Rep. Mike Flood Readies For The Long Haul With Digital Assets Legislation

Rep. Mike Flood

When the House Financial Services’ (HFS) Committee abbreviated markup concluded last Thursday, Rep. Mike Flood (R, NE) likely felt some well-deserved relief.

With momentum building over the past few months, the Securities and Exchange Commission’s (SEC) controversial Staff Accounting Bulletin (SAB 121) had become an increasing part of Flood’s legislative remit with his sponsorship of a standalone bill [H.R.5741] and co-sponsorship of a joint resolution [H.J.R.109] intended to rescind the controversial rulemaking-but-not-a-rule by the securities regulator.

At its heart, SAB 121 effectively prevents big banks – well-regulated banks – from taking custody of crypto assets which arguably inhibits the growth of digital assets within the U.S. financial system.

By a vote of 31-19, the joint resolution passed out of the HFS committee markup with bipartisan support and now heads to the House floor for a vote. No doubt, the SAB 121 saga is far from over.  In addition to the House vote, the Senate will need to move on the resolution as will the President… and time is ticking on the 118th Congress.

Nevertheless, it’s a positive development in the eyes of Rep. Flood who is relishing his first session of Congress as part of the majority on the HFS Committee and its Subcommittee on Digital Assets, Financial Technology and Inclusion.

Flood had been a strong advocate for the creation of digital assets legislation. Overall in the 118th Congress,  he has also been a robust legislator sponsoring 12 bills and co-sponsoring 175 bills according to Congress.gov.

On Friday, spinning out of last week’s HFS markup, Rep. Flood discussed SAB 121, digital assets, the SEC and his experience in Congress with blockchain tipsheet.

Topics included:

    • Perspective and the Banking Crisis
    • Reviewing SAB 121, Next Steps
    • Uniform Treatment of Custodial Assets Act
    • Members Need Education… Now
    • Congressional Staff
    • CFPB’s Wallet Proposal
    • Looking Ahead & 119th Congress

The interview has been lightly edited for clarity. Continue reading “Rep. Mike Flood Readies For The Long Haul With Digital Assets Legislation”

Interview: Rep. Ritchie Torres Making Progressive Case For Digital Assets

Rep. Ritchie Torres

As a member of the House Financial Services (HFS) Committee and proud representative of his district in the Bronx, New York, Rep. Ritchie Torres (D, NY) has been at the front of lines of the evolution of the U.S. financial system in the 118th Congress.

And though he’s a staunch supporter of the Democratic Party, Torres has been unafraid to break with his Caucus’ leadership when he has believed it’s in the best interests of his constituency. Digital assets has been one such beneficiary of his independence.

Congressman Torres voted in support of the stablecoin and digital asset market structure bills at markup hearings last July, co-sponsored the bipartisan Keep Innovation In America Act of 2023 [H.R.1414], signed on to support numerous bipartisan Congressional letters on digital assets and consistently delivered engaged, tough questioning of U.S. government regulators at public hearings.

After the conclusion of an HFS Subcommittee for Digital Assets, Financial Technology and Inclusion hearing on illicit finance earlier today, Rep. Torres discussed his views on digital assets and Congress with blockchain tipsheet.

Topics included:

    • The progressive case for digital assets
    • Where “Big Tech” fits in
    • Stablecoin legislation
    • The SEC and crypto
    • Congressional generational divide
    • On the industry
    • SAB 121

The interview has been lightly edited for clarity. Continue reading “Interview: Rep. Ritchie Torres Making Progressive Case For Digital Assets”

Rep. Larry Bucshon On Congress And Ensuring U.S. Leadership On-Chain

Rep. Larry Bucshon

When the 118th Congress started last year, blockchain-related legislation was focused on digital assets and financial industry applications – i.e. crypto. Yet, slowly but surely, legislation related to the blockchain emerged on the House Energy and Commerce (E&C) Committee with special focus on how the technology can provide unique opportunity to American business and its supply chains.

Among those leading the E&C charge has been Rep. Larry Bucshon (R, IN), who recently announced his retirement after 14 years in Congress.

Congressman Bucshon introduced a supply chain resiliency bill at a September Energy & Commerce hearing which would establish the “National Blockchain Promotion and Deployment Program” at the Department of Commerce.

Post-hearing, two bipartisan bills came about with co-sponsor Rep. Lisa Blunt Rochester (D, DE):

    • Deploying American Blockchains Act [H.R. 6572]” – “To direct the Secretary of Commerce to take actions necessary and appropriate to promote the competitiveness of the United States related to the deployment, use, application, and competitiveness of blockchain technology or other distributed ledger technology, and for other purposes.”
    • Promoting Resilient Supply Chains Act [H.R. 6571]” – “To establish a critical supply chain resiliency and crisis response program in the Department of Commerce, and to secure American leadership in deploying emerging technologies, and for other purposes.”

The bills passed unanimously passed during a December E&C markup which sent them to the House floor for a still-pending vote.

Rep. Bucshon spoke with blockchain tipsheet today at the Capitol to discuss his views on blockchain technology, legislation and Congress.

