Forbidden Fruits – Why to Stay Away from Crypto

This story highlights actions taken by the US Government in 2023, and how I feel Robinhood mishandled my private investments:

• (2023) Investing in smaller popular cryptocurrencies like Solana, Cardano, and others just became much harder.
• (2023) The US Securities and Exchange Commission (SEC) filed a lawsuit and is seeking to freeze assets of crypto investors.
• The biggest crypto coins, Bitcoin and Ethereum, have curiously been omitted from actions taken by the US government.
• Conspiracy theories claim that the US is trying to get rid of a lot of crypto on the market to make way for its own digital currency, called the Central Bank Digital Currency (CBDC).

UPDATE (2025): Though the SEC has relented on its position regarding identified cryptocurrencies, the damage is done. For example, I was forced to sell my Solana (SOL) after Robinhood gave an ultimatum to sell immediately, or the holdings I had would simply be deleted. The price was very low at the time of the announcement and I lost tens of thousands of dollars. Of course, after the SEC stopped its actions against certain cryptos, Robinhood has SOL back in their app to buy and sell, but at a much higher price. Essentially, I lost over $100 per coin due to the actions in which I was forced to take, and had hundreds of coins. Thus, I consider the cryptocurrency market to be nothing more than a scam that is manipulated to take money away from the common investor. BUYER BEWARE!

UPDATE (2023): Robinhood investment firm has announced that they will automatically sell the cryptocurrencies named in the SEC lawsuit. Users have until June 23 2023 to sell these cryptos on their own. Afterwards, they will be sold at market price.

Cryptocurrencies and the anonymous blockchains that they live on have long been thought to be a tool of the more nefarious entities out there like the mafia, as well as general criminal activity. For example, ransomware attacks, which lock up a person’s computer files unless a ransom is paid, is usually asked for in Bitcoin.

Due to the anonymous nature of these coins, the US government has long kept an eye on these digital markets. In June 2023, the federal government has gone after two of the largest cryptocurrency exchanges in the world, Binance and Coinbase. Binance, with two ‘store fronts’: One in the USA (Binance.us) and everywhere else (Binance.com), it has tried to appease the watchful agents of the United States, but the government still isn’t satisfied and has asked the courts to freeze the assets of certain entities of Binance.us. At the same time, the US Securities and Exchange Commission (SEC) listed over a dozen popular cryptocurrencies in a lawsuit going after Binance and Coinbase.

In essence, the US government is putting the squeeze on these digital coins to make them fall under very strict commodities rules. It’s possible that they have noticed some suspicious activity. By listing them as securities, the anonymity will be stripped away. If criminals are behind the big transactions, they will likely move to other digital vehicles to launder their wealth. Notably, Bitcoin was not listed in the filing to be scrutinized. This creates a lot of confusion since it’s fairly well known that Bitcoin was used extensively as a money laundering cryptocurrency.

The other angle here is to scare potential investors, like myself, from continuing in the crypto market. Certainly, I don’t want to have my crypto frozen and lose my investment. Back in 2021, people were making money hand-over-fist with returns from 10x to over 1000x of their investments in very short periods of time. It’s true that many of the larger winnings were done outside of regulated exchanges, and I’m sure the US government wanted their fair share of the spoils. But these days, things are much more tame and a lot of work has been done by Crypto.com, Coinbase, Robinhood, and Binance.us to be legit entities.

One can’t fail to mention the conspiracy theory aspect of all this marshal activity. In the works is the US Government’s own blockchain digital currency called CBDC (central bank digital currency). Many experts believe this blockchain-based US dollar will compete directly against all the existing digital currencies. The one main feature may be that the CBDC won’t have the anonymous feature that the established cryptocurrencies (Bitcoin, Ethereum, Solana, Cardano, etc.) have. CBDC will likely be combined with the new FedNow money transfer system coming online next month. FedNow will give Zelle®️ a run for its money and I believe the new system will usher in a new way to transfer and spend money in this country.

There’s a lot going on right now with digital currencies and the US government. The best advice when dealing with cryptocurrencies is this: If you can afford to flush the money down the toilet, go ahead and give your crypto desires a try. You may make a nice return, or you may lose it all. But in the end, Uncle Sam is always watching.