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Cryptocurrency
It is imperative that our traditional $100 trillion capital markets don’t get entangled with the cryptocurrency markets. Traditional finance money moving into this highly decentralized market vastly increases the risk that the volatility and unpredictability of the crypto market could poison the entire global financial ecosystem.
This includes stablecoins, or coins that back digital currency with short-term U.S. Treasuries, dollar deposits, or other cash equivalents. Although The Genius Act – a law passed by the U.S. Congress and signed by President Trump in July 2025 – requires issuers to hold $1 of liquid assets for every $1 stablecoin they distribute (this is sometimes referred to as 1:1 backing), taxpayer dollars are still going to be guaranteeing something that exists at least partially outside the traditional financing system.
This is a huge risk given that Treasury Secretary Scott Bessent believes stablecoin issuers could eventually hold $2 trillion or more of U.S. Treasury securities. Not to mention the auditing and oversight of this would be, at best, a nightmare and, at worst, virtually impossible.
Without question, this would bring financial instability that would end in catastrophe. We must look no further than the Free Banking Era of the mid-1830s, when multiple banks had bank notes trading at multiple prices in multiple states that had multiple regulatory systems – resulting in no one knowing what the dollar was actually worth. We must never forget: A stable, efficient financial system relies on the singleness of money, where everyone involved is confident that all forms of a currency are interchangeable at the same value.
Another reason the United States government cannot be in the cryptocurrency business is that crypto is used heavily in things like sex trafficking, money laundering, ransomware, and scams in general. The Wall Street Journal reported that Tether, the world’s most traded cryptocurrency, has been a “vital financing tool for several of the U.S.’s top national-security concerns. These include the North Korean nuclear-weapons program, Mexican drug cartels, Russian arms companies, Middle Eastern terrorist groups, and Chinese manufacturers of chemicals used to make fentanyl.”
The WSJ also reports that “despite its place on the U.S. blacklist, which restricts transactions with sanctioned entities, Garantex < a Moscow-based crypto exchange > has become a major channel through which Russians move funds into and out of the country… it has also been a vehicle for Russian cybercriminals to launder their earnings. Garantex’s growing role as a global conduit for illicit funds was underscored by evidence that Palestinian militants in part financed their operations through crypto in the lead-up to the Oct. 7 attacks in Israel. Digital wallets controlled by Palestinian Islamic Jihad, which joined Hamas in the attacks, received a portion of $93 million via Garantex, according to analysis by researcher Elliptic, which said Hamas also used a similar financing strategy.”
The Coin Laundry, an International Consortium of Investigative Journalists (ICIJ)-led cross-border investigation with 37 media partners in 35 countries uncovered how “companies provide the tools that criminals exploit to launder the proceeds of scams, theft, and other crimes – while those who’ve lost their savings or livelihoods are left with little hope of justice.” Their findings “raise questions about whether exchanges are doing enough to stop illicit flows, either by freezing funds, closing accounts or carefully monitoring suspicious transactions.”
Among many other things, the investigation found that “two of the world’s largest cryptocurrency exchanges < Binance and OKX > moved hundreds of millions of dollars worth of funds tied to illicit actors after pleading guilty to crimes relating to money laundering.”
In October 2025, President Trump pardoned Changpeng Zhao – the Binance cryptocurrency exchange founder and crypto’s richest man – who was convicted by the U.S. Department of Justice for violating U.S. laws by allowing sanctioned entities and criminals to use the exchange.
Accusing Binance – the world’s largest crypto exchange – of being a massive money-laundering operation that laundered billions of dollars in illicit funds, the Justice Department imposed a record $4.3 billion fine and strict oversight on the company. The company pleaded guilty in 2023 to violating U.S. anti-money-laundering requirements and was barred from operating in the United States.
