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Bitcoin Government United States

Kraken CEO Warns a Crackdown On Cryptocurrencies May Be Coming (cnbc.com) 77

Posted by BeauHD from the crystal-ball dept.
Jess Powell, CEO of Kraken, the world's fourth-largest digital currency exchange, warns that governments around the world may start to clamp down on the use of bitcoin and cryptocurrencies. CNBC reports: "I think there could be some crackdown," Jesse Powell, CEO of Kraken, told CNBC in an interview. Cryptocurrencies have surged in value lately, with bitcoin hitting a record high price of more than $61,000 last month. The world's most valuable digital coin was last trading at around $60,105. [...] Kraken's chief thinks regulatory uncertainty around crypto isn't going away anytime soon. A recent anti-money laundering rule proposed by the U.S. government would require people who hold their crypto in a private digital wallet to undergo identity checks if they make transactions of $3,000 or more.

"Something like that could really hurt crypto and kind of kill the original use case, which was to just make financial services accessible to everyone," Powell said. Cryptocurrencies like bitcoin have often been associated with illicit activities due to the fact that people transacting with it are pseudonymous -- you can see where funds are being sent but not who sent or received them. "I hope that the U.S. and international regulators don't take too much of a narrow view on this," Powell said. "Some other countries, China especially, are taking crypto very seriously and taking a very long-term view."

Kraken's CEO said he feels the U.S. is more "shortsighted" than other nations and "susceptible" to the pressures of incumbent legacy businesses -- in other words, the banks -- that "stand to lose from crypto becoming a big deal." "I also think it might be too late," Powell added. "Maybe the genie's out of the bottle and just trying to ban it at this point would make it more attractive. It would certainly send a message that the government sees this as a superior alternative to their own currency."
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Kraken CEO Warns a Crackdown On Cryptocurrencies May Be Coming More

Kraken CEO Warns a Crackdown On Cryptocurrencies May Be Coming

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  • Even if the value goes down slightly because of the panic, it will eventually shoot back up as people realize the government can't fuck with it. Also, have your passports ready I guess? There will always be other nicer countries in the world and we don't "HAVE" to be in the US. The government serves us, not the other way around.

    • Re:Please Ban Bitcoin (Score:5, Informative)

      by RightSaidFred99 ( 874576 ) on Monday April 12, 2021 @06:16PM (#61266078)

      it will eventually shoot back up as people realize the government can't fuck with it

      Lol. I'm not entirely sure if you're joking or not or if this is some sort of meta-sarcasm. Of course the government can fuck with it, up to and including all but sinking it completely if they wanted to. This includes simple shit like taxing it all the way to making it illlegal or very difficult to convert to fiat currency and back, and all sorts of other shit in between or maybe even worse.

      I don't know where this delusion that Bitcoin/et al. are beyond the reach of governments. They are, 100% I promise you, not. I mean, I guess if you and 20 of your buddies want to peddle funny money between yourselves their options are limited but that's not really an issue either way.

      • Indeed.

        The mere announcement, that Americans and corporations that do business in America that own bitcoin will be subject to a 25% property tax on their bitcoin holdings every year, would instantly shatter the market globally.

        No need to make it illegal. Sure, people can be all black market about it, but corporations generally cant, and certainly not if bitcoin is integral to their official business.
      • indeed, i can't open up an account on anything with a cryptowallet without having to upload my id , proof and my sisters panties too in some places, lately its been moving to "if you want a crypto wallet to withdraw to, send us proof that it is yours" and when i say lately i mean like a year or so (be-ne-lux europe) . There's nothing anonymous about it in any way and they all gotta hand it to the gov't (this is soviet land after all) but it doesnt seem to curb crypto enthusiasm (although christies and sothe

      • Re: (Score:2)

        by gweihir ( 88907 )

        Crypto-"currencies" are already subject to property taxes here and any raise in value is subject to income tax.

