Can crypto really prevail against the titanic forces that control the global financial system?

If like me, you look at events over the last 12 months in the crypto space or so with a jaundiced, highly sceptical eye, you may have also begun to wonder whether there is a conspiracy at play here or whether events playing out have been truly random. I have read other authors and industry experts speculate that it’s an operation by the USA Government. They have even given it a name...” Operation Chokepoint 2”. The reference here is to a policy “Operation Chokepoint” implemented under the Obama administration to limit gun ownership. There were a series of enforcements undertaken against gun manufacturers and steps taken to make it difficult for them to secure banking facilities amongst other coordinated actions taken against the industry. The objective was to make it very difficult for gun companies to do business. The policy was challenged in the courts and deemed to be unconstitutional. So, have we really got the same thing happening here and if so, why? The obvious motive that the Government may have is to protect the reserve currency status of the US dollar and the significant privileges the USA enjoys as a result of this status. The events could potentially serve as a delaying action which impedes the adoption of crypto, giving time for USD to be replaced with a USD CBDC. The reasons for actually wanting to implement a CBDC as an endgame is a whole other conspiracy and not one that we will consider here.

Let’s first look at some of the inconveniences and seemingly unrelated events that have occurred:

Failure of crypto-friendly banks: The failure of crypto-friendly banks, such as Signature Bank, has made it difficult for crypto businesses to obtain essential banking services. This makes it difficult for crypto firms to conduct financial transactions and limits on and of ramps into crypto for customer wishing to move between crypto and fiat,

Regulatory uncertainty: The absence of comprehensive regulatory guidance has impeded companies' ability to make informed investments. The SEC has not defined which cryptos can be considered securities and seems to be systematically undertaking enforcement actions against the largest and most powerful players. No doubt this has depressed share prices of listed crypto-related companies like Coinbase and has hurt the prospects of firms such as Ripple Labs, Library and Kraken. As a result of these actions, many of these firms have announced that they may leave the USA.

Rise and Fall of FTX Exchange: FTX Exchange came from nowhere in the last few years, received huge institutional backing and became one of the largest players in the world. Its CEO, SBF was touted as a crypto ‘wunderkind’ and had an active voice in lobbying Government for favourable regulation. FTX and its subsidiaries was then exposed as a fraud and spectacularly collapsed. As it imploded, it caused substantial collateral damage in the industry, significantly undermining trust in the sector and providing justification for the SEC to take a hard-line enforcement position. Was this a Trojan Horse with a specific role to play? I speculate that it played a large role in lending activities with counterparties such as BlockFI and was also one of the counterparties (Alameda) involved in the attack on Terra/ Luna. It used its ‘shitcoin’ token FTX to suck lots of liquidity out of the system from hard assets such as BTC to create systemic points of failure in the crypto industry. The house of cards was then spectacularly toppled to reveal the untrustworthy nature of crypto business. All with the purpose of reinforcing our need for established banks as our trusted counterparties and regulations from US Government agencies.

I find the coordination scenario highly credible but if its not the USA Government behind this then who else could we credibly consider. Let’s go into “Keyzer Soze” mode now and consider the usual suspects.

Rich banking elites: This group, with a vested interest in maintaining the current financial status quo, may view cryptocurrencies as a threat to their control and dominance. By impeding crypto's growth, they could safeguard their power and preserve the established financial order. Seems to me a credible group but this is one and the same as the USA Government since they are controlled and dominated by a handful of powerful banking families. The USA Government is just a vehicle for rolling out their policies.

Central Banks: This group who are notionally responsible for monetary policy and financial stability, may perceive cryptocurrencies as a challenge to their control over national currencies. Delaying crypto's growth would buy them time to develop their own CBDCs and maintain their authority. Well, this group is controlled by the same rich banking elites who in turn control the USA and other Governments.

Established Financial Institutions: Traditional banks and investment firms could perceive cryptocurrencies as disruptive to their business models. Hindering crypto growth would allow them more time to adapt strategies, develop their own crypto-related offerings, or influence regulations in their favour. Whilst these institutions are listed corporations with shareholders, they are controlled by the same banking elites that control the central banks and the Governments.

Other Nation-States: Governments with centralised control over their economies might view widespread crypto adoption as a potential loss of economic sovereignty and regulatory control. They could support efforts to delay crypto growth to protect their national currencies and maintain control. Other nation states are largely dominated by the USA Government and therefore by the same forces that control the USA Government, apart from obviously China and Russia.

For me, all roads lead to the same place. Where this gets me to is to become convinced that the events have been coordinated by incredibly powerful ‘off-stage actors’. The same agents that ultimately will benefit from the control that a coordinated rollout of CBDCs will deliver and who control the banking system today globally and by extension world Governments. Will they ultimately succeed? I am optimistic that in the end they will not prevail, but they will not back down without a fight. I think we can expect a rough road ahead for the next few years, but the decentralised nature of Bitcoin will ultimately be the deciding factor. It is we the people who get to decide and we can vote on this by opting out of the current system and supporting the new emerging crypto ecosystem. This is our best hope for freedom and prosperity.

What do you think? Am I paranoid or are we experiencing a coordinated attack on crypto by an “off-stage” powerful player?