Posts

Posted on

Congress Reaches Out To Crypto Throngs at Consensus 2022

Congress at Consensus 2022

There may have never been a bigger moment in the confluence of blockchain technology and U.S. federal government policymaking as Congress came to the crypto throngs last Friday for a “Town Hall” at Consensus 2022 in Austin, Texas.

Seated from left to right were Senators Pat Toomey (R, PA), Kirsten Gillibrand (D, NY), Cynthia Lummis (R, WY) and Congressman Patrick McHenry (R, NYC) who acted as a team and appeared to be keenly interested in creating a relationship with the thousands in attendance. CoinDesk’s Jesse Hamilton moderated.

The new Lummis/Gillibrand “Responsible Financial Innovation Act” was the calling card in Austin, and clearly the Congressional members knew that a key constituency for helping create, refine and pass effective blockchain-related legislation in the years to come was seated before them. The congressional leaders also seemed to understand the audience’s skepticism about Congress and its ability to pass any helpful legislation quickly.

Senator Toomey, whose term ends this coming January, didn’t hesitate to stoke the fires of expediency at the outset by suggesting that stablecoin legislation – such as his – could be passed this year.

Concurring with the senator from Pennsylvania, Congressman McHenry said (lightly edited for clarity):

“The reason why we will be able to move on stablecoins is because there’s alignment around the essentials of asset-backed stablecoins. Algos (algorithmic stablecoins) are a different deal. But, asset-backed stablecoins – that regime is a very reasonable one for us to come to terms with (…). We’re about 50% aligned on the most extreme pieces of legislation here. And that’s pretty darn good for Washington. So then we can get into the finer points of some questions like: ‘Who’s the regulator?’ which are more preference issues than ideologies driving those conversations, but the need is there. And there is a understanding among Republicans and Democrats in the House and Senate on the basic things we need to do on stablecoins. We have to [build definitions on stablecoins and address] definitional issues around digital assets and the regulatory framework of the exchanges that they are on.”

McHenry added that the new Lummis/Gillibrand bill had moved the conversation forward.

Continue reading “Congress Reaches Out To Crypto Throngs at Consensus 2022”

Posted on

Senators Lummis and Gillibrand Introduce Responsible Financial Innovation Act (RFIA)

Responsible Financial Innovation Act

Like the finest porterhouse steak at Peter Luger’s, Senator Cynthia Lummis (R, WY) and Senator Kirsten Gillibrand (D, NY) formally delivered to the U.S. Senate yesterday their new, meaty, digital assets legislation titled, “Responsible Financial Innovation Act (RFIA).”

Is this steak a history in the making? The blockchain community appeared ravenous and ready to inhale it.

The scope of the bill is sweeping and mostly favors Commodity Futures Trading Commission (CFTC) jurisdiction versus the Securities and Exchange Commission (SEC) and therefore applies a commodities classification for many digital assets.

Blockchain Association’s Jake Chervinsky noted in a tweet yesterday that the CFTC leadership role in crypto in the new bill syncs with the House’s Digital Commodity Exchange Act (DCEA) efforts driven by the House Ag Committee and its Ranking Member Glenn Thompson (R, PA). Bi-partisan, bicameral ‘kumbaya’ reigns as Chervinsky pointed out. Similarly, Senator Gillibrand is on the Senate’s Ag Committee, Senator Lummis is on Banking.

From the medium post by Senators Lummis and Gillibrand: “Digital assets that meet the definition of a commodity, such as bitcoin or ether, which comprise more than half of digital asset market capitalization, will be regulated by the CFTC.” This has been never more clearly defined by the a U.S. government entity. But, if you have a security token, fear not, you’ll be in the SEC’s purview.

Overall, this bill sweeps into its pages many of the bills from both sides of Congress – such as the aforementioned DCEA – that have already been introduced including those around stablecoins and crypto tax guidance to name a few.

Definitions Continue reading “Senators Lummis and Gillibrand Introduce Responsible Financial Innovation Act (RFIA)”

Posted on

Top 16 Government Policy Discussions at Consensus 2022

Consensus 2022

Consensus 2022, one of the biggest blockchain conferences of them all, is taking place this week beginning June 9 through June 13 in Austin, Texas.  And, government policy topics will be centerstage with a wide-ranging roster of speakers joining the Coindesk-produced conference.

The full agenda is here.

Take our rankings with a grain of salt – it’s hard to know until you get there.  But here are 16 picks for key government policy discussions that we’re looking forward to at the show…

#1 – Washington’s Crypto Awakening: The Lawmaker Town Hall

Friday, June 10 – 2:40 PM – 3:30 PM CT

Participants:

    • Senator Cynthia Lummis (R, WY)
    • Senator Kirsten Gillibrand (D, NY)
    • Senator Pat Toomey (R, PA)
    • Congressman, Patrick McHenry (R, NC)
    • Jesse Hamilton, CoinDesk (moderator)

blockchain tipsheet tip: Promising a Town Hall inspires visions of bar stools and theater-in-the-round with audience participation. We’ll see what happens, but the lineup of 3 leading senators and a key congressman pushing blockchain legislation is impressive even if it’s by video link.

