Senate and SAB 121
With the House passing the joint resolution to rescind the SEC’s Staff Accounting Bulletin on Wednesday – with an unexpected 21 House Democrats joining the Majority Republicans – the ball is now in the Senate’s court.
Yesterday, Senator Cynthia Lummis (R, WY), who is guiding the Senate version of the resolution – S.J.Res.59, tweeted, “I am proud the House passed the bipartisan SAB 121 CRA led by [Rep. Mike Flood (R, NE)] and [Rep. Wiley Nickel (D, NC)]. We cannot allow the administration to regulate tools for financial freedom out of existence. Time for the Senate to swiftly overturn this misguided rule.” See the tweet.
what you should know: And swiftly they must. It appears possible that the “privileged” resolution could reach the Senate floor next week. Assuming Senate Republicans will unify and vote “no” as their colleagues did in the House, the difference of opinion on digital assets among Senate Democrats will be in full view. It will only take a few to put the resolution on the President’s desk.
will Biden veto?
Does President Biden use his veto power – as he threatened on Wednesday – on something as relatively small as rescinding SAB 121 which could potentially raise crypto up as even more of an issue in the 2024 general election?
The halcyon days of the Executive Order on Digital Assets of March 2022 have been replaced at the White House (FTX and Sam Bankman-Fried didn’t help) into defensive posturing, if not hostility, when it comes to crypto. Dem leadership appears to believe being “anti-crypto” is a winning issue in November. And the veto would make Democrats very publicly “own it.”
The case being made by the resolution’s proponents seems extremely logical even though it’s in the weeds for most Americans: let the highly regulated banking system custody crypto and thereby offer the safest custody alternative possible.
For many anti-crypto advocates, once you let crypto (even a smidge) under the U.S. financial umbrella, the war against crypto is lost.
the digital assets election
Crypto has become one of the most powerful forces in political donations. But will it impact the election? – Fortune on Yahoo
Crypto Is an Election Issue This Year. Is That a Good Thing? – CoinDesk
Trump embraces crypto
Former President Donald Trump made some eye opening remarks on crypto on Wednesday.
Speaking from Mar e Lago in Florida, his comments showed that he’s very aware of the White House’s crypto stance and that he will try to take advantage of it.
See the video of Trump’s remarks.
Here’s an excerpted transcript:
“The Democrats are very much against [crypto]. And I say this… a lot of people [are] very much for…. probably a lot of the people in this group. And I’m fine with it. I want to make sure it’s good and solid, everything else -but I’m good with it.
And if you want… if you like crypto in any form -but it comes in a lot of different forms – if you’re in favor of crypto, you better vote for Trump.”
Trump also made light of SEC Chair Gary Gensler’s involvement in the digital assets push-pull.
As Fox Business Eleanor Terrett noted, the former President has come out in support of Bitcoin before but never given a full embrace of “crypto” -until now.
what you should know: Messari’s Ryan Selkis, a pro-crypto advocate, entrepreneur and investor, also spoke in Mar e Lago -and Trump ended up making more comments. Selkis released the video late Wednesday night on X and prefaced it by tweeting, “Well… I didn’t expect to share that I was in Mar-a-Lago tonight, but President Trump spoke very highly about crypto and then…invited me and [Polygon founder Mihailo Bjelic] on stage to say a few words.” Selkis added, “Fight for crypto. Support President Trump.” See the video.
Behnam: Congress, please help
Politico caught up with Commodity Futures Trading Commission Chair Rostin Behnam this week. Among other issues, Behnam discussed the need for digital assets regulation saying, “You never necessarily get to where you want to go, but you have to build a foundation, right?… Ultimately, we built a narrative, we demonstrated to the world, not just to the U.S., what the CFTC is capable of, but also where our hands are tied and what needs to change in order to fill this gap to protect investors and to move the country forward.”
He continues to want Congress to act. Read much more.
Today, the Chair will preside over an open meeting of the Commission beginning at 10 a.m. ET. More info here.
what you should know: Ever since the Digital Commodity Consumer Protection Act (DCCPA) was abandoned, he’s been stuck when it comes to crypto.
SEC stalls crypto listing
Yesterday, the SEC made a surprise last-minute decision to delay the public listing on the New York Stock Exchange’s American exchange of Exodus, which allows users to manage their crypto from their desktop using a self-custody wallet.
According to the company, the SEC said it wanted to review its registration statement which had previously been approved.
Exodus CEO JP Richardson said in a statement, “While we are surprised and confused by this last-minute decision, we remain hopeful that the SEC will follow through on its commitment to treat us as the law intends…” Read the release.
Consensys counsel Bill Hughes tweeted on X about the delay, “It would be hard to overstate how important this is for the peer-to-peer blockchain software industry in the US. If Exodus gets to list, that is a really big deal. Watch the SEC pull the rug.”
what you should know: The Biden Administration may be reaching new levels of effort when it comes to trying to stop digital assets. Much like Robinhood’s unsuccessful attempt at getting a digital assets product registered with the SEC (see their compliance officer’s comments at a June 2023 House Agriculture hearing), Exodus may be another example of “Hotel California” at the SEC: “You can try to register, but you won’t ever leave with approval” if you’re a digital assets company or product.
[guitar riff here]
still more tips
JP Morgan explains why it prefers Unified Ledger over public blockchain for tokenization – Ledger Insights
Speech: “Adam Smith, the SEC, Data, and the Public Good” Prepared Remarks Before the 11th Annual Conference on Financial Market Regulation” by Chair Gary Gensler – SEC.gov
What Does It Mean to be a Top VIP Trader at Binance? – The Wall Street Journal