Topics included:

    • Congress today
    • E&C technology policy
    • Two blockchain bills
    • House floor vote possibilities
    • Bipartisanship and divided government
    • Educating Members
    • Importance of Congressional staff
    • The role of Industry
    • Senate and making law

The interview has been lightly edited for clarity. Continue reading “Rep. Larry Bucshon On Congress And Ensuring U.S. Leadership On-Chain”

Interview: Rep. Wiley Nickel Sees ‘Big Impact’ Ahead With Digital Assets

Rep. Wiley Nickel

With his first year in Congress complete and his last year ahead (he’s running for Senate in 2026), Rep. Wiley Nickel (D, NC) has been a consistent supporter of potentially transformative bills from the House Financial Services (HFS) Committee, which he joined at the beginning of the 118th Congress.

The digital asset market structure bill known as “Financial Innovation and Technology for the 21st Century Act” [H.R. 4763], included early support from Rep. Nickel where he eventually voted with five Democrats and all of the Committee’s Republicans to support the bill during a July HFS markup.

In another July HFS markup, Rep. Nickel was one of 5 Democrats – along with  the majority Republicans – who supported a long-awaited stablecoin bill, “Clarity for Payment Stablecoins Act of 2023” [H.R. 4766]. Both bills now move to the House Floor for a vote.

Rep. Nickel spoke with blockchain tipsheet in Washington D.C. this week to discuss Congress and digital assets including:

    • Learnings during his first year
    • The Bitcoin ETFs and regulators
    • Partisanship and the Democratic Party
    • Anti-Money Laundering
    • His constituency and digital assets
    • Stablecoin and market structure bills
    • The importance of Congressional staff
    • 2026 Senate run, his platform and digital assets

The interview has been lightly edited for clarity.

blockchain tipsheet: What’s surprised you the most in your first year of Congress?

Rep. Wiley Nickel: It’s been a great first year in Congress. The surprise for me has just been how much I like the people I serve with – the absolutely amazing people that you don’t really hear about. They’re not the people on the far left or the far right. They are people who care about their country, they are working hard – in my experience – behind the scenes and it’s very different from what the public sees. I think there are a lot of people that that are very serious about trying to work together. And I think the Financial Services Committee is one of the few committees that’s really going to move some good bipartisan bills through the House and signed into law. Continue reading “Interview: Rep. Wiley Nickel Sees ‘Big Impact’ Ahead With Digital Assets”

Interview: Senator Cynthia Lummis Is Optimistic About Digital Assets In Congress This Year

Senator Cynthia Lummis

As Congress picks up speed this month in spite of election year hurdles, Senator Cynthia Lummis (R, WY) has been busy thinking about – and working on – next steps for digital assets legislation among the many initiatives and responsibilities she and her team oversee.

Her “Lummis-Gillibrand Responsible Financial Innovation Act” [S.2281] has been been a key, proposed framework for digital assets in the Senate and Congress.

The bill, first introduced in the 117th Congress, and updated for the 118th, is a comprehensive, digital assets regulatory framework co-sponsored by New York Democratic Senator Kirsten Gillibrand. “Lummis-Gillibrand,” as it is known, appears to have weathered the buffeting winds of FTX, a bear market, Congressional skepticism and the seemingly recalcitrant Securities and Exchange Commission (SEC) – to name a few.

Senator Lummis sat down with blockchain tipsheet at the Capitol today to discuss all things digital assets and Congress including:

    • The Bitcoin ETF watershed moment
    • State of digital assets legislation today
    • Lummis-Gillibrand and funding regulation with “wash sale” rule
    • Stablecoin bill update
    • Reflections on the NDAA digital assets AML amendment
    • Binance, Tether and illicit finance
    • SAB 121 and next steps

The interview has been lightly edited for clarity.

blockchain tipsheet: Is the approval of Bitcoin spot market ETF’s a watershed moment for digital assets?

Senator Cynthia Lummis: I think it’s important because it gives consumers who are not ready to dive in with both feet – who are not ready to self-custody – exposure to Bitcoin through an exchange-traded fund, which is a very well known vehicle to get exposure to valuable assets.

It’s important for consumer assurance that this is an asset worth holding in a diverse asset allocation and that now they can have exposure to it without having to be an expert. [It also] helps integrate Bitcoin into the traditional asset management world. So, I do think it’s a watershed moment. Continue reading “Interview: Senator Cynthia Lummis Is Optimistic About Digital Assets In Congress This Year”

Majority Whip Tom Emmer Discusses The State Of Digital Assets In Congress Today

Majority Whip Tom Emmer

With a holiday recess approaching in the U.S. House of Representatives, Majority Whip Tom Emmer (R, MN) is still making the most of the 2023 Congressional calendar while preparing for next year.

He knows the drill.

Emmer, who has been a key advocate for digital assets legislation, first joined Congress in 2015 and served as Chairman of the National Republican Congressional Committee in the 116th Congress and 117th Congress. He currently sits on the House Financial Services Committee.

