Are cryptocurrencies dead?

Crypto has been falling for months, from regulators warning about scams and prosecuting companies to values plummeting. But is it the end of crypto?

In June, the Securities and Exchange Commission (SEC) pressed charges against two of the biggest crypto firms that operate in the US: Binance and Coinbase.

Binance is the largest crypto exchange service in the world. The commission filed 13 charges against the company, including mishandling customer funds.

Coinbase is a public company and the biggest crypto business in the US. The commission accused it of failing to register as a broker service.

Those cases are not even the most significant scandals to hit the crypto world. FTX, the world's most renowned exchange, declared bankruptcy a few months before.

Sam Bankman-Fried, the founder of FTX, was charged with conspiring to violate campaign finance laws and bribing Chinese authorities.

Even tech investor Chamath Palihapitiya, a big cryptocurrency advocate, said in a podcast: "Crypto is dead in America." He mainly blamed regulators.

Coinbase has done the same thing, demanding that the commission clarify the regulations for the crypto industry, said Forbes. Including what currencies qualify as securities or assets.

However, some experts disagree. Dennis Kelleher, a financial regulation advocate, told The Atlantic that the SEC is "trying to enforce the most basic investor protections," it is the obvious authority given that most cryptocurrencies are securities.

Some lawmakers have even gone further in their dislike of the sector. Elizabeth Warren, for example, said she is "building an anti-crypto army" in declarations collected by Forbes.

According to Forbes, Gary Gensler, SEC chairman, linked the collapse of Silvergate and Signature Bank to their bitcoin and crypto activities in a House hearing.

Congress had been more open to discussing a specific regulation for crypto exchange, but according to The Atlantic, the FTX scandal hurt those chances.

But regulation battles are not the only problems crypto companies have faced in the last few months. According to Reuters, rising interest rates have devalued cryptocurrencies.

The cryptocurrency market is highly volatile. It is usual for some securities to experience ups and downs, but none do it as crypto. It went from a peak in 2021 to losing 60% of its value in some cases.

Aside from the highly known cases of big firms, the Security and Exchange Commission has prosecuted many other small firms for fraud, explains The Atlantic.

Reuters argues that it is also hard for investors to commit to such speculatory assets when Central Banks and the Federal Reserve push to cool down the economy to fight inflation.

Experts cited by The Atlantic also doubt the utility of cryptocurrencies as assets. Denis Kelleher questioned if there is any social or public interest in enabling a financial product like crypto in declarations for the magazine.

And according to a CNBC survey, only 8% of Americans have a favorable view of cryptocurrencies, down from 19% in March of this same year.

It is also hard to get behind a financial product you can not understand. The complexity of cryptocurrency has also pushed many potential buyers away.

However, it is impossible to say that crypto is dead, explains The Atlantic. Some experts told the magazine that it is still helpful or revolutionary to some extent if the "cynical" main actors of the market change.

It can be argued that cryptocurrency never accomplished the changes it dreamed of. It has not deemed the destruction of the financial status quo the first crypto boosters predicted.