Fundstrat co-founder Tom Lee is concerned that America might be on the verge of an outright Bitcoin ban, following remarks made by Donald Trump and Steven Mnuchin in recent weeks alongside the possibility that Iran is using the digital currency to skirt U.S. sanctions. Lee took to Twitter to warn that all the attention garnered by Facebook’s potential Libra token, and the associated negative attention on Bitcoin, could lead the notoriously reactive president to render Bitcoin illegal overnight.
Washington and media coverage of Crypto and #bitcoin is turning into ‘too much of a good thing’ because might push @realDonaldTrump towards escalation.
– NEED Brexit, China trade war, Euro banks back in headlines.
– Bitcoin choppy until then. #BTFD#cryptowinter over
— Thomas Lee (@fundstrat) July 18, 2019
Could ultimately lead to an executive order
— Thomas Lee (@fundstrat) July 18, 2019
BitMEX Feels the Regulatory Bite
Steven Mnuchin recently doubled down on his criticism of the negative impact of cryptocurrencies, stating that he didn’t want Bitcoin to become the next “Swiss numbered bank accounts”, referring to the anonymity provided by Swiss banks prior to recent regulations. To avoid this, he said, the U.S. would seek to impart “very, very strong regulations” on Bitcoin users and intermediaries. Evidence of this came Friday when rumors surfaced that Seychelles-based entity BitMEX was under investigation from the CFTC for providing platform access to U.S. individuals, who are banned from using the service. This follows the debate between Nouriel Roubini and Arthur Hayes two weeks ago, during which Roubini made a number of accusations against the BitMEX model and Hayes personally, and it seems that his allegations may have had an impact.
Iran Factor
What is also concerning Lee in terms of Bitcoin’s status is its ties to Iran at a time of escalating tensions between the two nations. Cryptocurrency mining has taken off in the country, boosted by subsidized energy costs, in response to U.S. sanctions. Should Iran start using Bitcoin as an accepted form of currency it could render many aspects of U.S. sanctions ineffective. This would be an embarrassment for the Trump administration and, as Lee fears, force the president’s hand into taking action on the cryptocurrency. However, this seems a far away proposition given that the country’s top clerics are still debating whether Bitcoin is ‘haram’ (acceptable under Islam), which would have a massive impact on its viability.