Digital assets legislation he has sponsored in the current Congress includes Blockchain Regulatory Certainty Act [H.R. 1747], CBDC Anti-Surveillance State Act [H.R. 5403] and Securities Clarity Act [H.R. 3572].

Whip Emmer sat down with blockchain tipsheet at the Capitol on Tuesday to discuss the state of digital assets including:

    • 2023 digital asset highlights
    • Member education on digital assets
    • Congressional staff and legislation
    • Looking ahead
    • Crypto, AML and terrorist financing legislation
    • CBDCs
    • National security

The interview has been lightly edited for clarity.

What are your highlights for 2023 when it comes to digital assets?

Majority Whip Emmer: I had high hopes coming into the 118th Congress because of our new [House Financial Services] Chairman. Patrick McHenry (R, NC) is someone who understands the digital asset space.

Patrick and I have been close since I came to Congress -he was assigned to me as my mentor when I got here… I was excited because I know that this was a passion of his. I was also excited because even though we’ve had a fight it seems with the White House under the last Administration and now under this Administration, and with some certain Senators – and some in the House but not quite as much. Republicans and Democrats in the House are learning very quickly about the space.

So, highlights of this year are watching Republicans and Democrats on the House Financial Services Committee literally collaborate on digital assets issues. We may not see it in the actual committee votes, but it’s happening with French Hill (R, AR), with Patrick McHenry, Richie Torres (D, NY) and Josh Gottheimer (D, NJ), Jim Himes (D, CT) – Himes has been very helpful – and Greg Meeks (D, NY). You could keep going on.

We passed a CBDC bill out of committee to outlaw central bank digital currencies, which is something that I’m adamant about. We’ve gotten a lot of support for it. And then Patrick McHenry managed to set us up for market structure and, potentially, stablecoin legislation. And there could be others on the way, but that’s just this year.

For the first time since I arrived in Congress eight years ago, we have some very consequential things in the space that are moving forward. Continue reading “Majority Whip Tom Emmer Discusses The State Of Digital Assets In Congress Today”

Letters on the Edge of Regulation

Letters from Congress

When it comes to disagreements over crypto and its regulation, DC policymakers have consistently chosen the humble “letter” as an impactful device.

Often signaling a disagreement of some sort between the sender and the receiver, a Congressional letter is like publishing a press release, but with more personalization and a purposeful lack of discretion.

With 4 months still remaining in the calendar year, 2022 has gotten off to a prodigious start among DC letter writers with crypto on their minds. Here is a sample of what we’ve seen thus far in reverse chronological order:

August 23, 2022
From: Rep. Tom Emmer (R, MN)
To: US Treasury
Subject: DeFi application Tornado Cash

Rep. Tom Emmer wrote in an open letter to the U.S. Treasury Department and Secretary Janet Yellen, an appointee of Democratic President Joseph Biden and member of his Cabinet, requesting clarifications about the sanctioning of mixing service Tornado Cash on August 8. A “senior official” summarized Treasury’s case in a quote for The Wall Street Journal: “Mixers are basically an automated money-laundering service.”

Effectively, The Office of Foreign Assets Control (“OFAC”) under the auspices of Treasury had for the first time ever sanctioned code rather than a person or entity. Emmer’s letter identified 7 questions for which he wanted answers including guidance on how OFAC determines that a wallet address might be sanctioned. The congressman’s pithy conclusion offered that the decentralized Tornado Cash mixer may have been used for illicit services, “Nonetheless, technology is neutral and privacy is normal.”

The four-page letter signed by Rep. Emmer was released in a tweet. The Congressman is co-Chair of the Congressional Blockchain Caucus, a U.S. House Financial Services committee member and Ranking Member of its Task Force on Financial Technology,

Continue reading “Letters on the Edge of Regulation”

From 600 to 200 to 50, The De Minimis Exemption For Crypto Dwindles, Gains Support

diminimis exemption

Purchasing a cup of coffee using Bitcoin triggers a capital gain whether crypto coffee drinkers care to admit it or not – and, that tiny transaction must be reported to the Internal Revenue Service (IRS). But recently, Senator Pat Toomey (R, PA), who is Ranking Member of the Senate Banking Committee, and Senator Kyrsten Sinema (D, AZ) sought to make things more equitable and efficient for consumers making small payments with cryptocurrency.

Known as the “Virtual Currency Tax Fairness Act” and rolled out on July 26, the law would create “a sensible de minimis exemption for gains of less than $50 on personal transactions and for personal transactions under $50 [sic],” according to a press release.  The new law, if it passes, would update the tax code from 1986.

Sen. Sinema added the Arizona perspective in the release, “We’re protecting Arizonans from surprise taxes on everyday digital payments, so as use of digital currencies increases, Arizonans can keep more of their own money in their pockets and continue to thrive.” She is a member of the Senate’s Financial Innovation Caucus which promotes the use of blockchain tech and innovative technologies and includes Senator Cynthia Lummis (R, WY) whose RFIA bill looks to guide blockchain regulation in the US.

Continue reading “From 600 to 200 to 50, The De Minimis Exemption For Crypto Dwindles, Gains Support”