        The crypto-morons just do not get how things work in the real world. Sure, governments are slow. But they will not overlook something like this.

    • Re: (Score:3, Interesting)

      by rtb61 ( 674572 )

      Get real, they can kill it over night by making it illegal for any financial institution to allow trades of real currency for fake crypto ponzi currency and unbacked crypto is D E A D. The true value of crypto, can not convert it to real money and it is worthless.

      Not to deny the great marketing con but hey the majority of mud monkeys are believers and can be conned into anything as in magical sky being over their planet dominating an entire universe of galaxies (believe that they will believe anything, hen

      • Re: (Score:1, Troll)

        by AmazingRuss ( 555076 )
        Bitcoin is backed by one thing and one thing only: Greater Fools.

        • Re: (Score:2)

          by gweihir ( 88907 )

          Bitcoin is backed by one thing and one thing only: Greater Fools.

          Hmm. Great fools are in ample supply in the human race, so given supply & demand, they are pretty worthless...

      • If you look at it purely from a money laundering perspective, government cannot actually do that much as long as some place takes it for something useful. It is kind of like art in that way— the only intrinsic value is what someone else is willing to pay for it. Gold traders had similar systems, where they keep a book that reconciles transactions between dealers where no physical exchange takes place. Bitcoin works much the same way— you just need enough transactions that go in different dire

        • Can I pay my mortgage with it? Can I pay my taxes with it? Would I (or you) be comfortable being paid entirely in it?

          So far as I know, all of those questions have the same 2 letter answer.

          • But that is not a fair comparison— you would neither want your mortgage or salary denominated in Bitcoin in the first place. Are you in the market for the Mona Lisa?

      • You have no clue about Crypto.

    • Maybe they can't fuck with bitcoin, but they can sure as fuck fuck with you if they catch you with it.

    • This is the same Pump/FUD cycle that has been going on every since people discovered they can exchange their real money for digital tulips. Today the headlines are "China looks to fuck Bitcoin in the ass!", tomorrow it's "Elon Musk tweets he will personally get in his Tesla and deliver a free Impossible Burger for every dollar you invest in Bitcoin, holy shitballs!".

      ..and people still fall for it. Le sigh.

    • Also, have your passports ready I guess? There will always be other nicer countries in the world and we don't "HAVE" to be in the US.

      Which ones? Why aren't you there now?

      The government serves us, not the other way around.

      You might be in for a shock if/when you move.

    • Try to buy something with an ounce of cocaine and then tell me whether or not the government can dictate what you can buy things with.

      Or ask yourself this - "Can I pay my mortgage with it?" If the answer is "no", it ain't money and you should stay away from it.

    • They are inflationary hemorrhage devices. You can print money and hide inflation via parking it in these, until it's time to blow the bomb and devastate the host nations currency through overnight runaway inflation. Financial WMD.

      • A large government, say China's, could supply the resources needed to take over 51% of the processing and manipulate it in any way they wanted. Including the evisceration of a rival nation. Yeah, that's a problem.

  • Good (Score:3, Insightful)

    by rsilvergun ( 571051 ) on Monday April 12, 2021 @06:03PM (#61266022)
    there's no upside to Crypto. It uses a ton of electricity and mountains of custom electronics (forget the GPU shortages, think about all those ASICs that'll be filling landfills in 10 years either due to obsolescence or the crypto fad dying). It's value is based almost entirely on a combination of money laundering, illegal drug purchases and "Greater Fool" investments. Hell thanks to those drug purchases we now have people who are incentivized to keep marijuana illegal (and don't think the thought hasn't crossed some minds that the value of crypto coin would collapse if people could safely buy weed with cash, card or PalPal).

    As for being the libertarian dream of bypassing fiat currencies, good luck with that. There's no shortage of papers & write ups explaining how with a few billion dollars and some run of the mill currency manipulation tactics you can do whatever the hell you want to the price of Bitcoin and Ethereum, let alone the tinier ones like Dogecoin. There's a reason we have fiat currencies: They're backed by the force of laws to protect them from that kind of manipulation.

