Negotiations Over Digital Assets Legislation Intensify On The Hill; New HFS Subcommittee Hearing

‘horse trading’ begins

Punchbowl News’ Brenden Pedersen reported on X yesterday that “Rep. Patrick McHenry (R-NC) has threatened to block the bipartisan FEND Off Fentanyl Act’s inclusion from the annual defense package if leading House crypto legislation isn’t included.” Sen. Chuck Schumer (D, NY) “flagged” McHenry’s threat in a lunch with Senate Democrats yesterday, according to Pedersen.

more tips:

“Inside Patrick McHenry’s crypto scramble – The North Carolina Republican has made crypto his top priority as chair of the HFS Committee” – Politico

what you should know: Is it the stablecoin bill? Digital asset market structure bill? Both? “Ask for a lot, get a little” may be McHenry’s negotiation strategy. Pedersen promised updates… The digital assets Anti-Money-Laundering (AML) amendment in the NDAA could enter the mix, too. Read more on X from Politico’s Eleanor Mueller.

horse trading – Treasury

Deputy Treasury Secretary Wally Adeyemo has sent a letter to leaders of the Senate Banking and House Financial Services Committees asking for more power for his agency when it comes to digital assets. Politico’s Sam Sutton reports, “The letter, along with an accompanying term sheet with legislative proposals, marks a significant development in efforts to subject digital asset firms to the same anti-money laundering rules that apply to banks, asset managers and other traditional Wall Street institutions.” Read more.

what you should know: More “horse trading” from Democratic leadership and The White House.

digital assets hearing

Tailor-made for members of the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) among others, House Financial Services (HFS) Chair Patrick McHenry (R, NC) announced a new hearing for the Subcommittee on Digital Assets, Financial Technology and Inclusion. Titled, “Fostering Financial Innovation: How Agencies Can Leverage Technology to Shape the Future of Financial Services.” The hearing will take place next Tuesday, December 5, 10:00 a.m. in Rayburn. See the hearing page.

what you should know: Though not directly related to the HFS subcommittee hearing, CFTC Commissioner Caroline Pham‘s recent Global Markets Advisory Committee (GMAC) meeting set a high bar for how agencies can foster innovation. The November 6 meeting included an outline of five (5) work streams currently in motion among the 36 Digital Assets Markets Subcommittee members from across traditional finance and digital asset companies. See a slide (JPG).

NatSec lobby

As part of its effort to highlight the involvement of former U.S. military and government working in the blockchain industry, Blockchain Association said signors of a recent national security letter to lawmakers connected with Members and their staffs on Capitol Hill yesterday.  See them on the Capitol steps on X.  Today is Day 1 of the industry association’s Policy Summit.

more tips:

Crypto could benefit from an influx of Chinese money, Arthur Hayes says – The Block

X marks the spot

“I have in my grubby little paws the latest proposal, dated from today, that Treasury has sent to the Senate Banking committee, and boy, do I have thoughts. (…) Overall grade: F” – Austin Campbell on X

“KUDOS to the Federal Reserve Board for creating exam guidance w/r/t crypto-asset activities. They are the only federal banking regulator to do so. Creation of a mechanism to examine bank’s crypto activities is a prerequisite to allowing any bank to do them.” – Zach Wong on X

no legislation needed

Los Angeles Times business columnist Michael Hitzik says that November has been a “cruel” month for the crypto throngs and deservedly so, he believes.  Beginning with Sam Bankman-Fried’s conviction to Kraken‘s charges to the settlement of the case(s) against Binance, Hitzik sees an industry that is better left alone, or more to the point, left for dead. He wrote, “No new rules are needed, because to cite Ecclesiastes: When it comes to financial crime, as in all things, ‘there is nothing new under the sun.” All Hitzik sees is lobbying dollars at work in Congress and – citing data on CoinGecko – lists HFS Chair McHenry, Rep. Ro Khanna (D, CA), Sens. Chuck Schumer (D, NY), Ron Wyden of Oregon (D, OR) and Kirsten Gillibrand (D, NY) as beneficiaries.

still more tips

Gary Gensler has remade the SEC into a crypto nemesis and climate warrior. Now a backlash is brewing – Fortune (on Yahoo)

Grayscale Consumer and Culture Crypto Sector Summary – Grayscale

Coinbase Stock Is Soaring—What Does That Mean for Crypto? – Decrypt