POLITICO's Colin Wilhelm Reveals How Lobbyists Cash In On Bitcoin & Crypto Craze

Colin Wilhelm: Lobbyists Cash In On Bitcoin

Colin Wilhem, who covers Congress for POLITICO, was talking at the Politico Money podcast about Bitcoin and cryptocurrencies on June the 6th.

At the beginning of the conversation he explained why Bitcoin lost more than half of its value since the beginning of the year. According to him, the ‘sadness’ of the crypto market is related to several factors including the situation in China and South Korea.

Both countries have very important crypto communities and the strict measures imposed by both governments reduced the influence that these two actors had in the global market. Indeed, China banned Initial Coin Offerings (ICOs) back in 2017 and South Korea followed it just some time later. The main difference is that China completely banned crypto trading activities, while South Korea allowed them to take place but in a very restrictive environment.

Compared to Japan or other countries in the region these have been very bearish decisions that influenced the markets.

Another important reason that Mr. Wilhelm talks about and mention is the regulatory uncertainty in the United States, and all around the world. Regulatory agencies are trying to define whether bitcoin and cryptocurrencies are securities, commodities or currencies.

At the same time, Wilhelm explains that there are some lobbyist that are making money with virtual currencies, even when the market is in bearish. There are different associations that are starting to engage with representatives from different regulatory agencies.

Moreover, there are also traditional financial institutions that are trying to push for stronger regulations in the crypto market. Cryptocurrencies have been posing several threats to banks and other financial companies. These new digital assets offer better services at a reduced price.

Would SEC Define Bitcoin, Ethereum And ICOs As Securities?

Mr. Wilhelm explains that Bitcoin is not the main problem. Ethereum (ETH), Ripple (XRP) and tokens created during ICOs are in trouble here.

Wilhelm commented about it:

“Bitcoin does not have a central authority, it was created by an anonymous programmer, it wouldn’t really fit under the classification of a security that’s been issued by a third party as a way of basically making money.”

ICOs are rising millions of dollars and are selling tokens that would later work in the platforms these companies develop.

If the SEC decides to define Ethereum and Ripple as securities, that would be catastrophic, according to Wilhelm. He said that an important CEO of a crypto exchange commented about it during the last Consensus conference in New York.

This would affect a multi billion dollars industry (ICO) and would really have potentially disastrous effects on the price of these coins.

At the moment of writing this article, 25% of the total market share is related to Initial Coin Offering tokens and similar smaller cryptocurrencies.

Marshall Islands And Lobbyists

Marshall Islands are an independent nation that was part of the US and adopted a national digital currency. They are doing that so as to attract more investors, but it is not clear how they are going to capture more interested individuals. The currency is known as SOV and it will be used in the future for paying taxes and buying groceries.

So lobbyist at the Marshall Islands are trying to engage with regulatory authorities to comply with the current rules (including anti money laundering) and also to be able to freely sell it in the US market.

But lobbyist are working with national security entities about this cryptocurrency, which is quite surprising. The main issue is related to AML activities. Some cryptocurrencies, including Monero (XMR) cannot be traced, and authorities are worried about how to track them.

What About the Future?

At the end of the podcast, Wilhelm commented that there will be less fraud in the market. The SEC created a division that is working trying to control Initial Coin Offerings that are operating right now.

Moreover, there are enforcement actions all the time against ICOs, but the most important players haven’t been yet affected. Furthermore, for Wilhelm, the SEC will be bringing more certainty to the market by implementing new regulation regarding ICOs later this year.

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