    What scares me is talk of paying people in crypto coin. That would easily transition into 21st century company script. If you don't know why that's a bad thing google some and read up on the history of company towns.

    • Re: (Score:2)

      by crgrace ( 220738 )

      But number go up. Your argument is invalid.

      • Re: (Score:1)

        by rtb61 ( 674572 )

        Just wait until the IPO has happened, what they do to you next, will be no laughing matter. The price of crypto has been pumped to pump the IPO and then they always bet the crash as they sell.

      • Re: (Score:2)

        by nyet ( 19118 )

        There is literally no reason crypto can't be used to build a public consensus ledger for a pegged (or fiat), wrapped currency w/o PoW

    • The funny part is that the government crackdown was announced as being on "money-laundering, terrorism funding, and other illegal activities" and the head of a bitcoin exchange translated that as a "crackdown on cryptocurrencies." In the end he may be doing himself any favors by admitting he knows that is all it is good for.

    • Re: (Score:3, Insightful)

      by Powercntrl ( 458442 )

      What scares me is talk of paying people in crypto coin. That would easily transition into 21st century company script.

      You bring this up in every cryptocurrency discussion and it's just paranoid lunacy. There's a lot of reasons why getting your salary in the form of a major (Bitcoin/Litecoin/Etherium/etc.) cryptocoin would suck, but being forced to spend it only inside a company town isn't one of them. The decentralized nature of cryptocurrency makes it fungible by any entity willing to connect to the network. If Disney Dollars or Canadian Tire Money were cryptocoins, I'd be willing to accept them as "money", as long as

      • What makes company script what it is is the ability of your boss to control what your wages are worth.

        Crypto value is easily manipulated by large players because it is finite. There's either only so many coins that can be mined or so much "stake" in the proof of stake.

        Combine that with little or no regulation and all it takes is one billionaire to step in and they can effortlessly control the value of the currency to their advantage.

        That's why I said "21st century company script". Same basic eff

        • So, you're someone who controls enough wealth to manipulate a major cryptocurrency, and the most profitable use you can think of for that power is to cheat your minions by paying their salaries in crypto?

          That's like having a nuke pointed at Washington, and making your ransom demands a peanut butter and jelly sandwich. Oh boy, that line is probably going to get me on some watch list now.

          • is to control the value of their assets and liabilities, effectively enslaving them to me. Like company script did. It gives me near total control over the most fundamental aspect of human trade: value.

            You need to stop thinking in terms of money and start thinking in terms of power.

            • Nobody is going to lose billions of dollar manipulating the value of something on an open market... just to attempt to devalue the wages they pay.

              • 1. They're not going to lose money in the long run and 2. It's not a lot of money to them.

                See, this is the problem, you can't think like a billionaire. It's beyond anything you can comprehend. Heck I don't really get it, but I can observe what they do and learn to anticipate it. Like watching particle motion or something.

    • It uses a ton of electricity

      Its worse than simply being inefficient. Bitcoin is specifically inefficient by design, such that the system even grows exponentially more inefficient over time.

      If you were the devil and you wanted to foil gods plans, one way to do it might be to greatly increase the rate of entropy growth in the universe, and something like bitcoin would be a good first try.

    • Re: (Score:2)

      by nyet ( 19118 )

      You understand there are proofs other than PoW?

      • and they're just as prone to market manipulation even by modest sized players, let alone the sort of people who would get involved if Crypto ever became a serious challenge to fiat currencies.

        • Re: (Score:2)

          by nyet ( 19118 )

          So you can't think of a single way to implement distributed consensus w/o centralized banking system, which is manipulated by the very same "sort of people"?

          Is it possible that distributed consensus, even if it can still be manipulated by market makers (who notionally should only be providing liquidity for efficient trade settlement) has advantages over a centralized banking system that is *entirely* (and not partially) run by oligarchs?

