The Crypto Crackdown Has Just Begun

There was a lot gaiety online when the US Department of Justice announced the Stop from the founder of crypto exchange Bitzlato last week. Unpronounceable, unknown, and unlike all the much bigger fish (like Binance) that make headlines, Bitzlato looked like a little fry, a nothing. The fact that Bitcoin resumed its march above $21,000 seemed to confirm this.

But that ignores the big picture. In the first weeks of 2023, the watchdogs have done a lot. On January 3, a joint statement by US banking regulators warned the industry of crypto risks seeping into the banking system. Then came $100 million regulation with Coinbase Global Inc. on weak internal controls, a court case against the Winklevoss twins’ Gemini and the broker Genesis for allegedly selling unregistered securities, and a sum of $45 million regulation with the Nexo lending platform (which ceased operations in the United States). Subpoenas are flying.


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