Borrowed time

There's so much to say about the way the "trifecta" Democratic government elected in 2020 failed to move on critical matters that could have warded off the coming collapse once they're out of power again. We've been warning about this for a while. The "one job" they had was to pass voting rights protections and the PRO Act. They refused to do either because Joe Biden didn't want anything to fundamentally change. And now it's just a waiting game until the Republicans take back the White House and can undo the temporary rulemaking that's been holding the dam back somewhat. 

For example, watch what happens when President DeSantis gets a hold of the SEC in a few years.  All of this will start to go the opposite way really fast. 

The SEC also proposed a new rule this month that would force institutional investors like pension or hedge funds to use qualified custodians to hold crypto assets, which would make it more costly for them to do so.

This aggressiveness has spread to the rest of the government. In January, a group of banking regulators essentially warned financial institutions against holding crypto assets, citing the risk of fraud. Banks have already begun to pull away from the industry. In addition, the Federal Reserve denied access to the payment system to a crypto bank called Custodia.

It should be said that this crackdown is happening without any new legislation from Congress. The SEC is using existing securities laws to contain the industry and section it off from the rest of the financial system. Discretionary enforcement and regulatory guidance depend on the regulators, and does not have the permanence or force of law. But a law from this set of legislators is unlikely to produce much of value for the public. Provisions like the one proposed by Sen. Elizabeth Warren (D-MA) to force crypto firms to comply more stringently with anti-money laundering laws would be welcome. But the more likely legislative outcome from a Congress littered with recipients of crypto cash would be some definitive de-fanging of the SEC’s efforts to enforce existing law.

Because they refuse to pass new laws and prefer to just shake a finger at the criminals for a few years, we're going to see major unmitigated looting of people's retirement funds. In the interim it's all just borrowed time. 

Busy afternoon

Here go read Matt Taibbi's new article about the SEC's memory hole.

That, it now appears, is exactly how the Securities and Exchange Commission has been treating the Wall Street criminals who cratered the global economy a few years back. For the past two decades, according to a whistle-blower at the SEC who recently came forward to Congress, the agency has been systematically destroying records of its preliminary investigations once they are closed. By whitewashing the files of some of the nation's worst financial criminals, the SEC has kept an entire generation of federal investigators in the dark about past inquiries into insider trading, fraud and market manipulation against companies like Goldman Sachs, Deutsche Bank and AIG. With a few strokes of the keyboard, the evidence gathered during thousands of investigations – "18,000 ... including Madoff," as one high-ranking SEC official put it during a panicked meeting about the destruction – has apparently disappeared forever into the wormhole of history.