the presidential platform
Last week, former President Donald Trump made digital assets part of his 2024 presidential campaign platform in no uncertain terms.
According to The Hill, Trump told a campaign crowd in New Hampshire, “Tonight, I am also making another promise to protect Americans from government tyranny. As your president, I will never allow the creation of a central bank digital currency.” Read more in The Hill.
what you should know: By vowing to block creation of a Central Bank Digital Currency (CBDC), the President Trump takes up the cause of the myriad pieces of anti-CBDC legislation introduced by Republicans – and some Democrats – in Congress.
Trump’s comment may have also put new momentum behind a House Floor vote for bills such as House Majority Whip Tom Emmer’s (R, MN) CBDC Anti-Surveillance State Act [H.R. 5403] which passed out of a House Financial Services markup in July. Whip Emmer tweeted on Friday, “I agree with President Trump; CBDCs pose a serious threat to Americans’ right to financial privacy.”
Trump’s CBDC comment may be fortuitous for House Republicans who increasingly need some wins while their Caucus struggles to fund the government.
Former President Donald Trump has not been shy about using NFTs (non-fungible tokens) for fundraising. CoinDesk reported that nearly $7 million had been amassed in crypto and NFT licensing fees as of last August.
In fact, over the weekend, three Trump NFT collections tracked by NFTPriceFloor showed a combined market capitalization of approximately 22,000 Ether or $54 million.
Good news for his NFT holders, he’s launching a Bitcoin ordinal NFT, too, which costs a mere $9,900. Read about it in CoinDesk.
See CollectTrumpCards.com for the sale of the new Trump “mugshot” edition.
what you should know: NFTs may give the traditional fundraiser dinner table a literal run for its money – especially with the younger crowd. Moreover, increased use of NFTs for fundraising purposes increases the exposure of digital assets and blockchain technology to voters in the presidential campaign narrative.
Similar to the CBDC issue, though, there is a chance that digital assets becomes more partisan.
the crypto voter
With Trump’s embrace of the anti-CBDC mantra, crypto could become increasingly known as “anti-elite” – or worse for current President Joe Biden – “anti-Biden.”
“Pro-crypto” would be new for former President Trump, who derided Bitcoin in 2021 as a scam. The change has been rumored to be attributable to the urging of former Republican presidential candidate Vivek Ramaswamy.
Whether crypto’s perceived as “anti-elite” or “anti-Biden,” the Biden Administration could have a new 2024 general election numbers problem on its hands:
At the same time, fighting against this “pro-crypto” perception will be all of the financial malfeasance and loss which has occurred in digital assets in the last two years and empowered the “anti-crypto army” – such as TerraLuna, FTX, Binance and Celsius to name a few.
what you should know: President Biden will still have the opportunity in 2024 to swing into digital assets if he needs to. For example, he can trumpet as “visionary” his Digital Assets Executive Order (EO) of early 2022, sign a stablecoin bill into law or soften the every-crypto-is-a-security position of the Securities Exchange Commission and its Chair Gary Gensler (who could approve more crypto-related ETFs, for starters).
Warren picks up GAO baton
A new Government Accountability Office (GAO) report released last week and titled, “The Effectiveness of Economic Sanctions At Risk from Digital Asset Growth,” concludes that countries like North Korea and Iran are using digital assets to evade sanctions, but, on the other hand, “advancements in capabilities to trace transactions and identify illicit actors could mitigate some sanctions evasion risks.” Download it here.
Last night, Senator Elizabeth Warren (D, MA) linked out to the new report and tweeted, “A new [GAO] report confirms that rogue nations are using crypto to dodge sanctions and undermine our national security. It’s time for crypto to follow the same anti-money laundering rules as everyone else. I’ve got a bill to make it happen.” The bill is the Digital Asset Anti-Money Laundering Act (DAAML) [S.2669] which she re-introduced with Senator Roger Marshall (R, KS) last year and has an additional 18 co-sponsors.
