tl;dr
Bloomberg columnist Matt Levine states that banning cryptocurrency in the U.S. is no longer feasible due to the industry's size and global reach. He argues that proper regulation is the only realistic option. Levine suggests the SEC should adapt its approach, moving away from treating crypto tokens ...
The idea of banning crypto in the U.S. is officially off the table – at least according to Bloomberg columnist and ‘Money Stuff’ author Matt Levine. In a recent op-ed, Levine writes, “That ship has sailed.” Despite the risks and “lots of dumb stuff” in crypto, he says the industry has grown too big and too global for the SEC to shut it down now. But ignoring it isn’t an option either. With crypto here to stay, the only realistic path is proper regulation. Things are moving ahead, but is it enough?
SEC Must Change Its Approach
Levine believes the SEC is still the best agency to regulate crypto but not by forcing digital assets into outdated rules made for stocks. “Many crypto projects are securities-ish… but they are not quite the same thing as stock, and those protections should be tailored to what they are,” he explains. Under former SEC Chair Gary Gensler, the agency took a hard stance treating nearly all crypto tokens as securities and cracking down through lawsuits. That approach, Levine says, was more hostile than helpful. Now, with Chair Paul Atkins taking a different direction, things may shift. His new initiative, Project Crypto, aims to make it easier for token issuers to register their assets in a way that fits the nature of crypto and not traditional stocks.
How Gensler’s Policies Hurt the Market
Gensler’s enforcement-first approach frustrated the industry but also triggered real damage. A research study analyzing SEC enforcement found that crypto prices dropped by an average of 5.2% within three days of each announcement and 17.2% over the following month. Trading volumes also fell sharply, especially for smaller or riskier tokens. Without clear rules, investors pulled back, and markets became more fragile. Even major tokens weren’t safe, as the uncertainty spread across the ecosystem. The worst seems to be behind us now.
Trump’s Digital Push Is Changing the Game
On July 30, the White House released a 166-page report titled “Strengthening American Leadership in Digital Financial Technology.” The goal was to support digital innovation, end regulation by enforcement, and focus on bad actors and not the entire crypto sector. JPMorgan CEO Jamie Dimon said, “We’re going to be in it and learning a lot, and a player,” when asked about stablecoins. Banks could soon offer tokenized investments or stablecoin services. It won’t happen overnight, but the shift is underway.
What Comes Next for the SEC?
Levine puts it plainly that the SEC has three options – ban crypto, ignore it, or regulate it properly. The first two are no longer realistic. “The only choice left is ‘we will regulate crypto, but in a way that you like,’” he writes. With Gensler gone and the U.S. government pushing for smarter digital asset laws, crypto regulation in America is entering a new phase.