Jake Chervinsky: regulatory surge does not spell the end of the US crypto industry

The sequence of hostile moves by US regulators toward the crypto industry was predictable after 2022, but this can be fought, said Jake Chervinsky, policy director at the Blockchain Association.

1/ After a streak of hostile moves by US regulators, with rumors of more to come, fears of a crypto crackdown have never been higher.

It may be tough, but we can chart a path through it.

Let’s discuss the state of crypto policy: what’s happening, why, and what we do next 🧵

— Jake Chervinsky (@jchervinsky) February 14, 2023

According to the expert, the string of negative events, crowned by collapse of FTX, dealt a heavy blow to the industry’s reputation. Chervinsky reminded that for many politicians in Washington the founder and head of the exchange was “the face” of the industry. Alleged fraud by Sam Bankman-Fried largely changed lawmakers’ attitude toward cryptocurrencies.

According to Chervinsky, influential federal bodies such as the Financial Stability Oversight Council and the President’s Working Group have spoken in favour of uniform rules for the industry by Congress. Much of this did not happen because of ideological differences between the Republican-controlled House and the Democratic majority in the Senate, the lawyer believes.

He argues that in this situation banking and market regulators have taken on a more active role. Chervinsky particularly highlighted SEC, which he regards as the main adversary of the crypto sector among US agencies.

The expert believes that the Commission will continue its policy hardline measures toward industry participants. The recent Kraken case, which settled the SEC’s claims against its staking service through a payout of $30 million, will not be the last, Chervinsky says.

He noted that the community has an opportunity to counter the regulator’s strategy. To this end, the following measures are needed:

• launch public discussions that agencies will be compelled to listen to;
• bring lawsuits against agencies when they overstep their powers or violate constitutional norms;
• facilitate education of members of Congress so that most lawmakers have an accurate understanding of cryptocurrencies;
• assist Congress with legislative proposals;
• seek allies in the judiciary, because with digital assets the protection of civil liberties is at stake.

“The road ahead is difficult, but I have never been more optimistic about the future prosperity of the crypto industry in the United States,” concluded Chervinsky.

21/ The path forward is challenging, but I
m as optimistic as ever that crypto will flourish in the USA.

If you’re a US crypto company looking to help, reach out to us at @BlockchainAssn.

If you’re anyone who cares, consider donating to @fund_defi and @coincenter.

✌️

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— Jake Chervinsky (@jchervinsky) February 14, 2023

In January, the Biden administration urged Congress to ramp up oversight of the digital-asset market.