Global economic conditions are tightening; interest rates are in flux; and inflation has yet to be curbed. Considering the economic headwinds, the fact that Silvergate Bank, Silicon Valley Bank and other banks are breaking is not surprising.
But why now? Quickly rising interest rates are extremely disruptive to banking models, but the collapse of these particular banks has raised eyebrows. It just so happens that these banks are important to the crypto industry.
Government agencies often use the selective enforcement of convoluted or unclear rules and regulations to pursue agendas. They can then defend the action by saying that the public’s interest was at stake.
Here’s the analogy: An apartment building needs to be removed for an upcoming freeway expansion project. The choices are to either execute eminent domain, a scenario where the government has the ability to overrule all leases and ownership and take control of the property. This would not be a popular decision with the community. There is another option. The local government could simply not enforce pre-existing regulations around maintenance and upkeep, thus letting the property slip into disrepair.
When I warned about chokepoint a month ago, I didn’t think in a million years that they would go 100x further and actually take down the top 3 crypto-facing banks. It’s breathtaking. And this wasn’t an accident. It was a demolition https://t.co/HacUQfUWWF
A government inspector shows up. The property needs major updates or it will have to be condemned. The property owner cannot afford to get the property up to code. And the inhabitants must move and be relocated for their own safety.
This is the way the government works.
The government sets up broad rules and regulationsRead more on cointelegraph.com