Senator Lummis and Senator Gillibrand will be appearing three days after their long-awaited June 7 introduction of their digital assets bill in the U.S. Senate. The two senators represent the krux of regulatory possibilities, which remarkably is not partisan (at this point): Sen. Lummis sits on the Senate Banking committee – with Ranking Member Senator Toomey – which oversees the Securities and Exchange Commission (SEC). And Senator Gillibrand is on the Senate Agriculture committee which oversees the U.S. Commodity Futures Trading Commission (CFTC).

Possible questions to pursue:

    • Should the SEC oversee cryptos or the CFTC -or is it a mix?
    • Realistically, when can a broad-based regulation passed by Congress? – it doesn’t feel like this year given the Fall election.
    • Where does Congressman McHenry’s interests in a separate digital assets regulatory body fit?
    • How might things change if McHenry becomes Ranking Member on the House Banking Committee should the House flip to Republicans in the Fall elections?
      On the stablecoin front, what the latest according to Senator Toomey?
    • Did Terra Luna damage policy momentum?
    • What’s Senator Toomey gonna do once his term ends in January – seems perfect for the blockchain lobby or venture capital?

#2 – CFTC’s Vision for Crypto Regulation Continue reading “Top 16 Government Policy Discussions at Consensus 2022”

Posted on

Will Senator Gillibrand Tell Governor Hochul to Veto Bitcoin Mining Bill This Week?

Gillibrand and Hochul

This is a big week for Governor Kathy Hochul and Senator Kirsten Gillibrand of New York as their proof-of-political-relationship will likely be tested by a proof-of-work (PoW) Bitcoin mining ban for crypto companies using fossil fuels in New York State.

For Governor Hochul, the ongoing Bitcoin mining battle in New York has been brought to her desk for signature as the state senate delivered an early Friday morning rebuke to crypto miners in the Empire state with approval of a 2-year moratorium (see the bill).

Will she sign or won’t she?  There is no indication yet. NY’s State Assembly approved the bill on April 26.

Meanwhile, this Tuesday June 7, Senator Gillibrand (D, NY) is expected to join with her Republican co-sponsor, Senator Cynthia Lummis (R, WY), on the most eagerly anticipated bill to ever be introduced in Congress on digital assets and their regulation.

New York Governor Kathy Hochul’s signature or veto must occur within 10 days (as of Friday morning, 6/3) according to legislative rules so that makes “zero hour” Monday, 6/13, at the latest. It seems hard to imagine Governor Hochul stealing Gillibrand’s thunder by signing or vetoing anything until after June 7.

In fact, a discussion is likely happening right now between Senator Gillibrand and Governor Hochul on timing – here’s a sample of their previous coordination and alignment in the past two years:
Continue reading “Will Senator Gillibrand Tell Governor Hochul to Veto Bitcoin Mining Bill This Week?”

Posted on

The Bi-Partisan Slay, SEC and CFTC Need Help, DC Versus Davos

DC Blockchain Summit

It was a remarkable week for the blockchain technology community last week: there were conferences where blockchain was top of mind, congressional and regulatory superstars were involved and engaged, and even some humble pie was served.

Let’s review.

The Bi-Partisan Slay

In a country starved for something-we-can-all-agree-upon, along comes blockchain technology guided by its community and successful in its appeal across gender, race and both sides of the U.S. Congressional aisle. In the process, and appearing in one conference, Congressmen Soto (D, FL) and Emmer (R, MN), Senators Lummis (R, WY) and Gillibrand (D, NY), and Senators Daines (R, MT) and Booker (D, NJ) have dashed to the blockchain rooftop like Santa’s strongest reindeer.

Slay…

Can you imagine this in 2017? How about 2020? Me neither. And yet it’s happening in 2022. The bi-partisan/non-partisan rhetoric achieved new heights at the DC Blockchain Summit with Senator Cory Booker saying emphatically that he sees an opportunity to close the wealth gap in minority communities with the growing blockchain technology industry.

This bipartisan, non-partisan thing is the secret sauce for the blockchain community.

DC vs Davos

Blockchain dollars flowed into Davos, Switzerland, and the World Economic Forum for its delayed annual gathering last week. Given the event’s unspoken positioning as a watering hole for global elites – Davos gives attending companies and organizations a branding element that says they’re global players, too.

