Regulation by hostility: the real legacy of Biden-era crypto policy
Thorn argues that a recent New York Times op-ed rewrites history through omission, glossing over the collateral damage caused by the previous administration.
The administration’s strategy of regulation-by-enforcement, rather than establishing clear rules, had a perverse effect: legitimate, compliance-minded companies were driven offshore or out of business, consumers were harmed, and American innovation was stifled. Meanwhile, bad actors like Bankman-Fried (who knew how to play political games) thrived in the confusion. When you refuse to write clear rules, the only people who benefit are those who never intended to follow them.
The authors conveniently ignore one of the most troubling episodes of the Biden era: “Operation Choke Point 2.0.” Under pressure from federal regulators, banks systematically debanked lawful crypto businesses, cutting them off from the financial system without due process, formal rulemaking, or legislative authority. The debanking campaign swept up ordinary individuals and small businesses who had turned to crypto because the traditional banking system had long underserved them. The Biden administration’s approach cut consumers off from tools they were using to participate in the financial system, without putting a single policy through the democratic process of notice-and-comment rulemaking.
The authors dismiss crypto as a “painfully slow and expensive database” with “almost no practical use.” They acknowledge in passing that crypto is used to wire money
internationally, but wave this away as though enabling fast, low-cost cross-border remittances for millions of people is a trivial achievement.
It is not. Global remittance fees average nearly 6.5%, costing migrant workers and their families billions of dollars each year. Stablecoins running on blockchain networks can execute the same transfers in minutes for a fraction of the cost. This is an immediate, material financial improvement for families in developing countries. The Biden economists sat in “dozens of meetings” and apparently came away unimpressed. One wonders whether they spoke to any of the people these tools serve.
Beyond remittances, blockchain technology underpins a rapidly growing ecosystem of financial applications. Fidelity, JPMorgan, BlackRock, BNY Mellon, Morgan Stanley, Visa, Mastercard, Meta, Stripe, Block Inc. and Franklin Templeton are actively building on blockchain infrastructure. The Biden economists’ claim that no “giant tech firms” are using this technology is flatly wrong.
