WSJ Editorial Board Urges SEC To Police Fraud; Decentralization For Policymakers

WSJ editorial board

Inspired by the conclusion of the trial of former FTX co-founder and CEO Sam Bankman-Fried, the Wall Street Journal editorial board unleashed an Op-Ed late Friday suggesting new digital assets regulation isn’t needed from Congress when it comes to fraud. The board accuses Securities and Exchange Commission (SEC) Chair Gary Gensler of overlooking FTX and says, “Note to Chairman Gary Gensler: The [SEC] doesn’t need to regulate crypto markets to police malfeasance.” Read the whole magilla.

what you should know: Chair Gensler and his SEC agenda has been known for its overreach among critics. Here, it’s underreach. The right-leaning publication’s editorial board has been a consistent critic of Chair Gensler, a Democrat.

quick tip – Plenty of public speaking this week in DC with FinTech Week and SIFMA‘s Annual Meeting among highlights.

Dem lobbyist weighs in

Also in the wake of Bankman-Fried’s conviction on Thursday, Better Markets Dennis Kelleher (a member of Biden 2020 transition team along with SEC Chair Gary Gensler) tells the Associated Press, “There is no need for any special interest crypto legislation which would only legitimize an industry that is used by speculators, financial predators, and criminals.” Read more. The article argues that Congress has not been eager to regulate crypto.

what you should know: A more accurate description could be that Democratic leadership (including Kelleher and Better Markets) along with the The White House do not have interest in digital assets regulation that brings it within the umbrella of the U.S. financial system.

decentralization Q&A

Cap Hill Crypto’s George Leonardo, a former Hill staffer and attorney, reaches out to policy executive Rashan Colbert, a former staffer for Sen. Cory Booker (D, NJ), and asks Colbert to walk through – step by step – his new firm dYdX, how it works and how U.S. policymakers should address decentralization. Colbert says in part, “Decentralization comes with a particular set of benefits and trade-offs that should be adequately considered when interacting with decentralized networks, or when crafting policies that will govern them.” Read the informative Q&A.

what you should know:  Regarding the GAO announcement on Staff Accounting Bulletin (SAB 121), also read Leonardo’s breakdown last week in the newsletter. He writes, “…if a court were to agree with GAO’s finding that SAB 121 is a ‘rule’ under the APA, it could set aside SAB 121 because the SEC did not follow the APA’s notice and comment procedural requirements when issuing the bulletin.” Cap Hill Crypto’s newsletter sign up is here.

quick tip – “Sam Bankman-Fried Verdict Reflects Crypto’s Broken Dreams”: a bleak look – WSJ

postponed (hearing)

A classified hearing for this coming Wednesday was quickly pulled by the House Financial Services Committee on Friday. “POSTPONED: A Review of Our Sanctions Regime and Efforts to Combat Terrorist Financing.” No reason was provided in the press release.

Meanwhile, pro-crypto advocates in the House remain busy. Chair Patrick McHenry (R, NC) spoke out in favor of bipartisan funding support for Israel. And HFS Committee member and House Majority Whip Tom Emmer (R, MN) said on X on Saturday, “House Republicans are reviving the appropriations process for the first time in more than a decade, with 7 out of 12 bills passed so far.”

what you should know: A potential government shutdown looms mid-month, and a new Speaker of the House is navigating a way forward. Where digital assets legislation (stablecoins, market structure) fits remains to be seen. Perhaps, it’s postponed?

quick tip – “Opinion: A Tale of 2 SEC Commissioners”: Gary Gensler and Hester Peirce – Rodrigo Seira, Paradigm, on CoinDesk

CFTC meeting

Beginning at 9 a.m. ET today, Commissioner Caroline Pham of the Commodity Futures Trading Commission (CFTC) is convening another session of her Global Markets Advisory Committee (GMAC), which helps connect industry to the Commission on matters such as markets, competition and regulation.

what you should know: TradFi representing… GMAC’s Digital Asset Markets Subcommittee members Caroline Butler, Global Head of Digital Assets, BNY Mellon and Sandy Kaul, SVP, Franklin Templeton will provide an update on their subcommittee’s work at 11:42 a.m. See agenda.

quick tip: Treasury Designates Virtual Currency Money Launderer for Russian Elites and Cybercriminals –

article analytics

Inspired by crypto venture investor Nic Carter‘s “bounty” offers, a new Medium post from “@0xham3d_eth on X” has been published, “Tracking of Suspected Addresses in Elliptic & BitOK claims” and takes issue with the analytics of used in the October 10 WSJ article on terrorist financing and crypto. Read it.

what you should know: Like many things related to digital assets (and politics!), there is a sense that whatever the reality of the data of the Oct. 10 article is, and depending what side you’re already on, “you’re going to believe whatever you’re going to want to believe.”

still more tips

Solana’s Breakpoint 2023: Veep or House of Cards? How Washington Makes Decisions (video) – YouTube

“I think [crypto] is the biggest financial mania of modern times.” – Zeke Faux of Bloomberg News on the Masters in Business podcast

OpenSea Slashes NFT Marketplace Staff by 50% – Decrypt

Barry Silbert’s Digital Currency Group Hires Former Trump Impeachment Counsel – Bloomberg