The SEC has given crypto a bright green light, and that's bad

A facile, fraught, and above all just plain stupid decision.

Over the past several decades, there have been rapid and fundamental changes in the finance and banking sectors. The banking reforms of the New Deal, which endured up until about 1980 and provided a relative degree of banking and financial stability, were reversed by the neoliberal counterrevolution with an eye toward increasing profits and shredding social responsibility. A new book by world-renowned progressive economist Gerald Epstein, Busting the Bankers’ Club: Finance for the Rest of Us, shows us the result: a financial system dominated by megabanks and shadow financial institutions prone to instability and crises that at the same time rely on government bailouts.

The neoliberal financial system, controlled by what Epstein calls “The Bankers’ Club,” benefits exclusively powerful people and institutions, is linked to the growing inequality of wealth and income, and is a net drain to the U.S. economy. Nonetheless, bankers not only see themselves as “essential workers,” a view that Epstein shreds into pieces, but as former Goldman Sachs Chief Executive Lloyd Blankfein claimed, many think they do “God’s work.”

The latest development in the evolution of the modern financial system is the Securities and Exchange Commission’s approval of bitcoin exchange-traded funds last month, concluding a decade-long fight and marking a turning point for cryptocurrency. This may be a game changer for the global money system but could also very well lead us to another financial crisis. - Truthout

The SEC may save crypto

Which they absolutely should not do.

The Securities and Exchange Commission, which has done a decent job of protecting the public from cryptocurrency scams, is on the verge of making a disastrous decision to allow financial companies to offer the equivalent of exchange-traded funds comprised of Bitcoins.

The sponsors include BlackRock, Fidelity, and 11 other firms.

In anticipation of a favorable SEC ruling, the price of Bitcoin, which had languished around $25,000 as recently as last September, has been bid up to over $45,000. The financial press has reported that BlackRock alone has at least $2 billion lined up for this play and that the first-quarter trading volume could be $40 billion. With crypto mercifully dying of its own weight, the SEC could throw it a lifeline.

SEC Chair Gary Gensler, who once taught a course on crypto at MIT, has long warned that creations like Bitcoin, backed by nothing other than speculative expectations of investors, are dubious investments lacking the safeguards that the securities laws impose on stocks and bonds. Exchange-traded funds made up of Bitcoins operate at one further remove from scrutiny. The main beneficiaries are the financial companies that propose to offer them. - The American Prospect