypto has no value because it has zero Fundamentals but blockchain technology Does have value Well I don't even know what to say to This all I will say is that you should Watch our video about Fidelity's Bitcoin Analysis which shows that actually yes Crypto is on a similar adoption curve to The internet that will be in the Description note that Fidelity is one of The largest asset managers in the world Anyways what's awesome is that Linda and Yeshu's responses to this question were A lot more coherent albeit slightly off Target Linda said that open source Interoperable technology will prevent The formation of monopolies she even Said to watch out for the digital Wallets being built by big Tech as for Yesha she underscored the fact that most Of crypto's adoption has occurred over The last three years something that Lee Is surely aware of but somehow omitted

During his testimony regardless yesha Cautioned that the growth of crypto has Created new risks that need to be Understood and addressed now the fifth To ask questions was Chris Van Hollen Who is you guessed it anti-crypto case In point he only had one question how do We cut crypto out of the banking system Lee revealed that banking agencies can Do this and that their joint Announcement in January was a quote good First step for reference on the 3rd of January the Federal Reserve the FDIC and The OCC released a statement basically Instructing Banks to distance themselves From the crypto industry since that day We've seen many banks do exactly that And we've seen a barrage of crypto Crackdowns from Regulators like the SEC Now the sixth to ask questions was Katie Britt and she asked the witnesses what Congress needs to keep in mind when Creating Common Sense guard rails for Crypto Linda got off on the right foot By talking about digital property rights But stumbled when she started talking About profiting from interbank exchange Rates Katie also asked how crypto can be Used to Achieve Financial Freedom Now rather than explain that Financial Freedom means the ability to own your Assets and decide how and when they are Spent Linda talked about how crypto Could help Bank the unbanked the common

Crypto catchphrase that so 2017. Katie then asked Linda about whether She's concerned about crypto Innovation Going offshore Linda said yes the crypto Industry will go offshore due to Regulatory uncertainty And then in a more serious almost Whispering voice Linda said quote or They'll go into the shadow banking Sector Anyway the seventh to ask questions was Tina Smith she said that the crypto Market had lost 2 trillion dollars in Value over the last year and that she's Concerned about the financial system she Asked Lee to explain why it's a good Thing for crypto to be cut off from the Banking sector Lee started by saying that he wanted to Address the claims that crypto can help With financial inclusion he slammed the Idea saying that the only thing crypto Promotes is losses he said that it's Ironic that crypto is trying so hard to Integrate with the financial system Considering it's supposed to be an Alternative he said that crypto is just Gambling and when multi-trillion Dollar Asset managers like Fidelity offer Crypto to pension investors they're just Selling quote lottery tickets he said It's good news that Regulators have Warned Pension funds that investing in Crypto is a breach of their fiduciary

Duties he said that Americans are lucky That U.S Regulators are doing so by Enforcement and that they must do Everything they can to make sure the Crypto industry doesn't ever get into The financial system he finished his Unhinged rent by saying that crypto must Be stopped because quote they will keep Trying definitely not going to make it Now the eighth to ask questions was Tom Tillis and he said that he's worried About regulatory overreach in the crypto Industry he said that the voluntary Implementation of proof of reserves by Cryptocurrency exchanges was a good Start and asked the witnesses what they Thought about it Lee said proof of Reserves are meaningless Linda gave a Bunch of ideas about how proof of Reserves could be done better Yeshua said that proof of reserves need To be done regularly and also disclosed Liabilities Tom revealed that the reason For the question was a proof of Reserve's Bill he's working on Then the ninth to ask questions was the Most anti-crypto of them all and that's The one and only Elizabeth Warren she Went on her own typically unhinged rent And asked Lee why criminals love crypto More than Banks Lee said that crypto Pseudonymity makes it ideal for Crime Which is ridiculous if you've watched Our video about blockchain analytics

Companies you'll know that almost every Single crypto transaction can be tracked Due to the transparency of Cryptocurrency blockchains cash on the Other hand is completely untraceable and Banks continue to be the biggest sources Of financial crime Elizabeth who's not a Fan of such facts despite knowing them Herself then called on kyc and AML rules To be applied to defy because of the Quote same risk same regulation Principle that's really popular with Individuals and institutions which are Affiliated with the world economic forum She then vowed to reintroduce a bill to Impose kyc on all of defy and also on Dows never mind the fact that the Financial action task force or fat F's Own statistics suggests that widespread Kyc has done absolutely nothing to Reduce illicit Financial activity it's Just a tool to track the average person Now the last to ask questions was Bill Haggerty who said that the U.S must Continue to focus on Innovation and Shield his own bill which will introduce Reasonable regulations for stable coins He said that the recent crypto Crackdown Reminds him of the original operation Chokeepoint thereby confirming its Severity he asked Linda what the Coordinated debanking of the crypto Industry could do to it she again said That it will push crypto Innovation

Overseas or into the shadow banking Sector she said this will make it Impossible for U.S Regulators to address And foreign jurisdictions will have an Advantage over the US so this brings me To the big question and that's what this Crypto hearing means for the crypto Market In short it's not good it's clear that The Crackdown on crypto runs Deeper Than The Regulators it's coming from Anti-crypto politicians the worst part Is that the pro-crypto politicians Aren't doing enough it honestly looks Like this crypto Crackdown is going to Get worse not better over the coming Months this begs the question of how Long it could last if you watched our Aforementioned video about choke point 2 You'll know it could last until the 2024 Election and that assumes a republican Victory Newsflash the most anti-crypto Politicians are overwhelmingly Democrat Now it's not entirely clear why this is But I suspect it has something to do With political differences in spending On paper Democrats want to spend more And Republicans want to spend less in Practice the spending is the same but Different Introducing things like Universal basic Income without causing runaway inflation Requires a technology like Central Bank

Digital currencies or cbdcs which Democrats are also overwhelmingly in Favor of cryptocurrencies particularly Stable coins which Republicans generally Support are direct competitors to cbdcs Again it's not entirely clear why this Is but I suspect it has something to do With the fact that the political goals Of Democrats tend to require lots of Top-down control whereas the political Goals of Republicans tend to require Next to no control or oversight which Comes with its own set of issues as with All things the answer to the question of Crypto regulations lies somewhere Between these two stereotypical Political extremes the problem is that Democratic interests seem to have Succeeded in appointing the heads of the Most important Regulators which are Currently cracking down on crypto this Means that it's possible that the crypto Crackdown will continue even if the Republicans get a so-called Red Wave in 2024 that's because anti-crypto Regulators like Gary Gensler will still Be there in Gary's case he'll be at the SEC until the summer of 2026 which is More than three long years away The Silver Lining is that the Suspiciously close connections between Sam bankman freed and many key Politicians and Regulators affiliated With the Democratic party could result

In their Collective removal all it would Take is a thorough investigation of These connections which the Republicans Will eventually do Then again it's quite possible that Sam's connections to those in the Republican Party are even more Concerning after all Sam was actively Working with pro-crypto politicians too With all that said one thing is for sure And that's that the crypto Crackdown in The US is going to continue for the Foreseeable future if the crypto Market Somehow continues to pump despite this Fact then I'll be very happy but I don't Think the recent price action we've seen Is going to last all that much longer if You insist on trading these rallies be Sure to check out our video about how to Spot the top that will be down in the Description I'll also leave a link to Our video about how to buy the dip Because you're going to need it sometime So until next time crypto friends take Care and I'll see you all soon foreign [Music]

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