It’s coming - rules and more than a mountain of them.
They won’t stop until they get their cut.
Blame the industry for attracting the ire of the all-mighty rule makers.
This means that growth in this growth industry won’t be as gangbusters moving forward if ever.
It’s a net negative for crypto because they rely on that extra supercharger growth to attract the incremental investors and all in one poof, gone, like the wind.
What exactly happened?
The Financial Stability Oversight Council (FSOC), a U.S. regulatory panel comprising top financial regulators recommended that Congress pass legislation addressing risks digital assets pose to the financial system, including bills to bolster oversight of crypto spot markets and stablecoins.
Anything that Congress touches usually turns to higher costs and more red tape.
FSOC's report follows a slate of others that were released last month in connection with the White House's executive order. In September, the Biden administration published a series of reports recommending that U.S. government agencies double down on digital asset sector enforcement and identify holes in regulation.
It remains unclear when Congress might pass crypto-related legislation, although several bills have been introduced to address stablecoins and digital commodities regulation.
The FSOC report also suggested Congress pass a bill to provide rulemaking authority to federal financial regulators over the spot market for cryptocurrencies that are not securities, in order to address conflicts of interest and abusive trading practices.
It’s not a joke that regulation is racing to the front and center of the crypto narrative as the biggest risk to the industry.
It’s been quite relentless at this point.
As soon as we think the worst has passed, we are dropped with another trust-toppling scandal that will most likely induce further regulation after the debilitating Congress ruling.
This time it’s mediocre reality TV star and influencer – Kim Kardashian.
She’s the Hollywood socialite that pushed Ethereum Max which is a digital coin that aptly borrowed its name from the second biggest crypto Ethereum.
What have been the results?
Ethereum max is down a stunning 98% prompting investors to sue Kardashian who never disclaimed that her marketing was being paid by the company that owns the token.
Kardashian has filed motions to dismiss the suit, with her lawyers arguing that there's insufficient evidence their endorsements led to the plaintiffs buying EMAX.
She paid a fine of $1.25 million.
EMAX's value is based on the greater fools theory because it has no utility whatsoever.
As investors and promoters like Kardashian talked up this coin, more people invest and the price goes up allowing the investors at the beginning to cash out.
Kardashian was paid $250,000 by Ethereum Max for her marketing efforts.
Altcoins like EMAX lack the stability of older types of cryptocurrencies, like bitcoin and ether.
And EMAX has never reached meteoric highs like bitcoin so the greater fools theory in this coin only reaches so high for the previous investors to cash out.
EMAX is vastly riskier because investing in it can quickly turn into pouring money down a black hole with the asset depreciating rapidly.
While it's unclear how many people invested based off the celebrity endorsements, data found Kardashian's advertisement reached about one in five US adults and roughly 30% of crypto owners.
This is yet another public relations disaster for the crypto industry.
It’s bad enough the industry has impoverished most of its participants, but now it’s really involving the lowest level of brain activity on the human planet.
One might conclude that this Kardashian fiasco might be the bottom because how lower and pitiful can crypto get?
The one silver lining in the reason for crypto not crashing is because the big holders haven’t sold out yet which bodes well for crypto when capital markets start to loosen up.
That appears to be the last leg crypto is standing on which could be either scary or a sanctuary depending how you look at it.
Lastly, steer away from anything other than Bitcoin if you are going to invest.
