Super Tuesday crypto
In a piece titled, “‘Playing politics to win’: Crypto spends big on Super Tuesday,” Politico’s Jasper Goodman brings together recent news about crypto PAC’s funding of pro-crypto candidates and efforts.
Goodman digs into Senate candidate Rep. Adam Schiff’s (D, CA) record and finds a nugget, “Schiff, who has never tweeted the word crypto or made it a focus as a House member, includes a section in his ‘affordability agenda’ that calls for ‘comprehensive regulatory frameworks’ that ensure crypto firms stay in the U.S.” Another pro-crypto Democrat for the Senate? Schiff is leading in the polls. Read more.
Arizona – fund managers, crypto
The Arizona State Senate has opened the door for fund managers in regards to crypto-backed investments within Individual Retirement Accounts (IRAs). Blockworks’ Casey Wagner reports on a resolution which seeks “to ‘encourage’ the Arizona State Retirement System (ASRS) and the Public Safety Personnel Retirement System (PSPRS) to monitor these new investment vehicles and consider adding exposure.”
And, see the “fact sheet” produced by the Arizona State Senate.
what you should know: The novelty of this type of legislative action speaks to how early this is in the evolution of digital assets.
CRS – prudential issues
A new Congressional Research Service report released last month takes a look at how traditional banks can participate in crypto today under the auspices of prudential regulators. Titled, “Federal Reserve: Policy Issues in the 118th Congress” devotes an entire section to the reality of TradFi’s participation in crypto today.
From the report, policy issues going forward included: “Are crypto activities inherently too risky for banks or BHCs to participate in, as evidenced by the failures of banks with crypto exposure in 2023? Are some types of crypto activities less risky or easier to regulate than others? Do crypto activities pose more risk to consumers and financial stability if they are inside or outside of the banking system? Would bringing crypto into the bank regulatory umbrella reduce risks or legitimize an industry that is inherently harmful to consumers and the economy?” And, there are more issues… a lot more.
The report is written by Marc Labonte, who also wrote this piece on FedNow in 2023.
Prometheum and regulation
“NEW: I recently reached out to the Securities Investor Protection Corporation (SIPC) regarding [Prometheum] and discovered another reason why [crypto] so badly needs legislation to figure out what its regulatory status is… SIPC will NOT cover Prometheum’s so-called ‘digital asset securities’ because they do not fall under SIPA’s definition of a security… ” Read more from Fox Business’ Eleanor Terrett on X yesterday
what you should know: Digital asset securities platform Prometheum continues to be a nuisance, at worst, for those seeking the thoughtful construction of a digital assets regulatory framework by Congress.
former Chair on regulation
Former Commodity Futures Trading Commission (CFTC) Chair Chris Giancarlo (R) is the featured guest on this week’s “Law of Code” podcast hosted by Jacob Robinson. Giancarlo remains a thought leader with current roles as senior counsel at Willkie Farr and as a member of the Board of Directors at the Digital Dollar Project.
On the podcast, he pleaded for patience from the pro-crypto crowd – the transformation brought about by digital assets isn’t going to happen overnight.
Giancarlo also defined the important role regulation will play: It should “allow the 99% of good people in every marketplace certainty to conduct their activities knowing that the 1% of bad actors will be taken out and sanctioned appropriately.” And, it should “never be value-based,” he said. Hear more.
today’s hearings
Federal Reserve Chair Jerome Powell joins the House Financial Services Committee for an oversight hearing beginning at 10 a.m. ET today. Live stream here.
CFTC Chair Rostin Behnam will participate in an oversight hearing with the House Agriculture Committee today at 10 a.m. ET. Live stream here.
Also, CFTC Commissioner Caroline Pham will hold a Global Markets Advisory Committee (GMAC) meeting which will include review of the committee’s digital asset initiatives. The meeting begins at 10 a.m. ET. Live stream and agenda details here.
Supreme Court future
Fortune’s Leo Schwartz reviews a ruling in Washington State in an insider trading case brought by the SEC against a Coinbase employee, his brother and a friend, Sameer Ramani, who is still on the lam.
A judge agreed to the SEC’s request for a default judgment against Ramani: “Judge Tana Lin ruled that the case fell under the SEC’s jurisdiction because the crypto assets at issue were securities, even though they were traded on Coinbase, a secondary market.” Fortune’s Schwartz sees this as support for SEC Chair Gary Gensler’s position on crypto (“crypto tokens are securities” other than Bitcoin) and creates the potential for a cascade of lower court rulings which will ultimately drive cases to the Supreme Court given Industry’s position. Read the article.
more tips:
Coinbase counters use of default judgment ruling in SEC lawsuit – The Block
number go up, down
Bitcoin’s Stunning Climb to New Records, Explained in Charts – The Wall Street Journal
Bitcoin Continues to Fall After Hitting All-Time High. Is This Fine? – Decrypt
opinion
Why Crypto Just Won’t Die – The Atlantic
How AI-Crypto Will Lead to a Hyper-Financialized Future – CoinDesk
still more tips
McHenry Testifies in Support of Expanding Access to Capital Act – financialservices.house.gov
Deutsche Börse launches regulated spot platform for crypto assets (Germany) – Deutsche Börse Group
US SEC further delays decision on BlackRock’s spot ethereum ETF – Reuters
VanEck’s new NFT platform SegMint highlights TradFi’s keen interest in Web3 tokenization – Cointelegraph
Cease and Desist Order For Crypto Platform ShapeShift AG – SEC.gov