          Or is it you that you really have no idea how any of this works, and yo

          • Billionaires represent an almost unfathomably strong power structure. Jeff Bezos has more power than most nation states. Without a strong nation state to act as a bulwark against that power it will be exercised to our detriment.

            If Crypto or any other of these "distributed consensus" systems get popular enough to matter the billionaires will step in to take control. There's no magic here. In a market driven by value and wealth (as opposed to voting power and instructional checks and balances) a sufficien
    • Company script? All the crypto (that I take seriously) is open source. There is no company/country border/silo.

  • Who frequent this site should love crypto currency. They worry constantly about being spied on but think privacy coins are tulips.

    • If I use actual coins or paper money, you might be able to find out how much I have, but you can never tell what I've used it for. Your supposedly private "coins" can be traced back to the moment of their creation if someone can connect you to the wallet. That means there's a complete, unfalsifiable, unarguable accounting of everything you've done that can be used to hang you. All anyone needs to do is show that you had access to a wallet from which illegal payments were made and you will be convicted.

  • Say what? (Score:2, Insightful)

    by quonset ( 4839537 )

    and kind of kill the original use case, which was to just make financial services accessible to everyone,"

    What does that even mean? Anyone above the age of 18 has access to financial services. I had a bank account before that age because I was working.

    Here's a question. If someone doesn't have access to financial services, how are they supposed to buy/use a crypto currency? Last I checked, you can't scan a dollar bill and tell someone, "Yup, here's the dollar. Now give me that fraction of a bitcoin."

    • Here's a question. If someone doesn't have access to financial services, how are they supposed to buy/use a crypto currency?

      They're envisioning a potential future where people get paid in crypto, and hold it in their crypto wallet until they need to spend it (everyone accepts being paid in crypto in this fantasy, just go with it), and by some fucking miracle (probably elven magic, or aliens), the buying power of that crypto hasn't changed much in the interim. This takes too much suspension of disbelief for my tastes.

      • Here's a question. If someone doesn't have access to financial services, how are they supposed to buy/use a crypto currency?

        They're envisioning a potential future where people get paid in crypto, and hold it in their crypto wallet until they need to spend it (everyone accepts being paid in crypto in this fantasy, just go with it), and by some fucking miracle (probably elven magic, or aliens), the buying power of that crypto hasn't changed much in the interim. This takes too much suspension of disbelief for my tastes.

        The funny part is when you ask the Crypto nerds for a counter-argument to this and there simply isn't one. Seriously, I'm willing to be wrong here, but how can Bitcoin (not Blockchain) be anything but a failure long term?

      • Buffett said he wouldn't invest in it because he didn't understand it. I understand the concepts, but still don't see how anything makes it a rational unit for representing and exchanging value.
    • There are 2.5B unbanked people in the world.
      • And cryptocurrency changes that how? By giving them a virtual wallet to store virtual cash instead of using an actual wallet with actual cash? What's the difference? Is there a real bank that magically appears for them, or does it simply make tangible assets intangible? How are they digitizing their cash to buy crypto if not through a bank? A brick-and-mortar broker who takes a big chunk?
        • When a (shall we say) modern cryptocurrency is used with smart-contract technology it's possible to supplant traditional banking services, which include deposits and loans. If unbanked people 'bank' using cryptocurrency then they can participate directly in investment (to loan seekers). Finance is becoming democratized.

  • Two things your tech startup can buy (Score:3, Interesting)

    by Hadlock ( 143607 ) on Monday April 12, 2021 @06:17PM (#61266092) Homepage Journal

    1. Airtime on MSNBC

    2. This "story" on slashdot

    If there's a startup you've never heard of before and they were listed on CNBC + Slashdot on the same day, I can almost guarantee you they bought the services of a certain PR firm based out of a Pine St office in San Francisco.
     
    Nothing to see here, move along

  • There's a Pirates of the Caribbean joke in there *somewhere* ...

