How does this affect the rest of Crypto, because I suspect that governments around the world can shutdown Bitcoin and others any time they want. Given that fact, I'm wondering why other crypto currencies are being tolerated.
Part one would be a note of the laws establishing the Treasury Department's mandate to regulate financial instruments.
Part two would be a finding that cryptocurrencies are harmful to the interests of the USA.
Part three would be an order to the Secretary of the Treasury to determine what businesses are involved in cryptocurrencies, and to take the following sanctions: ...
prohibit any transfers of credit or payments between financial institutions, or by, through, or to any financial institution, to the extent that such transfers or payments are subject to the jurisdiction of the United States and involve any interest of the sanctioned business;
prohibit any United States financial institution from making loans or providing credit to the sanctioned business;
(iv) prohibit any transactions in foreign exchange that are subject to the jurisdiction of the United States and in which the sanctioned business has any interest;
(v) prohibit any United States person from investing in or purchasing significant amounts of equity or debt instruments of the sanctioned business;
Form and specific sanctions taken from EO 2021-27505, from December 17 2021.
"Untestedly" being the important part. There is no practical limit on the orders that can be issued but actually enforcing those rules on anyone outside the executive branch is a different matter. Also, you skipped over the parts of EO 2021-27505 where (a) it required declaring a (rather dubious IMHO) state of emergency, (b) the sanctions were previously authorized by Congress in the Fentanyl Sanctions Act, and (c) all the sanctions applied to "foreign persons", not citizens. There is no state of emergency, sanctions were not authorized by Congress, and you want to sanctions citizens of the United States and locally-owned businesses.
Also Japanese American internment camps.
You think shutting down Coinbase is bigger than that?
The minute the fed considers Bitcoin and crypto to be a risk, they'll axe it. Coinbase or not.
I think the CIA likes having Bitcoin as a means for foreign nationals to exfiltrate money. That's harder to do now in certain countries, but still possible.
And the FBI likes being able to watch where the money flows.
Alcohol you can drink
Yes, but I thought the whole point of prohibition (unless you're living in that weird period between 18th amendment and 21st amendment) is that it was a terrible idea, never to be repeated again.
> The minute the fed considers Bitcoin and crypto to be a risk, they'll axe it. Coinbase or not.
This doesn't make sense, you presume that Fed has zero understanding of consequences of their actions.
Fed may consider something to be a risk and yet not act on it. Just because they haven't acted on it, doesn't mean they don't consider it to be a risk.
Not to mention that it would be extremely easy for the FBI to just, like, find miners and tell them to shut stuff down (at least US miners). A coordinated worldwide effort and bitcoin dissapears overnight.
I think the only way to stop bitcoin is economically, like say Satoshi appears destabilizing the market.
That said, there is an early wallet that is attributed to Satoshi with a giant amount of early mined BTC in it. If it ever moves, people will flip out.
https://en.wikipedia.org/wiki/Satoshi_Nakamoto
"Nakamoto owns between 750,000 and 1,100,000 bitcoin. As of November 2021, that puts his net worth at up to 73 billion US dollars, which would make him the 15th richest person in the world.[21]"
There's also the issue that, if governments are seizing the mining hardware, if they gather enough of it they could perform 51% attacks against the chain to effectively prevent it from working.
Similarly, I've watched several retro-game preservation communities[1] I've been a part of disappear mysteriously overnight. Certain sets are still very difficult to find on public trackers and the private ones are difficult to get into.
In other words, they may not be able to eliminate it but they can make it very inconvenient.
[0] Yes, I know this isn't backed by bittorrent.
[1] Backed by bittorrent but having little to do with Hollywood.
[2] Actually I guess Exodus was first. I always forget which one was the fork.
In the end, it _is_ still illegal activity, where being "inconvenient" is typically par for the course.
BTC does a perfectly good job of this on its own, no state intervention needed.
None of this will happen, as governments aren't this united. Even within the US there's crypto-friendly and crypto-hostile states. Right now, Bitcoin is explicitly recognized as an asset/commodity, not as a currency. Property, not a security.
There's definitely regulation pending regarding crypto. In particular, many non-Bitcoin cryptos are likely securities. Stablecoins backings are to be regulated. And there may be mining regulation where it's not outright banned, but (CO2) taxed.
Could the government legally restrict me from solving a math problem?
If mitigating the CO2 produced by using some energy isn't priced into that energy, that's the fix. We absolutely need to incorporate externalities into prices.
No, in the same way there isn’t for money laundering or wire fraud.
Calculating a hash for Bitcoin and then broadcasting it assumedly has the same level of First Amendment protection as calculating a hash for someone else's password and then broadcasting it.
They can 'regulate' it by banning Proof-of-Work mining for 'climate change' reasons and then it will be outlawed or heavily taxed, just like in China, Kosovo, Kazakhstan and possibly Russia.
Sure, Bitcoin (and any other cryptocurrencies) can't be totally 'banned', but enough to discourage mining and using PoW cryptocurrencies via legislation or taxes.
But one thing the US is regulating is money laundering - the US sanctions regime is super-important. So FinCEN in the US and FATF internationally are tightening traceability on the crypto system, wherever it interfaces to actual money. 'Cos they might not be able to stop bitcoin trades, but the interface to actual money is entirely in their purview.
The one thing the US couldn't tolerate about Libra was that Facebook was trying to mess with the money, at systemic scale - and doing so incompetently, which was probably a worse failing.
Regulators and legislators had Libra's number immediately - they knew this species of dumbassery, and they knew that these bitcoin-VC bros were absolutely stupid and arrogant enough to do another 2008 financial crisis all by themselves.
I understand that the whole concept of committing crime was a bit clearer in LR than it is in Tether, but Tether sounds like what LR would have been, after they learned from their mistakes?
Yes, just as they can shut down movie downloads on BitTorrent.