Bitcoin could hit new lows as US Treasury Secretary, Steven Mnuchin warns of impending strict regulations

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CNBC’s Squawk Box held a live interview with the US Secretary of Treasury, Steven Mnuchin earlier yesterday. During the interview, Mr Mnuchin spoke on cryptocurrency, bitcoin mostly, for the second time this past week. In this interview, he forewarned the bitcoin community that the United States Government was preparing to unleash tighter regulations to curtail illicit activities bankrolled by cryptocurrencies.

Bitcoin If Unregulated, Could ‘Become The Equivalent Of Swiss-numbered Bank Accounts

Mnuchin issued a stern warning that bitcoin portrays all the markings of a Swiss bank account doubling down on his concerns about bitcoin usage in funding criminal activities. He explained that this poses a great threat to the US financial system.

He stated, “We’re going to make sure that bitcoin doesn’t become the equivalent of Swiss-numbered bank accounts, which were obviously a risk to the financial system.” He added saying that it has come to the government’s attention that bitcoin and cryptocurrencies have been used to fund money laundering and terrorists amounting to “billions of dollars” and hence why the government intends on to keep a keen guard over cryptocurrencies.

Joe Kernen, Squawk Box’s host, commented on fiat money usage in illicit activities and money laundering all the time and the US Secretary responded that was not true. “I don’t think that’s accurate at all, that cash is laundered all the time. We combat bad actors in the US dollar every day to protect the US financial system,” Mnuchin firmly asserted.

Is Bitcoin Based On “Thin Air”?

President Trump went on a Twitter tirade where he bashed bitcoin saying it’s based on “thin air” and has a highly volatile value. In the two occasions that the US Secretary has shared his sentiments on bitcoin, crypto, and Libra, he has always voiced his concern about their use to fund illicit activities. He has also talked of the importance of a crackdown on cryptocurrencies to curb these criminal activities. 

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Joe asked him whether he believed bitcoin was based on “thin air” and “has no inherent value” as he had commented during his last interview. Joe then sought clarification on if Steven had looked keenly into the decentralized blockchain technology on which bitcoin is backed.

Steven responded saying that he shared most of the President’s concerns on cryptocurrencies, bitcoin, and Libra, adding that when he used the term “thin air”, he was only quoting President Trump. Steven said, “I think the technology has certain uses. I would separate blockchain from bitcoin.”

Bitcoin Market Reaction

During Steven’s interview with Squawk Box, bitcoin was trading above $9,800. After this interview, the price dipped to $9,400. However, within an hour, bitcoin has rallied by more than $1,000 to trade comfortably above $10,300 at press time.