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Consensus – no Democrats
Democratic politicians were nowhere to be seen on CoinDesk’s Consensus stages last week as 15,000 attendees gathered in Austin according to organizers – arguably the world’s largest conference devoted to cryptocurrency.
The effects of FTX’s implosion and Sam Bankman-Fried’s malfeasance continue to ripple through the Democratic caucus.
Nevertheless, on Friday, Republicans attended as House Financial Services Chair Rep. Patrick McHenry (R, NC) joined (via Zoom) Senator Cynthia Lummis (R, WY) in a digital assets discussion at the conference. They both invoked the name of Senator Kirsten Gillibrand (D, NY) several times as the necessity of bipartisanship looms in a divided Congress.
Gillibrand’s co-sponsorship of the Responsible Financial Innovation Act (RFIA) – still not introduced in the 118th Congress – is something pro-crypto Republicans continue to hang their bipartisan “hat” on in the wake of FTX. Gillibrand reiterated her support of the legislation in an appearance at a Milken Institute conference in early March. But, a re-introduction of RFIA expected in mid-April has yet to materialize.
Consensus – legislation prospects
On stage, McHenry took the bait in answer to a question about whether there will be digital assets legislation signed by the President in the next 12 months. He answered without hesitation, “Yes.”
And then, he backpedaled a bit:
“Now, the odds of anything happening in Congress are low so it’s always a challenge to legislate something new into existence, and to legislate complicated policy, and to build up members understanding about the trade-offs necessary to make sound policy.”
McHenry continued, “So we have work to do, we’ve got serious work to do. But it is on the agenda in the House. And because I’m Chair of the committee, I can focus on an agenda and a timeframe. My agenda was, was frankly, three buckets:”
“One is to update data privacy standards.”
“The next was capital formation of how small businesses, large businesses, public and private raise money and opportunities investors happy to invest in new opportunities. That’s capital formation. That was my second bucket was focused on policy-wise.“
“And then my third is digital assets. Getting market structure and definition of digital assets and have a payment stablecoin regime. That’s my third bucket.“
“I’ve already reported out the first four months of Congress, my first two buckets and I’ve got a lot of runway to report out and have legislation that we can pass out of the house on market structure and and payment stablecoins. So I intend to do this and get this out of the House. I know the intense work that my friend [Sen. Lummis] has put in on the Senate side and some like-minded folks on the Senate side have put in to this effort.”
“But, I’m going to be able to produce a bill out of the House. I’m confident in that. And then, it’s going to be [Senator Lummis] and I and Senator [Kirsten] Gillibrand (D, NY) and a few others that are going to be hashing this thing out trying to drive sound policy through the Senate and marry it up with with our House bill.”
McHenry also stated that there will be “public hearings for the next couple of months” in addition to the previously-announced joint hearing on digital assets market structure of the Republican-controlled House Financial Services and House Agricultural Committees.
more tips:
In an ideal world, Consensus moves back to New York City. It should be near Wall Street. As of now, next year is planned for Austin again. Great town, no question about it. But, there’s a case that needs to be made with Wall Street which could in turn use its influence in DC to insure that the United States makes the most of innovative technologies.
anti-crypto army delayed
Blockworks’ Casey Wagner reports that there has been enough pushback on Senator Elizabeth Warren’s (D, MA) Digital Asset Anti-Money Laundering Act that its re-introduction in the 118th Congress has been delayed.
The bill includes bipartisan support from co-sponsor Senator Roger Marshall (R, KS). Wagner writes, “Industry members were expecting a revamped version of the bill to debut on the floor this week, but two insiders shared with Blockworks that the senators have delayed its reintroduction because they want to find more cosponsors.” Read about it.
Push back on the anti-crypto army? How this bill plays out – or doesn’t – could be indicative of the success Democrats will have with their “anti-crypto army” positioning which may inhibit any digital assets legislation in the 118th Congress.
Still, the Warren-Marshall bill is not dead. And one more implosion in the crypto ecosystem could breathe new momentum into the “army” and capture the desired co-sponsors. The timing of the bill’s introduction last December, a month after FTX’s downfall, was not coincidence.
anti-anti-crypto army
Also at Consensus last Friday, Blockchain Association Executive Director Kristin Smith made note of the delay on Warren’s bill in a discussion led by Paradigm policy professional Justin Slaughter.
Smith zoomed out on the wider implications:
“We’re at war against [SEC Chair] Gary Gensler and Elizabeth Warren. Elizabeth Warren has an ‘anti-crypto army.’ She is advertising on Twitter for her campaign that she has an ‘anti-crypto army.’ I think the good news is there’s also a “pro-crypto army” and it is groups like [Crypto Council of Innovation], like the Blockchain Association. It’s different funds that have policy professionals like Justin [Slaughter], it’s companies that have Washington offices.”
“If you add all of that up, we have a ‘pro crypto army’ on the ground in Washington every day, it’s an organized group and we’re making progress. And there’s a reason Elizabeth Warren has stalled her bill. That’s because she lost co sponsors. And that was because of the lobbying effort and the education effort that went on to stop that. So, we’re fighting – I don’t think this is a war that lasts forever, but we’re gonna probably be at war for the next 18 to 20 months.”
those crypto ads
Senator Kyrsten Sinema (I, AZ) has apparently had enough of current, digital assets advertising in her state (Arizona), so she rolled out a new bill to address the ads and truth in crypto advertising. Her co-sponsor for this bill is a familiar legislative partner, Senator Cynthia Lummis (R, WY). Politico reports on a Sinema statement, “The bill would aim to ensure ‘accurate advertising and clear disclosures on crypto products, so Arizonans can make the best decisions about their futures.'”
“Message” bill received.
This isn’t the first time Sen. Sinema has dabbled in digital assets legislation. Last year included her de minimis exemption bill – Virtual Currency Tax Fairness Act – with Senator Pat Toomey (R, PA). And, she was a co-sponsor of the bill providing a fix for digital asset-related tax reporting irregularities in the 2021 Jobs Act bill which was floated last August – the bill also included Senator Lummis as a co-sponsor.
more tips:
S.1357 – A bill to address advertising by digital asset intermediaries, and for other purposes. – congress.gov
FINRA on crypto
A new study released by FINRA’s (Financial Industry Regulatory Authority) Investor Education Foundation in April uses data from 2022 and delivers insights on investors at the time. I mean.. that was five months ago! But when, the influential self-regulatory organization (SRO) speaks, finance listens.
FINRA notes that when investors were “asked why they opened a new investment account or purchased cryptocurrency for the first time, 2022 New Account Investors and 2022 New Cryptocurrency Investors both cited the ability to invest with small amounts as an important driver. They also expressed a consistent level of ‘fear of missing out’ (or FOMO) on a potentially lucrative investment opportunity.” Read more on CNBC.
more tips:
New Investors 2022: Entering the Market in Novel and Traditional Ways (PDF) – FINRA
see more tips
Crypto-Friendly Lender Cross River Bank Criticized by FDIC – The Wall Street Journal
How Jack Dorsey’s Bitcoin Legal Defense Fund is fighting for the future of open source software – TechCrunch
Circle CEO warns of active and accelerating de-dollarization – CoinTelegraph
Crypto Cash Is Powering Kyrsten Sinema’s Re-election Campaign – The Intercept
‘Robin Hood’ hacker steals rich Russian crypto funds, gives to poor Ukraine – Yahoo News
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