How the Feds Could Regulate Crypto (and Why All Is Not Lost for Investors)

Each day seems to carry with it a new, ominous headline propounding the imminentdemise of cryptocurrency．的death of Bitcoin has been predictedmore than 450 timesas of this writing. And yet, it seems to have staying power:more than $23 billionof Bitcoin has changed hands in the last 24 hours. Seasoned crypto investors — and their detractors — have weathered ups and downs, and there are doubtlessly more to come. But with each crash (and subsequent boom), the war drum of federal regulation increases in fervor and proximity.

In November, following the well-publicizedcollapse of FTX, Treasury Secretary Janet Yellenchastised the crypto worldin a threat that sent markets in a steep plunge: "The recent failure of a major cryptocurrency exchange and the unfortunate impact that has resulted for holders and investors of crypto assets demonstrate the need for more effective oversight of cryptocurrency markets." The specific areas of concern she identified included "comingling of customer assets, lack of transparency and conflicts of interest," which she claimed "was at the center of the crypto market stresses observed over the past week."