There are over 46 million Americans who reported owning Bitcoin in 2021.
If we add in Ethereum and altcoins, the total number of U.S. citizens who own crypto is likely well over 50 million at present.
Of those 50 million Americans, it’s safe to assume that at minimum, 500,000, or 1%, of them actively invest in crypto for a living.
This is likely no different than those who feed their families by investing in stocks.
When one invests professionally, they need access to derivative instruments to manage risk, hedge, and protect their investments.
For some reason, U.S. regulators have decided that derivatives should be illegal for crypto, but of course, not for stocks and commodities.
Due to these punitive laws, U.S. professionals have had no choice but to become virtual offshore refugees in order to earn a living.
It’s a process which involves paying $50,000 or more to register entities in island nations, and doing business with broods of vipers, like kingsnake SBF, rather than regulated and insured counterparties.
And speaking of SBF, do you know the primary reason why he was able to lure in so many depositors to his Ponzi scheme?
What enabled SBF’s fraud the most was his large political donations and his close proximity to key U.S. regulators.
Between SBF and his co-CEO Ryan Salame, over $65 million flowed out of FTX and into the pockets of bipartisan political candidates in 2020 and 2022.
Oddly, they were not required to submit their company’s balance sheet or undergo a basic audit to make these large donations.
Instead, SBF gained access to powerful public servants such as CFTC commissioner Caroline Pham, SEC Chair Gary Gensler, Federal Reserve Chair Jerome Powell, and Maxine Waters, who chairs the House Committee on Financial Services. And there were plenty of others.
This lack of due diligence among regulators allowed SBF to exploit the public’s trust in high offices.
His regular meetings with them gave his operation the appearance of legitimacy and added to the illusion that he was one of the good guys.
Because of this, the assumption within the industry was that if regulators were going to offer citizens no other choice other than to do business offshore, FTX was the safest bet for solvency.
Regulators and the corporate press will use FTX’s fraud as an excuse to say, “See, I told you crypto was risky,” rather than recognizing their own role in the heist.
What’s worse, their crackdowns will do nothing to stop billions of dollars from continuing to flow out of the U.S. financial system and directly into the coffers of the unregulated underworld. Rather, it will only make the crime vacuum larger.
Last year, Binance alone exchanged over $7.7 trillion in trade volume.
If we account for the dozens of other offshore exchanges, this total likely eclipses $10 trillion annually. It’s hard to overstate the amount of jobs and tax revenue that would be generated inside U.S. if regulators allowed this money to flow into U.S. markets.
Source: Jarvis Lab