Davos was “boring” according to one crypto company attendee and thankfully so. Politico’s Zach Warmbrodt captures the crypto zeitgeist at last week’s World Economic Forum in Davos, Switzerland, and writes, “While crypto continues to battle with SEC Chair Gary Gensler and Senator Warren over consumer protection and financial crime concerns, [crypto] industry executives at Davos say the environment at the WEF is much more inviting. It’s an opportunity for them to pitch the benefits of digital assets to other world leaders who may be more open-minded.” Read more.
China forms metaverse working group with Huawei, Tencent, Ant Group and others – The Block
Senator Hagerty bill
Amidst the fog created in the media by last Wednesday’s Coinbase motion-to-dismiss hearing, Senator Bill Hagerty (R, TN) introduced a new bill aimed at illicit finance and crypto with co-sponsorship from Senate Banking Committee member Senator Cynthia Lummis (R, WY).
Titled, “Preventing Illicit Finance Through Partnership Act of 2024,” the bill echoes past legislative efforts targeting illicit finance “by fostering communication between federal law enforcement agencies and private companies.” Senator Hagerty said in the press release, “Federal law enforcement agencies already have the tools to combat illicit finance—they just need to communicate with the private sector to deploy them most effectively.” said Senator Hagerty. Full text of the bill here (PDF).
Cap Hill Crypto’s George Leanardo analyzes the bill and notes that it is unlikely to move forward without a Democrat sponsor from the Senate Banking Committee which is controlled by the majority Democrats and Chair Sherrod Brown (D, OH). Leonardo adds, “…unlike previous proposals in the Senate like DAAML and CANSEE, this bill offers an alternative approach whereby federal agencies would be encouraged to work with crypto firms to combat illicit finance, rather than simply view the industry as a target.” Read more on Cap Hill Crypto.
what you should know: Will the House Republicans respond quickly with something similar to head off the rumored House introduction of DAAML by Rep. Sean Casten (D, IL)? Regardless, the Hagerty bill is another example of the modular nature of the bipartisan Lummis-Gillibrand Responsible Financial Innovation Act [H.R. 2281]. Like last years’s amendment [S.712] to the National Defense Authorization Act (NDAA), Hagerty and Lummis appear to break off a piece of the bill to fit the moment. The calculus is that digital assets legislation – and an eventual framework – will come in bits and pieces in a divided government.
Congressional Research Service
SEC Approves Bitcoin Exchange-Traded Products (January 19) – congress.gov
Law Enforcement and Technology: The “Lawful Access” Debate (January 16) – congress.gov
seat at the table
Rep. Don Beyer’s (D, VA) “Digital Asset Market Structure and Investor Protection Act” [H.R. 5745] sought new life last week in the House Agriculture Subcommittee on Commodity Markets, Digital Assets, and Rural Development according to Congress.gov. The bill still lacks co-sponsorship from either party but now joins the dockets of House Ways and Means (a Beyer committee) and House Financial Services.
Last September, Beyer announced his interest in a “seat at the table” of digital asset legislation with his “Off-Chain Digital Commodity Transaction Reporting Act” (more) which requires the Commodity Futures Trading Commission (CFTC) to aggregate all crypto trade data from exchanges. At the time, industry organization Digital Chamber of Commerce cited feasibility and privacy concerns among other issues with the bill.
Virginia introduces bill to protect digital assets mining rights – Cointelegraph
what you should know: Bills like Rep. Beyer’s could see new life if a Democratic-controlled House transpires in 2025. Beyer’s own path to re-election seems assured in November: he crushed his Republican challenger with 73% of the vote in 2022.
German CEO of Crypto Investment Platform Charged in $150 Million+ International Fraud Scheme – Justice.gov
CFTC Charges Bogus Digital Asset Platform with Fraud and Misappropriation in an Online Romance Scam – CFTC.gov
still more tips
EU Provisionally Agrees Tough Crypto Due Diligence Measures to Combat Money Laundering – CoinDesk
2024 Crypto Crime Trends: Illicit Activity Down as Scamming and Stolen Funds Fall, But Ransomware and Darknet Markets See Growth
Opinion: After a Sugar High of Free Money, These Billion-Dollar Technologies (Crypto) Need a Nap – The Wall Street Journal
Talking Crypto Custody With Anchorage CEO Nathan McCauley – Capitol Account
How Tether Products Can Benefit Emerging Economies – Tether