The recently concluded Senate Banking Committee hearing with the CEOs of leading American banks was essentially a joke. Elizabeth Warren, who usually puts all the bankers on the spot for various regulatory non-compliance or unethical practices, seemed to be seeking their confirmation of her ongoing agenda in attacking cryptocurrencies.
It appeared as a very staged setup, reminiscent of when she allegedly conspired with Gary Gensler, pre-arranging both the questions she would ask during a 2021 hearing and the suggested answers to those questions.
She resembled a school teacher in front of a class, in this case, all the powerful bankers in the US, who were nodding to her questions and statements. Jamie Dimon, the most powerful banker in the world, agreed with her and even said that if he were the government, he would have banned all cryptocurrencies. This man is a walking contradiction. Since 2000, JPMorgan has paid more than $39 billion in every sort of violation a bank can commit and even more. He has no moral authority to speak on any ethical matters, administrative failures, or emerging technologies. JPMorgan themselves are promoting their coin, which uses DLT technology.
Since he is leading an institution deemed 'too big to fail,' everything is settled with money, lobbying, and their connections with all agencies and government. At no time have their license or banking activities been threatened. He is well aware of how this technology will challenge and change banking forever. He wants to delay the process as much as possible so that traditional finance can continue to flourish, or they can catch up with decentralized finance and adopt it for their own use.
Elizabeth Warren's narrative that cryptocurrencies are aiding countries like North Korea in engaging in terrorist activities is nonsensical.
In fact, with blockchain technology, every transaction can be traced to its origin and settlement. There was no cryptocurrency during the 9/11 terrorism attacks. They were all conducted with cash transactions and banking agencies. Why didn’t she take an initiative to ban the fiat system?
I believe the American public is far more educated and smarter than Warren gives them credit for. In an election year, if this becomes a major talking point and the Democratic Party throws their weight behind controlling cryptocurrencies, they stand to lose much. I am confident there will be enough intelligent people within the party who will overcome the challenges posed by people like Elizabeth Warren, Brad Sherman, and Maxine Waters. At the end of the day, people vote with their wallets. Currently, about 56% of American households are involved in cryptocurrencies in one way or another. While I am not invested in Bitcoin, it is a fact that Bitcoin has outperformed all asset classes in the last decade.
Imagine if the SEC had approved the spot ETF when applications were filed in 2011 and Bitcoin was around $100; retailers could have benefited immensely. But, as we all know, it is not in the interest of the SEC to protect retail investors or create capital formation. If it were, they wouldn’t have allowed the FTX and Terra Luna incidents to occur as they did. Instead, they have targeted legitimate and well-regulated companies like Coinbase and Ripple.
Fortunately, the courts have recognized the SEC’s bluff and have stepped up to make the right judgments. The SEC has practically lost all the major cases in the last year. The final blow will be if they lose to Coinbase (which I think they will) and in the last part of the Ripple case. The recent allegations against a relatively unknown crypto company named Debt Box and how the Utah court dismissed the case, reprimanded the SEC, and even threatened to subpoena them, shows the extent to which the watchdog has fallen in the eyes of the courts and the public.
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Abraham George is a seasoned investment manager with more than 40 years of experience in trading & investment and multi-billion dollar portfolio management spanning diverse environments like banks (HSBC, ADCB), sovereign wealth fund (ADIA), a royal family office, and a hedge fund.