Deaton’s latest comments coincide with calls for clearer crypto regulation from people like CryptoQuant CEO Ki Young Ju, who is advocating for "smart regulation" to build trust in the industry. Meanwhile, European regulators are preparing for the implementation of the Markets in Crypto-Assets Regulation (MiCA), which is aimed at curbing crypto market manipulation. However, there are still concerns about the threats posed by pump-and-dump schemes before the regulation takes effect in December. There are also some concerns that regulatory changes in both Europe and the UK may drive firms and investors to more crypto-friendly regions like Switzerland and the Middle-East.
John Deaton Criticizes Federal CBDC
John Deaton recently officially announced his candidacy for the United States Senate seat in Massachusetts. In a recent interview with Generation Infinity, Deaton made his stance very clear on several critical issues, specifically his opposition to a Federal Reserve-issued central bank digital currency (CBDC).
Deaton is concerned that a CBDC could grant the government excessive control over individual spending habits, and could potentially replace cash and monitor how citizens use their money. He also pointed out that Senator Elizabeth Warren’s support for a CBDC might limit the use of cryptocurrencies like Bitcoin (BTC) in the US. He also believes a Federal issued CBDC could actually be a backdoor effort to ban self-custody of crypto assets.
In addition to his stance on CBDCs, Deaton also talked about the importance of government accountability and the need for regulatory clarity in the crypto industry. He criticized the revolving door between regulatory agencies and the private sector, and argued that former regulators should not be allowed to quickly transition to private sector roles after leaving public office. Deaton voiced his support for term limits as well, and suggested that the current lack of fresh ideas in Washington is due to long-term incumbency.
On the issue of crypto regulation, Deaton was very clear about the need for a more straightforward and transparent approach from agencies like the US Securities and Exchange Commission (SEC). He shared that during his legal battle with the SEC on behalf of XRP holders, his main request was for the commission to clarify that XRP itself was not a security.
According to Deaton, the regulatory uncertainty in the US has driven some innovators to avoid the American market, and it is pushing them to focus on international opportunities instead.
Ki Young Ju Calls for Smart Crypto Regulation
Deaton was not the only crypto supporter that called for clearer regulations over the past few days. Ki Young Ju, the CEO of CryptoQuant argued in a post on X that with the right regulatory framework, crypto and Web3 could thrive responsibly, mitigating the risks of scams and building trust in the industry.
He believes that Web3 protocols could one day involve millions of people and could enable borderless collaboration, much like a protocol rather than a corporation. Ju still acknowledged the presence of scams in the industry, but believes it is very similar to other financial sectors, and stressed the importance of "smart regulation" for sustainable growth.
His comments ignited a debate in the crypto community. Reactions ranged from agreement to concern. Some supporters endorsed Ju’s views, and recognized the need for regulation to foster trust and long-term development. On the other hand, others voiced their apprehension, and are concerned that regulation might stifle the potential for profits in the crypto space.
One user went as far as to label crypto and Web3 a scam, and argued that regulation will curb the financial gains associated with the industry. Others sarcastically suggested that handing everything over to regulators will remove the need for the community to make its own decisions.
Concerns were also raised about the centralization of regulatory authority. Some critics argue that centralization could create monopolies and stop competition. One user pointed out the potential for corruption if too much power is given to regulators, and suggested that markets could instead "self-regulate."
Dutch Regulator Issues Warning as MiCA Approaches
Crypto regulation is also on people’s minds outside of the US. The Dutch Authority for the Financial Markets (AFM) issued a warning about the risks of crypto pump-and-dump schemes in anticipation of the upcoming Markets in Crypto-Assets Regulation (MiCA), that is set to take effect on Dec. 30.
MiCA will explicitly prohibit market manipulation practices, including pump-and-dump schemes, across the European Union. The AFM will be responsible for overseeing and enforcing these regulations in the Netherlands. One of the main goals of the regulation is to enhance transparency and protect investors, though it will not eliminate all of the risks in the crypto sector.
Pump-and-dump schemes involve artificially inflating the price of an asset, typically through misleading information and encouraging public investment at inflated prices. Once the price peaks, the organizers sell off their holdings, leaving investors with devalued assets.
How a pump-and-dump scheme works (Source: AFM)
The AFM has been investigating several cases of these schemes and plans to strictly enforce MiCA once it becomes law. According to Hanzo van Beusekom, a member of the AFM’s executive board, these schemes undermine trust in the crypto market, which is very crucial for the long-term success of digital assets.
While MiCA’s goal is to elevate the maturity of the crypto industry, some still fear that the regulation could drive Web3 firms out of Europe. Anastasija Plotnikova, the CEO of Fideum, is concerned that MiCA could lead to consolidation in the crypto industry, which will make it more like traditional finance and will push firms to move to regions like the Middle East.
UK Tax Policy Pushes Investors Away
Billionaire investor Christian Angermayer relocated from the United Kingdom to Lugano, Switzerland, because of the UK's planned tax hikes on offshore wealth. Angermayer, who was considered a "non-dom" in the UK, benefited from tax breaks on overseas income for up to 15 years, but that was reduced to four years in March of 2024.
The Labour Party, which is led by Prime Minister Keir Starmer, is pushing to eliminate inheritance tax breaks on assets held in overseas trusts. Angermayer criticized these changes, and called them a "huge mistake." He even compared their impact to Brexit, claiming many non-doms are leaving the UK as a result.
Despite Angermayer's departure, his family office called Apeiron Investment Group will continue to maintain its London office. Apeiron focuses on investments in biotech, cryptocurrency, and psychedelics. Angermayer is a known Bitcoin advocate, and recently spoke at the Token2049 conference in Singapore, where he discussed how Bitcoin and psychedelics share a common theme of freeing people from government control.
Angermayer's move to Lugano aligns with the city's growing reputation as a Bitcoin hub, where close to 250 merchants accept Bitcoin payments. Tether's USDT stablecoin is also widely used in Lugano, thanks to a partnership with local authorities that has encouraged a crypto-friendly economy. The city has been hosting the Bitcoin-themed "Plan ₿ Forum" conference since 2022.
In addition to his investments in Bitcoin, Angermayer is involved with the crypto-focused Samara Asset Group and Bitcoin miner Northern Data AG, where he introduced Tether before the stablecoin issuer took a stake in the company. He is also a co-founder of Enhanced Games, a competition alternative to the Olympics that supports performance-enhancing drugs, which is also backed by former PayPal CEO Peter Thiel.
