Crypto And A Trump Administration; Bitcoin Spot ETF Countdown

Trump and crypto regulation

Politico’s Jasper Goodman explores what the effect on crypto legislation might be if Donald Trump is elected President in November. Goodman finds that – according to Republicans – “a second Trump administration would be a boon for crypto.” Given that digital assets legislation has been led by House Republicans lately, the argument makes sense. Read more.

But, Brad Garlinghouse, CEO of Ripple, would likely disagree with Republicans about the Trump “boon.” His company became embroiled in a lawsuit by the SEC that it has since won while former Chair Jay Clayton, a Republican, held sway in the waning days of the Trump Administration. Garlinghouse called Clayton a “hypocrite” on X over this CNBC interview in October.

what you should know: If a Republican takes over the White House, today’s noisy Republican congressional caucus will be much more deferential to a Republican SEC Chair as it was during the Trump Administration. The opportunity for sudden changes by a Republican SEC Chair are far from assured. However, if SEC Commissioner Hester Peirce (R), who has consistently supported innovation, were to become Chair, all bets are off.

Bitcoin ETF countdown

This may be the week!

The endless lead-up to the expected approval of Bitcoin spot market exchange traded funds (ETF) will hopefully draw to a conclusion this week with approval of up to seven applications. Georgetown University finance professor James Angel believes the Securities and Exchange Commission (SEC) has shot itself in the foot if it wanted to slow the crypto industry. He tells Capitol Account, “The SEC is unleashing the marketing might of the entire Wall Street – all at once. We are going to see the mother of all marketing battles. We’re going to see a lot of direct and indirect advertising.” Read more. (h/t @mud2monarch)

Meanwhile, Dennis Kelleher‘s Better Markets lobbying group didn’t give up hope on further delays for the ETFs.  In an 11-page “supplemental comment letter” to the SEC last week, Kelleher says it would be a “grave if not historic mistake” for approval of the Bitcoin ETFs. See it (PDF).

what you should know: Kelleher, a former member of the Biden Administration’s 2020 transition team which included SEC Chair Gary Gensler, has consistently issued support for all of the Administration’s financial market regulation plans -including crypto.

crypto taxes

Crypto miners and validators may be overwhelmed by a new 2021 Jobs Act stipulation which went “live” on January 1 and requires reporting for certain transactions over $10,000.  A letter last week by Cody Carbone of Chamber of Digital Commerce explains the specifics to Senate Finance Chair Sen. Ron Wyden (D, OR) and Ranking Member Mike Crapo (R, ID) as well as House Ways and Means Chair Jason Smith (R, MO) and Ranking Member Richard Neal (D, MA) –  see the letter.

Carbone says the need is more acute than ever for the Keep Innovation in America Act [H.R. 1414] introduced last March by House Financial Services (HFS) Chair Patrick McHenry (R, NC) and co-sponsored by Rep. Ritchie Torres (D, NY) among a bipartisan group of eleven Members of Congress.

Jerry Brito of industry policy organization Coin Center weighed in on X and said that the IRS can’t get rid of the law by itself – it needs Congress. But he added, “What I think the IRS may be able to do under its authority is make an announcement that it intends to forebear from enforcement until such time as they’ve provided an adequate way to comply.” Read the tweet on X. And, see his post on Coin Center.

this Wednesday

On Wednesday, the HFS Digital Assets, Financial Technology and Inclusion Subcommittee will take a look at the Financial Stability Oversight Council (FSOC), consisting of leaders of the U.S. financial system’s regulatory agencies. FSOC was a deliverable of Dodd-Frank in 2010 coming out of the Great Financial Crisis. The hearing called “Regulatory Whiplash: Examining the Impact of FSOC’s Ever-Changing Designation Framework on Innovation” will take place on Wednesday beginning at 2 p.m. ET.  See the hearing page.

what you should know: In October 2022, as part of the Biden Administration’s Executive Order on Digital Assets, FSOC responded with its gloomy “Report on Digital Asset Financial Stability Risks and Regulation.” Read it.

natsec and China

Michael Cameron, a staff member on the House Energy and Commerce Committee, spotted a proposal last week that was created in August and released in December by the Chinese Communist Party. Titled, “Proposal on Promoting the Development of Web3 Industry,” Cameron explains (courtesy of Google Translate) that the CCP Ministry sees “the opportunity to seize Web3” and has proposed four recommended next steps  begging with: “1 – Formulate a national blockchain strategy which focuses on NFTs and dApps…” Read the other three on X.

If you would like to translate the release yourself, Cameron provides a link here.

hacker haul

It was a good year, but not a great year if you were a North Korean crypto hacker.  Blockchain analytics firm TRM Labs says that according to its data, the North Koreans were able to bring in approximately $600 million in ill-gotten crypto gains in 2023 – down 30% from the year before. Assets are mostly swapped “for USDT or Tron and converted to hard currency using high-volume OTC brokers.” See the report.

more tips:

X users fed up with constant stream of malicious crypto ads – bleeping computer

what you should know: The glass-half-full take is that slowing momemtum for the DPRK might be a sign that law enforcement along with cybersecurity practices are catching up to the bad guys.

still more tips

The vision of trading digital securities cross border on public blockchain (December 22) – Ledger Insights

SALT and Kraken Partner to Launch Wyoming Blockchain Symposium in August – press release

Self-Custody & Policy – Ledger Interview – Cap Hill Crypto

Commissioner Goldsmith Romero Announces Agenda for January 8 Technology Advisory Committee Meeting on Artificial Intelligence, Cybersecurity, Decentralized Finance – CFTC.gov

Annual Crypto Trends Benchmark Survey – Bitwise

Nigeria’s Central Bank Fleshes Out New Rule Allowing Crypto Firms’ Access to Bank Accounts – CoinDesk