Category: Policy

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New Director of Digital Currency Security Proposed for State Department

McCaul and Meeks

As part the new “Russia Cryptocurrency Transparency Act” proposed by Rep. Gregory W. Meeks (D., NY) and Rep. Michael McCaul (R., TX), Chair and Ranking Member of the House Foreign Affairs Committee, a new role for the U.S. Department of State is being proposed by Congress in order to overcome any subversion of sanctions in the cryptocurrency markets by Russia due to its invasion of Ukraine.

The press release takes care to not condemn crypto at the outset and then pinpoints the heart of the matter:

“While the rise of digital assets like cryptocurrencies promise innovative financial opportunity, digital assets could be ripe for abuse as Russia seeks to evade the unprecedented sanctions the United States has imposed for Vladmir Putin’s brutal war of choice on Ukraine. This legislation will provide greater oversight over the State Department’s rewards program, helping ensure these hard-to-trace funds are not falling in the hands of bad actors.”

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Senators Lummis and Gillibrand Unveil New Digital Assets Legislation Partnership

Senator Kirsten Gillebrand (D., NY) and Senator Cynthia Lummis (R., WY)

Last Thursday, a live event burst into D.C.’s emerging post-covid reality as Politico produced,  “Regulating the Digital Gold Rush” sponsored by Grayscale at the Hotel Washington.

The one-hour event in front of 150-200 attendees did not disappoint and was highlighted by a new congressional crypto partnership between Senator Cynthia Lummis (R., Wyoming) and Senator Kirsten Gillebrand (D., New York). The senators presented hints on their coming digital assets legislation in a conversation with Politico reporters Sam Sutton and Ben Schreckinger.

Will this be the seminal bill desired by pro-crypto legislators and the blockchain industry? After President Joseph Biden’s crypto Executive Order two weeks ago, momentum is clearly building.

Notably contrasting the partisan rancor typical in the Capital city, the senators appeared synchronized – albeit with the sense that Sen. Gillibrand is still getting up to speed – across a wide-range of far-reaching digital asset talking points. Potential crypto-friendly regulation connected to the complexities of mining, effective use of energy in the crypto world as well as the de minimis $600 tax rule were singled out in addition to maintaining the United States leadership role in innovation.

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Tokenization, Synthetics and the Stock Market Explored at SXSW

Cake DeFi

Are Synthetics a Fad or Breakthrough for Finance?” at SXSW, Cake Defi Founder and CEO Julian Hosp did his best to bring clarity to many of the late-breaking developments in tokenization models across decentralized finance (DeFi) for an eager SXSW audience.

Were some in the audience from the SEC? Hard to say – but given the questions during the Q&A, lawyers were most assuredly in attendance.  Today, the decentralized finance services of Singapore-based Cake Defi (offering staking, liquidity mining and lending) are available everywhere but the U.S., according to Hosp. Yet, he believes the positive implications of decentralized finance go far beyond today’s stock investors and includes the possibility of reaching a global population with limited access to funds and technology.

One other important underlying theme running throughout the hour-long presentation: decentralized finance is about creating tokens that are not a security with its incumbent regulatory framework. This is the hill that DeFi is trying to climb. Given Cake Defi’s recent announcement of its very own venture arm with $100 million of capital, the race is on to grow the space.

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Financial Surveillance and a Crypto Society Meet at SXSW

Filecoin at SXSW

Blockchain technology and cryptocurrency were on full display at the recent SXSW festival in Austin, Texas. For the Filecoin Foundation-sponsored track last Tuesday, privacy was a key topic and included a panel discussion titled, “Financial Surveillance in a Cashless Society.”

AML (Anti-Money Laundering) and KYC (Know Your Customer) requirements are ever-growing in the cryptocurrency space especially as the new distributed ledger technology and traditional finance worlds continue to merge. So, where does privacy fit in? A standing-room only audience wanted to know.

Marta Belcher, general counsel of Protocol Labs and chair of Filecoin Foundation, offered some initial thoughts in a crypto context: “There is this myth that privacy is bad and that tools that enable privacy and anonymity are illegal or enable illegal activity. And I think that is fundamentally a very important misunderstanding. Privacy is absolutely critical to civil liberties, as is the ability to transact anonymously.” She pointed to the importance of anonymity as it related to participants in the the Hong Kong protests of 2019-2020 and their anonymous purchase of subway tickets to get to the gatherings.

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What Does An Executive Order on Digital Assets Look Like? Now We Know

State of the Union 2022

In today’s executive order delivered from the White House, U.S. President Joseph Biden revealed his government’s near-term plans for harnessing the world of cryptocurrency with its estimable culture of innovation and increasing need for a regulatory framework within the United States.

Though protecting the consumer and business remains front and center, the United States appears to be obliquely embracing the idea that in order to remain the leader of the free world, it must keep pace with technology – and the blockchain industry, specifically.

Biden’s order begins:

“By the authority vested in me as President by the Constitution and the laws of the United States of America, it is hereby ordered as follows:

Section 1.  Policy.  Advances in digital and distributed ledger technology for financial services have led to dramatic growth in markets for digital assets, with profound implications for the protection of consumers, investors, and businesses, including data privacy and security…”

Read the full order on the White House website here.

In a coordinated effort, other members of Biden’s cabinet chimed in shortly after release of the order including Secretary of State Antony Blinken who identified one of the blockchain industry’s key talking points – that the United States is in jeopardy of falling behind as the World’s leader in innovation.

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Blockchain Association Sees Challenges and Opportunity Ahead For Crypto at ETH Denver 2022

Kristin Smith of the Blockchain Association

Momentum in the blockchain and cryptocurrency industry was on full display as ETH Denver 2022 pulsed in the Mile High city last week. Among the Saturday slate’s many presentations, Blockchain Association executive director Kristin Smith explained the state of the industry from her perch as she helps manage industry connections to DC policymakers.  

To begin, in addition to her work around DC-focused industry communications, Smith sketched out the Association’s org chart which includes key members such as Jake Chervinsky, the organization’s head of policy in DC, and a lobbying team which interacts directly with government policymakers across regulatory and legislative functions. 

As for challenges the blockchain industry is encountering today, there are many according to Smith. She identified several recent developments while remaining sanguine about the industry’s prospects overall saying, ”As an industry and ecosystem we are in a really strong place in Washington and our political power is only growing. If we continue to work together in a coordinated way, I think the policies are going to work out just fine.”

A selection of the recent developments…

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