On May 8, Charles Hoskinson, IOG Co-Founder and CEO, discussed his concerns regarding the Biden administration’s approach to cryptocurrency regulation in a YouTube video titled “Biden and Crypto.” Hoskinson highlighted several key issues facing the American cryptocurrency industry, particularly in the context of regulatory practices and potential legislative actions:

  1. Regulation by Enforcement:
    • Hoskinson criticized the current U.S. administration for its practice of “regulation by enforcement” rather than through clear, established laws. This approach, according to him, has resulted in significant job losses and the migration of crypto businesses out of the U.S. He cited the example of Ethereum’s foundation in Switzerland and the subsequent establishment of over 1,290 businesses there, contributing to a market value of over $380 billion. He argued that many of these firms might have been based in the U.S. if the regulatory environment were more favorable.
  2. Biden’s Veto Threat:
    • The administration recently indicated that President Biden would veto legislation allowing highly regulated financial firms to custody Bitcoin and other cryptocurrencies. This statement was part of a broader critique of a resolution (H.J.Res.109) that Hoskinson sees as an attempt by the legislative branch to create more accommodating regulations for the crypto industry. The administration argues that the resolution would disrupt the Securities Exchange Commission’s (SEC) efforts to protect investors.
  3. Historical Inadequacy of Regulations:
    • Hoskinson drew a parallel between the current regulatory scenario and historical instances where new laws were necessary to address emerging technologies. He criticized the administration for relying on the Securities Exchange Act of 1933 to regulate modern digital assets, which he believes are too complex and varied to be governed effectively under old laws. He mentioned that cryptocurrencies could simultaneously act as commodities, securities, currencies, loyalty points, and non-fungible tokens (NFTs), which complicates the regulatory framework.
  4. Implications for the Future of U.S. Crypto Industry:
    • In his concluding remarks, Hoskinson issued a stark warning regarding the November elections, suggesting that a vote for Biden could be detrimental to the future of the American cryptocurrency industry. He accused the administration of intending to “destroy” the sector through restrictive policies and inconsistent enforcement.