  • Currencies like US$ cash have often been associated with illicit activities due to the fact that people transacting with it are anonymous.

    • Re: (Score:2)

      by Sebby ( 238625 )

      I'd say there's greater risk with cash of getting caught, since it has to physically change hands; but that's never stopped criminals from still using it for "illicit activities"

      The difference with crypto currencies is that's it's easier (less risky) for the "changing of hands" thing, so as a result could potentially have a higher association with such; of course, once it becomes more mainstream, that ratio of association will go down drastically.

    • I would say cash has been around forever and it in every country and it less tracible AND is FAR more disaster proof since you don't require electric and internet and your nation to not all of a sudden decide to block the bitcoin nodes and online wallets. Digital currency's end game is always going to be that the use it track you more. That's why China loves it. I also don't trust this newbie/amateur run markets with any real money because hackers/lack of backups/major global disasters that knock out inter
  • Yeah, the services of black markets sales, money laundering and dodging taxes. If it wasn't for those 'services' it would be nothing more than the new less regulated but not really much easier to use Western Union replacement and even then you're talking about a lot of people sending money without paying taxes. Seems to me it helps rich assholes and black market money launder/sanctioned dictator types the most AND that BIG MONEY is what keeps the entire thing afloat and able to be this weird speculative di

  • I'm still waiting to hear a good explanation of what benefits cryptocurrencies offers me. Like this article mentions "access to financial services". But what exactly does that mean? It feels like I DO have access to financial services, so what am I missing?

    • Shhh! You'll have access to some unsubscribed thing which we can't provide detail of right now. The important thing to know is that you are missing out, but if you send me real money, I'll sell you some Flooz...

  • That would be great (Score:5, Interesting)

    by BeerMilkshake ( 699747 ) on Monday April 12, 2021 @11:52PM (#61267180)

    A crackdown would help push customers away from centralized exchanges like Kraken and toward decentralized exchanges. It would also encourage people to move to Monero.

    Such a move would seriously hurt the recent multi-billion-dollar investments in Bitcoin recently by JPMorgan, PayPal, Goldman Sachs, Micro Strategy, VISA, Tesla and many other biggies including banks and governments around the world. Fuck them all - it would be great if the rich crowd learned the joy of suffering with cryptos and regulatory shifts.

    Crackdowns and bans have worked great at marketing the cryptos and bringing fresh interest, only to buoy the price every time. So go to it gov, please.

    • Re: (Score:1)

      by Anonymous Coward
      Bitcoin is designed to triumph. Monero is another shitcoin; Adding a random y feature doesn't make the 'token' created with it relevant. XMR is just playing with a cryptography unsuited to be used on the base layer. In other words, Bitcoin will never be updated with this cryptography.

      A shitcoin is anything promoted as a form of money whose supply is easy to increase. In other words, anything other than gold or bitcoin.
  • Just a pile of bits, no real value to be at the current pricing.

    I blew it back when it started.
    Had $100 in my pocket and price was $0.10 and said it was just a fad to co-workers.
    Today that would well over $60M and it would still be just a file of bits.

    Shut it down !

  • Recently I've been running into people who are all starry-eyed about the potential of making a fortune in Bitcoin, but realize that they are coming rather late to the party at $60,000 per unit.

    No problem, they tell me. They are buying into one of the many new cryptos out there, one whose "price hasn't been driven up yet!" What they don't realize is that the total crypto market of 900 different coin types - oops, as of this moment it's already over 4,000 - violates the most basic rationale for cryptocurrency

  • "Something like that could really hurt crypto and kind of kill the original use case, which was to just make financial services accessible to everyone," Powell said."

    Right. The original use case wasn't for libertidiots and others who wanted to avoid paying taxes. Oh, no, not at all (pasture pastries). And it was instantly leapt on by money launderers and the black market. Nope, nope, nothing to see here.

    And, of course, it's the ultimate stock - there is no physical anything, nor a game, it's all a Ponzi sch

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