Continue reading “The Bi-Partisan Slay, SEC and CFTC Need Help, DC Versus Davos”

Posted on

Not All Stablecoins Are Created Equal – Or Stable

Stablecoins

This week’s DC Blockchain Summit from the Chamber of Digital Commerce included a timely panel discussion on stablecoins given the recent Terra Luna stablecoin implosion as well as yesterday’s testimony in front of the House Financial Services Committee by Federal Reserve Vice Chairwoman Lael Brainard.

The Chairwoman was hopeful telling lawmakers that stablecoins and a central bank digital currency (CBDC) could provide a “safe” government-backed settlement layer and “would actually facilitate and enable private sector innovation.”

Panel participants for “Stablecoins and the Future of Money” included:

Are stablecoins innovative?

Moderator Stephen Palley of law firm Anderson Kill led things off by wondering aloud whether stablecoins are truly an innovation.

Caitlin Long, Founder and CEO of Custodia Bank and a well-known, Wyoming-based cryptocurrency advocate, began by saying that they are innovative but not truly crypto. She clarified: “They are not truly crypto in the sense that anything that touches the US dollar – so I’m talking about any sort of backed version of a stablecoin – ultimately has to clear through the Federal Reserve and therefore they’re not decentralized meaning they may be issued on blockchain-like rails, but they are not decentralized. They have an issuer and anything that has an issuer by my definition isn’t decentralized. Ergo, it is quasi-crypto, but not actually crypto.”

Continue reading “Not All Stablecoins Are Created Equal – Or Stable”

Posted on

SEC and CFTC Commissioners Reach Out To The Industry at DC Blockchain Summit

DC Blockchain Summit

A collegial chat between regulators from the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) highlighted an impressive day-long agenda attracting 850 attendees to the DC Blockchain Summit from the Chamber of Digital Commerce in Washington, D.C. yesterday.

The Chamber’s Annemarie Tierney didn’t hesitate in her moderation role in the morning session with the blockchain industry’s two most important regulatory bodies and immediately brought to the fore the key differences in jurisdiction between the two agencies – securities vs. commodities – and under which agency do the various tokens and cryptocurrencies land. Commissioner Hester Peirce of the SEC went first and repeated the gyst of her well-known views that do not necessarily sync with the rest of the SEC commissioners and its Chairman:

“A token [that] is sold as part of securities offering does not in my mind necessarily mean that the token continues on in its entire life to have to be treated as a security. That’s one of the areas where I’d like to see us provide more clarity. It has not been our standard practice over the years to identify what are security offerings and what aren’t. It’s pretty broad rules. And we expect that when people are out there raising capital, they comply with our initial offering rules, regardless of what it is. But that’s led to the treatment of certain things – securities offerings that you might not think the underlying object to be sold is [part of the securities offering]. So that’s the distinction – I would like us to deal with it better (…)”

CFTC Commissioner Christy Goldsmith Romero weighed in next saying that she agreed with her counterpart in the SEC on the overall need for greater clarity – particularly around that which is decentralized. Beyond the jurisdictional question, in order to help her create a regulatory framework, Goldsmith Romero appealed to the audience on educating her and the CFTC on how the blockchain community innovates and also protects consumers: Continue reading “SEC and CFTC Commissioners Reach Out To The Industry at DC Blockchain Summit”

Posted on

In Wake Of FASB Decision, Taxes And Compliance Take Centerstage With DeFi

IRS Taxes and Reporting

Tax reporting, compliance and DeFi, oh my!

Two weeks ago, The Financial Accounting Standards Board (FASB) agreed to take up a new review of accounting and disclosure standards for digital assets. The blockchain industry hailed it as a needed addition to FASB’s “technical agenda” and an indication of further acceptance of what the standards board calls “plain vanilla” cryptocurrencies – Bitcoin and Ether.

At last week’s Permissionless conference, Miles Fuller, a former IRS employee and current Head of Government Solutions for TaxBit, echoed industry frustration with today’s reporting standards saying in a discussion with Chamber of Digital Commerce’s Perianne Boring, “You need your balance sheet to be a full reflection of reality.”

As late as October 0f 2020, the not-for-profit accounting standards board, which guides all publicly traded companies such as digital asset holders Tesla and MicroStrategy, said that if the value of Bitcoin goes down, for example, a company must record the decrease in assets on its balance sheet on an annual basis. But if it goes up, the same companies only get to record a gain if the assets are sold.

TaxBit’s Fuller expanded the reporting pain point to the IRS and its intersection with decentralized finance (DeFi) noting how – as a former insider at the IRS – the agency was close to providing guidance to consumers on tax compliance with digital assets, but then Congress got in the way. Fuller added, “Sometimes I hear people put the onus on the IRS, but it’s Congress – the IRS is just trying to administer it.”

Continue reading “In Wake Of FASB Decision, Taxes And Compliance Take Centerstage With DeFi”