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New York – legislation
New York State Attorney General Letitia James (D) announced new legislation called “Crypto Regulation, Protection, Transparency, and Oversight (CRPTO) Act” on Friday. AG James said in the release, “Rampant fraud and dysfunction have become the hallmarks of cryptocurrency and it is time to bring law and order to the multi-billion-dollar industry.”
Three overall goals for the legislation are listed including “1) Stop Conflicts of Interest 2) Require Public Reporting of Financial Statements and 3) Bolster Investor Protections.” And there’s this: “The bill would also strengthen the New York State Department of Financial Services’ (NYDFS) regulatory authority of digital assets.” Next steps for the bill will include submission by the Office of the Attorney General “to the State Senate and Assembly for their consideration during the 2023 legislative session” which currently runs through June 8.
An impressive list of 25 different, supportive quotes from state Democratic politicians and special interests are included in the announcement and none more prominently than former NYDFS Superintendent, Maria Vullo. Vullo served as superintendent of the NYDFS from 2016 to 2019 and briefly ran for the Attorney General position in 2021 while James considered running for New York State governor. Vullo talks in the release about the need to “codify” the New York BitLicense – New York State’s digital assets framework.
Policy professional Justin Slaughter of Paradigm looks through the entire bill and delivers a comprehensive tweet thread here. He notes, “How the new legislation interacts with the BitLicense regime isn’t clear – the legislation doesn’t appear to mention it. Presumably this bill won’t pass without some discussion of how this either complements or replaces the BitLicense though.”
more tips:
The Bill: Legislative Bill Drafting Commission 10985-04-3 (PDF) – ag.ny.gov
New York – NYDFS
Notably absent in the release is current NYDFS Superintendent Adrienne Harris, also a Democrat, who has trumpeted her state’s digital assets regulatory framework and even made an appearance as a witness at the recent House Financial Services (HFS) stablecoin hearing on April 19 where she re-stated that crypto did not cause the recent banking collapse of Signature Bank.
In a statement about AG James’ new bill, The Wall Street Journal reported NYDFS “defended its record and the resources it has poured into its virtual currency unit, saying it was the ‘only prudential regulator with virtual asset-specific authority in the United States. It is DFS’s priority to ensure that consumers and markets are protected and New York continues to be the global financial center.'”
It would seem Harris’ views on the bill in the coming days will be something to watch. She’s an appointee of New York State Governor Kathy Hochul (D) – the governor James nearly ran against in 2022.
In two weeks, Superintendent Harris and New York State Assistant Attorney General Kenneth Polite are scheduled to appear at a New York City Bar Association event called “White Collar Crime Institute.” Agenda items include “Cryptocurrency Enforcement.” See it.
hearing Wednesday
On Friday, House Financial Services and House Agriculture Committees announced their joint hearing for this Wednesday, May 10. “The Future of Digital Assets: Measuring the Regulatory Gaps in the Digital Asset Markets” will start at 9:30 a.m. Visit the hearing’s event page.
The hearing is listed under the auspices of the HFS’ Subcommittee on Digital Assets, Financial Technology and Inclusion chaired by Rep. French Hill (R, AR), but also includes House Ag’s Commodity Markets, Digital Assets and Rural Development chaired by Rep. Dusty Johnson (R, SD). This hearing is the second wave of hearings on market structure after two separate hearings on April 27 led by the Republican majority.
Fox Business reporter Eleanor Terrett tweeted late Friday that witnesses for the May 10 hearing would include Andrew Durgee of Republic, Matthew Kulkin: former Director of the Commodity Futures Trading Commission’s (CFTC) Division of Swap Dealer and Intermediary Oversight; Dan Berkovitz, former Securities Exchange Commission (SEC) General Counsel and CFTC Commissioner; Marco Santori, Chief Legal Officer of crytocurrency platform Kraken; and finally, Daniel Schoenberger, Chief Legal Officer, Web3 Foundation.
Kennedy on digital assets
2024 Democratic presidential candidate Robert Kennedy Jr., apparently sees opportunity by supporting cryptocurrency in his upcoming campaign – a position the Biden Administration has increasingly opposed. Kennedy, who will keynote the Bitcoin 2023 conference in Miami in two weeks, came out against Central Bank Digital Currencies (CBDCs) last week – a stance popularized by Republicans to-date.
Kennedy tweeted a thread last Thursday about financial censorship and concluded, “That is why I oppose CBDCs, which will vastly magnify the government’s power to suffocate dissent by cutting off access to funds with a keystroke. That’s also why I support bitcoin, which allows people to conduct transactions free from government interference.” Read more.
more tips
Presidential Candidate Robert F. Kennedy Jr. in Conversation (2 hours) – All-In Podcast
see the bill
The text for “S. 1340 – Financial Technology Protection Act of 2023” introduced by Senator Ted Budd (R, NC) and co-sponsored by Senator Kirsten Gillibrand (D, NY) is now available on Congress.gov. See it.
Senator Budd introduced this legislation in the last Congress while a member of the House of Representatives. S. 1340 looks to create a Working Group that provides recommendations to Congress and regulators on how to combat criminals using fintech and cryptocurrencies.
still more tips
AI Is ‘Definitely the Talk of the Town,’ Coinbase CFO Says – Bloomberg
DOJ Probing Binance Over Possible Russian Sanctions Violations – The Information
“Crypto issues pop up increasingly in other committees of jurisdiction, and there are policy vectors to watch closely beyond the Banking and Ag committees. In this instance, Sen. Warren talking about her currently stalled validator KYC/AML bill in front of the Senate Armed Services Committee.” – Alexander Grieve on Twitter
Ethereum transaction fees at their highest since May 2022 amid memecoin mania – The Block
Pepecoin’s Bewildering Rise Turned a Pittance Into an Almost 5,000,000% Meme Coin Profit – CoinDesk
Crypto, influencers targeted in Kenya’s new tax bid – TechCrunch
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