The True Cost of Hostile Crypto Policy: A Rebuttal to Biden-Era Legacy

Former economic advisers to the Biden administration, Ryan Cummings and Jared Bernstein, have penned an opinion piece for the New York Times, claiming that the decline in bitcoin's price is a vindication of the administration's crypto policy. However, this argument has been criticized for being based on selective memory and omission of crucial facts. The authors' portrayal of the Biden administration's regulatory efforts as 'aggressive' has been disputed, given the rise of FTX and the lack of clear rules, which led to the demise of legitimate businesses and the thriving of bad actors. The administration's strategy of 'regulation-by-enforcement' rather than establishing clear guidelines had a perverse effect, driving companies offshore, harming consumers, and stifling innovation. The authors have also been accused of ignoring the 'Operation Choke Point 2.0' episode, where banks systematically debanked lawful crypto businesses under pressure from federal regulators, without due process or legislative authority. Furthermore, the authors' dismissal of crypto as a 'painfully slow and expensive database' with 'almost no practical use' has been challenged, given its potential for fast and low-cost cross-border remittances, which can greatly benefit migrant workers and their families. The Biden administration's approach to crypto regulation has been criticized for being hostile and ineffective, with the authors' claims of no 'giant tech firms' using blockchain technology being proven wrong. The op-ed's focus on short-term price movements to condemn an entire asset class has been deemed analytically unserious, and the labeling of the Bitcoin network as 'slow' has been countered by its security benefits. The authors' repeated invocation of a taxpayer-funded bailout of the crypto industry has been dismissed as a straw man, and their concern about moral hazard has been questioned given the Biden administration's guarantee of all deposits during the Silicon Valley Bank collapse. The op-ed's implication of corruption due to crypto industry political donations has been challenged, with the suggestion that advocacy for favorable regulation through political participation is a cornerstone of American democracy. Ultimately, the Biden administration's approach to crypto regulation has been criticized for being a missed opportunity to establish clear and fair rules, instead choosing to 'weaponize' the banking system against a legal industry, resulting in a lose-lose-lose situation for innovation, consumer protection, and the U.S. crypto ecosystem.