Zhao was pardoned after Binance participated in a deal with the Trump’s World Liberty Financial that significantly increased the value of the company’s stablecoin and helped elevate their crypto business. Months before the pardon, The Wall Street Journal reported that the “Trump family had been in talks to acquire a stake in Binance” and that the “Binance founder Changpeng Zhao, who served four months in prison after pleading guilty to a related charge, was seeking a pardon from the Trump administration to facilitate Binance’s return to the U.S. market… The talks began after Binance reached out to Trump allies, offering a business deal as part of a plan to return the exiled company to the U.S.”
Read more about the conflicts-of-interest, corruption, and legal landmines involved here.
Even President Trump sensed this pardon was not going to be a popular move. In a November 2025 interview on 60 Minutes, when asked about Zhao’s pardon, the president said, “I don’t know who he is. I know he got a four-month sentence or something like that. And I heard it was a Biden witch hunt.”
But the allegations against Changpeng Zhao were far from a Biden witch hunt. A November 2025 analysis by the International Consortium of Investigative Journalists found that “between the guilty pleas and Zhao’s pardon, Binance continued to profit from hundreds of millions of dollars in cryptocurrency transactions linked to some of the world’s most notorious organized crime groups.”
“While the company was under the supervision of court-appointed monitors, at least $408 million worth of digital currency flowed to Binance accounts from Huione Group, a Cambodia-based financial firm used by Chinese crime gangs to launder proceeds from human trafficking and industrial-scale scam operations.”
In May 2026, The Wall Street Journal published a report revealing that, in addition to the U.S. Justice Department investigating Iran’s use of Binance to evade sanctions, billions in crypto transactions have flowed through Binance to networks financing Iran’s regime until as recently as that month: “Billions in crypto transactions have flowed through Binance to networks financing Iran’s Islamic Revolutionary Guard Corps (IRGC) in the two years preceding the current U.S.-Iran war, according to Binance compliance reports, blockchain data, foreign law-enforcement officials who track terrorism financing and other crypto researchers and nonpublic documents… The vast sums show how Binance has been used as a financial artery for the IRGC, the powerful political, military and economic force that dominates Iran.”
It’s also important to remember that the Iranian force also supports proxy armies throughout the Middle East, including terrorist-designated groups Hamas, Hezbollah and Yemen’s Houthi militants.
The WSJ continues: “Iran’s central bank moved $107 million in crypto through a series of transactions into Binance accounts last year, according to an analysis by a blockchain data firm…. Data compiled by a foreign law-enforcement agency recorded about $260 million in direct transactions during 2024 and 2025 between accounts on Binance and digital wallets associated with Iranian terrorist financiers and sanctioned Iranian entities. In addition, Binance investigators flagged that a digital wallet held by an unknown user outside Binance received money through the exchange and sent $218 million to an Iranian-state financing network in 2023, a transfer confirmed by blockchain data.”
“These funds are on top of the roughly $1.7 billion that Binance investigators concluded moved through Binance to that same Iranian network, as previously reported by The Wall Street Journal in February. The Binance compliance reports said the Iranian actors moved funds using sophisticated techniques in an effort to evade detection.”
“The funds moving through Binance to Iran-linked groups largely corresponded to payments from Chinese buyers of Iranian oil, part of a sanctions-busting trade that is controlled by the IRGC and that is a significant revenue source for the regime, according to foreign law-enforcement officials, Binance compliance reports and the nonpublic documents.”
Yet another reason the United States cannot be in the crypto business is its vulnerability to hacking, ransomware and straight-up theft.
In the United States, the FBI estimates that, in 2024, Americans lost $9.3 billion to cryptocurrency crimes, a 67 percent increase from the year before. In 2025, Americans lost roughly $11.366 billion to crypto-related crimes, representing a 22 percent increase in losses compared to 2024.
In 2025, after examining tens of thousands of cryptocurrency transactions, the International Consortium of Investigative Journalists found that at least $28 billion tied to hackers, thieves and extortionists has flowed into crypto exchanges over the last two years. Time after time, groups tied to illicit activity moved money onto the world’s largest exchanges, where they can convert U.S. dollars or euros into Bitcoin, Ether and other digital coins.
