Politico took the temperature of Members of Congress on whether or not they’re burning for digital assets legislation. In an article published yesterday, few surprises were elicited, but Rep. Bill Huizenga (R, MI) reiterated a commonly-held belief that – if not for FTX’s implosion – Democrats would be more publicly supportive of legislative efforts.
Rep. Jim Himes (D, CT), who supported the House Financial Services Committee’s stablecoin and digital asset market structure bills, is still worried about problems in the industry telling Politico: “I hear all these promises, but I say, ‘How is this going to change the neighborhood in St. Louis, or the state of Connecticut, or the United States?’ (…) To the average member, [they see] $2 trillion lost over time.” Read more.
SEC appeal denied
The Securities and Exchange Commission’s (SEC) attempt to appeal the Ripple decision has been denied. Fox Business’ Eleanor Terrett reported late yesterday, “[SEC’s motion] for leave to file an interlocutory appeal in the [Ripple] case has been DENIED… the SEC’s motion for certification of interlocutory appeal is DENIED, and the SEC’s request for a stay is DENIED as moot.” See more including the full decision here on X.
Blockworks summarizes the news saying in part, “The court did not find a ‘substantial ground for difference of opinion,’ [Judge Analisa] Torres wrote.” Read more.
U.S.-based Chainalysis, arguably the most well-known among blockchain analytics firms for unraveling fraud among crypto assets, announced that it was laying off 150 employees yesterday or about 15% of their workforce. In February, the company had reduced headcount by 5%. Forbes says the crypto bear market is having an impact: “This retreat has translated into dwindling trading revenue and blockchain activity, which reduces the need for Chainalysis products that help cryptocurrency exchanges and other companies identify illicit transactions and maintain regulatory compliance.” Read the article.
In downsizing, the company said it plans to focus on government contracts which currently account for 70% of its revenue according to Forbes.
Central banks in the European Union are on the verge of rolling a wholesale Central Bank Digital Currency (CBDC) according to European Central Bank (ECB policymaker) Francois Villeroy de Galhau at an event in Paris. CoinDesk covers the news and quotes de Galhau: “The Eurosystem has started exploring new technologies for the settlement of central bank money, including the issuance of a first type of tokenized CBDC. (…) The eligibility criteria and the call of interest will be published in the coming weeks and experiments will be rolled out over the course of next year, including trials with real transactions.” Read more in CoinDesk.
Yesterday, pivoting off the latest Sam Bankman-Fried trial news, the Republican House Financial Services X account blamed SEC Chair Gary Gensler for the impact to FTX customers and investors coming out of the FTX implosion last November. A tweet read: “SEC Chair Gary Gensler’s regulation by enforcement regime for digital assets failed to protect FTX’s investors and customers. Republicans are delivering legislative clarity that protects consumers and fosters innovation in the digital asset ecosystem.
Meanwhile, Better Markets, a financial markets lobbying group closely aligned with Democratic Party leadership, took issue with recent marketing from crypto platform Coinbase that says there are 52 million holders of crypto in the U.S. On X, Better Markets tweeted: “The [crypto] industry continues to make the false claim that 52 million Americans own crypto. That claim, based on a rigged crypto-purchased poll, is not true (…).” Read their argument on the Better Markets blog. Better Markets CEO Dennis Kelleher served on President Joseph Biden’s presidential transition review team along with SEC Chair Gary Gensler.
Coinbase currently has a marketing campaign titled “America Loves Crypto” where the threat to politicians is simple: “The Crypto Owner Is A Critical Voter.” See it.
The bigger question may be: how many crypto owners are single issue voters? A Coinbase spokesperson at the recent Mainnet event in New York City argued that even 1% of the 52 million can be impactful in an election.
Blockchain Association’s VP of Policy Jake Chervinsky said yesterday that he’s leaving the industry organization for early stage crypto investment firm Variant Fund and will become the fund’s Chief Legal Officer. Read more on X. And, in Fortune.
Amanda Fabiano, who was head of mining for crypto firm Galaxy Digital, also announced on X yesterday that she has left Galaxy to start her own consulting services company, Fabiano Consulting. She’ll be targeting crypto miners in her new practice, too.
ETH futures results
After its debut on Monday, the nine Ethereum futures ETFs (exchange-traded funds) have delivered an underwhelming performance with very little volume. In spite of the somnabulance, Bloomberg analyst Eric Balchunas said about the ETH ETF results on X, “I think for the crypto world, it would be dumb to get bummed about this *IF* you are long term investor, [you] should look at these ETFs as new bridges being built to a wider TradFi audience that will facilitate traffic over time vs say a quick trade opportunity IMO.”
IMF on crypto risk
In a new paper titled “Assessing Macrofinancial Risks from Crypto Assets” and released last Friday, International Monetary Fund authors Burcu Hacibedel and Hector Perez-Saiz see considerable risk with crypto assets but also their inevitable assimilation into the global financial system. They offer a risk monitoring solution: “In this paper, we introduce a conceptual macrofinancial framework to understand and track systemic risks stemming from crypto assets. Specifically, we propose a country-level Crypto-Risk Assessment Matrix (C-RAM) to summarize the main vulnerabilities, useful indicators, potential triggers and potential policy responses related to the crypto sector.” Download the paper here (PDF). And, Axios offers a summary here.
DC crypto event
CoinDesk’s “State of Crypto” event on October 24 in Washington, D.C., has continued to add speakers including some notable additions from the private sector such as Michael Greenwald, who is Global Lead for Digital Assets and Financial Innovation at Amazon Web Services, and Kimberly Johns, Global Head of Digital Assets Legal at Goldman Sachs. Many of the biggest supporters in Congress for digital assets legislation will be speaking, too, as will several Capitol Hill staffers. See the agenda.
A preview of the Sam Bankman-Fried trial – Molly White
Crypto Could Be a Mystery to Jurors in Bankman-Fried Case – The Wall Street Journal
‘Alameda Gap’ in Crypto Liquidity Persists With Bankman-Fried on Trial – Bloomberg
still more tips
UBS trials tokenized money market fund on Ethereum – Blockworks
Kenya panel urges shutdown of Worldcoin’s crypto project within country – Reuters
Google Cloud holds a 10,000-token stake in this blockchain network – The Street