Dollars burning

Will The US Kill Crypto?

By Cryptofab | Cointune | 13 Feb 2023

Last week Kraken, this week Binance USD (BUSD)... The US SEC continues its coordinated attack against cryptos. 

Can they win?

They can make things complicated through centralized exchanges. That's why they attacked first of all Kraken and Paxos/Binance through the BUSD. Attacking DeFi takes more time. However, they can ask the DeFi protocols located in the US to prevent US citizens from using them, or impose KYC.

How to react?

Decentralization is key, as usual. Bitcoin (BTC) remains censorship-resistant when it is held out of the centralized exchanges, on a self-custody wallet. Ethereum (ETH) needs to be more decentralized than it is now. It is worth noting that Binance Coin (BNB) dumped after the latest events, whereas DeFi tokens such as Aave or CVX started to pump. Some money is moving from centralized exchanges to decentralized ones. GMX app was also ponctually yesterday the protocol generating the highest fees. In order to mitigate the risks, it might be worth using several blockchains, as decentralized as possible, for instance Avalanche (AVAX) additionally to Ethereum. Some Ethereum L2s such as Arbitrum or Optimism can also be used, but there is a risk.

What's next?

As the SEC said BUSD is a security, they could do the same with USDC or USDT... However, the good news is that they gave some time to BUSD holders to get rid of it, until February 2024. There is no reason to think that they will not do the same with other stablecoins if they take similar decisions...

Disclaimer: this article does not contain any financial advice. The information is provided for general informational and educational purposes only.

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