Today, in place of my regular column of Economics and Investing news items, I’m concentrating on what I foresee as the nascent crackdown on private cryptocurrency holders.
To start, please take a few minutes to read these two articles, and pay particular attention to their tone:
Binance.US suspends USD deposits after regulators crackdown.
and,
SEC’s Gensler Likens Crypto to ‘Fraudsters, Scam Artists, Ponzi Schemes’ of 1920s.
My Previous Warnings
My warnings about private crypto holdings have been consistent. Back in May of 2012, I wrote:
“Anyone with perspicacity is surely moving their crypto holding out of exchanges and into hardware wallets. That is simply common sense. Both regulation and taxation are looming. And undoubtedly it is at the exchanges where governments will crack down, first.”
Just as I warned readers 11 years ago, a major crackdown on private crypto coins/tokens has begun. The first target of legislators and Executive Branch authorities is indeed the crypto exchange firms.
In 2017, I offered some advice, in an article titled Preparing For The Cashless Transition. In that piece, I opined:
“Whether it takes five years or just a year, the end of cash—or at least cash as we know it–is coming. The transition from the convenience of electronic commerce to the requirement for electronic commerce will be a Sea Change event. For those of us who live in remote areas beyond cell phone coverage, this change will be a troublesome hindrance. Other than writing checks, how will we be able to buy and sell things, especially with other private parties?
But for all Americans, going cashless will remove the last bastion of our privacy. Paying in cash provides anonymity for purchases. Adopting electronic-only currency will be a big change. Every transaction will be positively tallied and tracked for both the seller and the buyer.
Ominously, the push for going digital is coming just as hacking and identity theft is reaching pandemic proportions. The prospect of being forced to put your liquid net worth into digital bucks and then seeing them wiped out is quite frightening.”
And in January of 2018, I warned:
Cryptocurrencies in 2018 and Beyond:
I’ve had several folks ask me about what will happen with Bitcoin and the other crypto currencies in 2018 and beyond. In summary, I’d say that 2017 will go down in history as the first year of the Crypto Craze. And I also predict that 2018 will be remembered as the first year of Crypto Control. It will be the national governments that will attempt to do the controlling. Although governments and their taxing minions can do little to stop peer-to-peer cryptocurrency transactions, they can and will crack down on the crypto exchange companies located in various countries. They are also likely to slap huge new tax penalties on anyone caught transacting “reportable events” in the crypto currency world without the requisite reporting. Don’t be surprised if the IRS soon gets into the e-mail and…