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Recent Fraud in Crypto Currency
One of such recent and major cryptocurrency fraud cases is a wide international operation called Operation Token Mirrors. U.S. authorities led this sting operation to expose how multiple cryptocurrency market makers, including Gotbit, CLS Global and ZM Quant were committing wash trading and market manipulation.
For cryptocurrency wash, trading involves dummy accounts buying and selling fake vendors to enhance market activity and show inflated value. According to these firms, they provided these services to serve as the actors involved in pumping and dumping cryptocurrencies, duping investors, and generating illegal profits.
The FBI, the SEC, and a group of international law enforcement agencies joined forces with the U.S. Department of Justice to brief about and arrest many individuals and entities involved, including Aleksei Andriunin, Gotbit’s CEO, and Liu Zhou, CEO of MyTrade MM, who is said to have marketed his services as superior to competitors offering continuous trading activity to push token prices. Several cryptocurrencies like the Robo Inu and Saitama were on the scheme list.
Government influence on cryptocurrency
As they push illegal activities like money laundering or terrorism funding, governments are regulating cryptocurrencies more and more.
They are creating frameworks such as the European Union’s Markets in Crypto-Assets Regulation (MiCA) to standardize regulation such as the one across the all-member states. It’s also occurring at the same time as the acceleration of U.S. Securities and Exchange Commission (SEC) enforcement actions against both U.S. exchanges like Binance and Coinbase.
In many of today’s political debates there is one main question circulating: Should crypto assets be regarded as securities, commodities, or some distinct new asset type? In part, it could legitimize the sector, but overregulation could kill it.
Influence of current U.S elections on cryptocurrency
Donald Trump’s stance on cryptocurrency
As part of his 2024 presidential campaign, Donald Trump has made a sharp about-face regarding cryptocurrencies. Now actively promoting it, Trump is his own ‘crypto president’ at a fundraiser. Unlike the more regulatory Democratic attitude, his campaign focuses on supporting the cryptocurrency industry.
Trump has also put his support public and recently has begun a cryptocurrency project called World Liberty Financial (WLFI). It includes a governance token with a $1.5 billion planned valuation.
As WLFI integrates with Decentralized Finance (DeFi) Platforms, they look for partnerships such as Aave. It also looks to attract accredited US investors and sit within the emerging blockchain ecosystem.
Some see Trump’s newfound support for digital currencies as a means for luring younger voters and tech-savvy investors to his party.
But, it has also been criticized because of potential conflicts of interest arising with the token launch coming by election day and the involvement of Trump’s family members who may be lacking any sort of financial acumen.
Kamala Harris’s stance on cryptocurrency
The current Biden administration is taking a somewhat more cautious approach to cryptocurrency, compared to Kamala Harris’s signal of relative support for the nascent technology.
During her 2024 campaign, she announced a crypto regulatory plan that came as part of her “Opportunity Agenda for Black Men,” pointing to the need to protect investors, particularly as the crypto market attracts a significant share of Black Americans (over 20% ownership). This framework focuses on integrating the provision of consumer protection with that of creative innovation in digital finance.
Harris’s plan for crypto is to create a safer environment so investors can engage safely, as it fits with Harris’ more general use of technology to expand financial inclusion.
Her outreach has inspired some optimism from the crypto community but has also raised doubts; some critics are skeptical about the message’s narrow scope, and they quibble with the campaign over trying to grab a specific voter demographic.
As a whole, it seems as though Harris’ policy could indicate that the current administration may be more open to crypto-friendly regulations than the past administrations and appeal to communities that have a very large investment in the space.
Businessmen influence on cryptocurrency
Elon Musk on cryptocurrency
Playfully tweeting about cryptocurrencies, especially Dogecoin, Elon Musk has long been a participant in these kinds of conversations.
For instance, when Donald Trump was running for President in 2024, Musk publicly supported cryptocurrency, and cryptocurrencies as a requirement for ‘individual freedom’ and for decentralized technology.
Dogecoin was already gaining steam with its recent surge, but recently trading volume spiked after Musk tweeted ‘DOGE will fix it’ in response to a bureaucratic issue he jokingly linked to the crypto meme coin.
Additionally, Musk has stated that, if Donald Trump is elected in the upcoming election, Musk may find himself leading a Department of Government Efficiency (DOGE).
Musk has panned Bitcoin for its environmental impact and preferred Dogecoin for payments when Tesla accepted Bitcoin and Dogecoin for transactions. Recently, Tesla has moved a large amount of Bitcoin to unnamed wallets speculating on what’s in store for their crypto strategy in the future.
Mark Zuckerberg on cryptocurrency
Meta is heading towards embracing all the blockchain technologies, starting from how cryptocurrencies can improve the ecosystem of the metaverse.
Meta’s earlier foray into the world of cryptocurrency, Diem (formerly Libra) didn’t materialize in a novel cryptocurrency due to regulation, but it brings DeFi elements integrated into its metaverse platforms.
Currently, Meta’s emphasis is focused on aiding virtual commerce and blockchain-backed assets.
Zuckerberg believes that crypto will be important in the ability to more seamlessly exchange virtual goods and services within Meta’s metaverse products.
Although his focus is still heavily centered around metaverse innovations as opposed to purely financial crypto projects, he remains just as excited about those new developments.