On the 14th of February 2023, Jake Chervinsky posted on Twitter asking people not to worry, stating that it doesn’t spell doom for the crypto space.
2/ Before we start, some comfort for the concerned:
The recent flurry of activity is jarring, but it's not a surprise and it doesn't spell doom for crypto in the USA.
Far from it: we have champions in key roles across government, and our industry is strong and ready to fight.
— Jake Chervinsky (@jchervinsky) February 14, 2023
In his thread, Jake Chervinsky, General Counsel for Compound Labs, inc acknowledged the fears of an impending crypto crackdown triggered by a streak of hostile moves from US regulators with more rumored to come, yet he was quick to dispel fear stating that a clear path can be charted through the rough times.
He went on to describe the disaster which was 2022 in terms of the health of cryptocurrency in what he referred to as the worst year in history from a policy perspective which ended in the collapse of FTX
FTX meltdown contributed tremendously to the damage of crypto reputation as Sam Bankman-fried was perceived to be the face of crypto and his fraudulent schemes castecastadow on the entire industry which has led regulators to be inclined toward action.
With congress divided, Agencies are stretching their authority with the two most active groups being, the banking regulators (Fed, FDIC, and OCC) and the financial market regulators (SEC and CFTC).
Banking regulators want to ensure that a turmoil such as that of last year can never have the ability to affect the traditional financial system with little thought to how harsh or extreme the measures they decide to take might be. An example of such a measure is the joint statement put out on January 3 saying that banks are not allowed to conduct crypto-asset-related activities.
While Financial market regulators like the SEC have been a consistent thorn in the side of crypto for years. Their modus operandi consists of two points, every asset with a market price is a security and every commercial service is a securities transaction and they regulate mostly by enforcement.
Chervinsky went further to outline a few solutions that could be employed, he urged everyone in the crypto community to participate in the public process as regulators have to consider public opinion before finalizing new rules. He also suggested that agencies should be taken to court if they fail to observe the due process or infringe constitutional rights. He also proposed education of congress and assisting them to do their job.
To end his thread he proposed litigation saying it is time to take the judiciary more seriously. Chervinsky reiterated his fervent optimism at crypto flourishing in the US despite the path ahead being challenging.