A great example of crypto theft came on February 21, 2025, when a ring of North Korean hackers named Lazarus hacked Bybit, the world’s second largest crypto exchange, to the tune of $1.5 billion – the largest theft in crypto history (note: groups out of North Korea have stolen over $6 billion in cryptocurrency since 2016).
WALL STREET
Mainstream financial players are becoming increasingly engaged in the crypto market. In fact, where Wall Street titans once saw disaster, they now see easy money (sound familiar?).
While Ray Dalio, the founder of Bridgewater, was once skeptical of bitcoin, he later called it “one hell of an invention.” In October 2017, Larry Fink of BlackRock referred to bitcoin as an “index of money laundering.” However, by July 2024, he saw it as a “legitimate financial instrument that allows you to have maybe uncorrelated, non-correlated type of returns.”
It’s no great mystery why Mr. Fink changed his tune. The Economist reports that “BlackRock’s bitcoin exchange-traded fund has grown to become the fourth-largest ETF in the hedge-fund world, with a long position worth $3.8 billion. A survey by PricewaterhouseCoopers (PwC) and the Alternative Investment Management Association suggests that 47 percent of traditional hedge funds now invest in digital assets, up from 21 percent in 2021.”
JPMorgan Chase CEO Jamie Dimon once said of crypto, “I applaud your ability to want to buy or sell it, just like I think you have the right to smoke. But I don’t think you should smoke.” He also said that bitcoin is “worse than tulip bulbs” and claimed he would fire anyone at JPMorgan who traded it for being “stupid.” At one point he even said, “I think all that’s been a waste of time and why you guys waste any breath on it is totally beyond me. Bitcoin itself is a hyped-up fraud. It’s a pet rock.” Dimon doubled down in December 2023, telling the Senate Banking Committee, “If I was the government, I’d close it down. I’ve always been deeply opposed to crypto, bitcoin, et cetera. You pointed out the true use case for it is criminals, drug traffickers, anti-money laundering, tax avoidance, and that is a use case because it is somewhat anonymous.”
But then he started backtracking, trying to draw a distinction between bitcoin and blockchain technology. “(Blockchain) is different,” he clarified. “Blockchain is a technology ledger system that we use to move information. We’ve used it to do overnight repo, intraday repo, we’ve used it to move money, right? So that’s a technology ledger that we think will be deployable.” Of course, he likely cleared that up because JPMorgan now has its very own cryptocurrency called JPM Coin. Their $4 trillion asset-management arm is also launching My OnChain Net Yield Fund (MONY), a tokenized money-market fund on the Ethereum blockchain. This allows investors to hold digital tokens that represent their ownership in the fund, making it easier for assets like stocks to be moved and traded.
Some might say having storied financial institutions involved gives the crypto market more legitimacy, but it only makes our trepidation much worse. While the JPMorgans and BlackRocks of the world do indeed give legitimacy and credibility to trading cryptocurrencies, at the end of the day, it’s still just a speculative bet. Plus, history tells us that, now that Wall Street is engaged, they will push the envelope big time.
Already, as Jamie Dimon pointed out, there is renewed excitement about “tokenization,” or the process of putting real-world assets on a programmable blockchain in the name of “capital efficiency” (you can think of this as a type of digital ledger). The problem is that, while tokenization makes it faster and easier for money to move around, it also potentially moves it further out of the sight of any sort of regulation.
….and just like in the days leading to the 2007-2009 Financial Crisis, most Americans don’t fully understand the risks involved here.
A report released in November 2024 by the Office of Financial Research, a government think tank, warned that “over the 2020 to 2024 period, low-income consumers have significantly increased their debt usage and debt balances. That increase has been particularly large in areas with higher crypto exposure. The magnitude of debt increases has been especially large for mortgage debt. Low-income consumers in high-crypto exposure areas are disproportionately more likely to take out a mortgage, and the average mortgage size is large relative to pre-2020 average income… our results suggest that consumers’ debt and consumption are correlated with their crypto exposure.” In truth, most people would be better off just going to Vegas (not to mention it’s a heck of a lot more fun!).