Tag: cryptocurrency

Prometheum week

Prometheum co-CEO Aaron Kaplan let the world know in early February that his SEC-approved (with a “special purpose broker-dealer license) digital assets trading platform would likely roll out custody for Ether “security” tokens at the end of March. Well, here we are. And, Congress has left town. What a convenient moment for the SEC and its Chair Gary Gensler to nudge the little-known platform forward with its ETH “security” designation which would directly contradict the ETH “commodity” token overseen by the Commodity Futures Trading Commission (CFTC) and its Chair Rostin Behnam.

Both Behnam and Gensler are Democrats, but are representative of their caucus split when it comes to digital assets.

Generally speaking, Gensler is anti-crypto and seeks a strict securities agenda for digital assets whereas Behnam is pro-crypto and sees more nuance with digital assets beginning with unequivocal support for Bitcoin AND Ether as commodity tokens.

An early March House Agriculture Committee CFTC Oversight hearing led to a choreographed exchange between House Ag Chair Glenn “GT” Thompson (R, PA) and Chair Behnam which sounded the alarm that a Prometheum securities designation for Ether would bollocks up the works of the CFTC where it treats the token as a commodity.

So the question this week – the last week of March – is.. will Prometheum roll out its ETH security token custody? And also.. who will be the first client? Continue reading “Ether The Security May Debut This Week; House Republican Margin Complicates Crypto Bills”

Redcoats are coming

At Blockworks’ Digital Assets Summit in London this week, Lord Chris Holmes, member of the UK House of Lords, was quoted as saying, “We have such an opportunity in the UK because we’ve seen what’s happening in the [European Union]…and indeed to a large extent what isn’t happening in the United States.” Cheeky! Blockworks’ Casey Wagner reports that British pols were clearly feeling the moment. Even the conference itself, originally scheduled for Washington D.C., was taking place in the UK. Read more.

what you should know: The British didn’t do well the last time they challenged us. But, we didn’t sit on our hands either.

divided government, agencies

In Tony Edward’s Thinking Crypto podcast, former Commodity Futures Trading Commission (CFTC) Chair Chris Giancarlo (R) responds to talk that the Securities and Exchange Commission (SEC) and CFTC are disagreeing about whether Ether is a security and commodity. Giancarlo says: “Let me say this… Thank goodness for the CFTC for the past 5 or 6 years because if the CFTC were not there holding the flame for innovation, we would only have the SEC and its relative indifference/antipathy/hostility to digital asset innovation.”

He continues: “Our founders of the United States – right or wrong – they very much believed in divided government. They felt that if government were arguing with itself, then our liberties would be safe. In a similar kind of way, that’s played out between the SEC and the CFTC. (…) But for it, we might have had a majority view coming out of the SEC dominating their approach to this…” Listen here. Continue reading “UK Lawmaker Gloats As US Awaits Digital Assets Framework; Divided Government, Agencies”

Coinbase event – Chair McHenry

In Washington D.C. yesterday, Coinbase convened “Update The System” policy summit with the promise of showing policymakers use cases for crypto -or “onchain” as the company is promoting.

Republican House Financial Service Chair Patrick McHenry (R, NC) offered his input again on whether or not digital assets legislations could see the light of day in the remaining months of the 118th Congress. As he was at Tuesday’s Punchbowl News event, McHenry was guardedly optimistic on stablecoin legislation with the current plan including riding along “must-pass” legislation before the end of the year (presumably before the August recess).

McHenry told Coinbase’s policy chief Kara Calvert about the stablecoin possibilities (lightly edited for clarity):

“We need a legislative vehicle, we need a deadline. We can drive the stickier issues if we have a deadline. And so… ‘are we going to have legislative vehicles to get signed into law?’ I think that those chances have increased once we fund the government, which gives us the opportunity to land a product like a stablecoin bill. If we’re given that deadline. I do think there’s goodwill enough to to answer the President’s Executive Order on a need for a federal stablecoin legislation and further the work that Ranking Member [Maxine] Waters (D, CA) and I have been have been about for the last 20 months – we and our teams.”

McHenry explained his public view on why its taken so long to get a House floor vote on digital assets legislation:

“When I designed this plan, I didn’t anticipate that we were going to have the motion to vacate the Speaker in the fall…. that I would end up in the Speaker’s chair for three weeks…. all these various things that blew up the end of the year where I thought we’re gonna move our products. I didn’t anticipate the final four months of the year getting so jacked up – which they got very jacked up. And then it’s taken us three months to get our footing back. In those seven months, that’s when I wanted to have all of our actions taken care of.”

more tips:

• • Key U.S. Lawmaker McHenry Says House Has ‘Workable’ Stablecoin Bill – CoinDesk

what you should know: Given the House Floor vote plan, will a House Floor vote only take place for the must-pass on which the stablecoin bill will ride and/or will there be a separate vote on the stablecoin bill and digital asset market structure bills, for example? The value of a House Floor vote on the specific legislation such as stablecoins will be to reveal individual member support -or not. And, lurking in the reeds will be vigilant crypto Super PAC funds for Member’s November campaigns -or their opponents. Continue reading “HFS Chair McHenry Warns SEC Chair Gensler; Ether Getting Closer Look By The SEC”

stablecoin legislation

Yesterday at Punchbowl News’ “The Summit: The Digital Payments Economy” event in Washington, D.C., House Financial Services (HFS) Chair Patrick McHenry (R, NC) appeared in conversation with Punchbowl’s Jake Sherman and hinted at the way forward for the digital payment topic of the hour: stablecoins.

Chair McHenry was not overly optimistic about passage of stablecoin legislation – such as his “Clarity For Payment Stablecoins Act” [H.R.4766] – in the 118th Congress and said, “… I think we’re at an inflection point where we can land this ‘plane’ this year.. this year. But we [need] the broader context of Congress to get us that opening _ a legislative vehicle…”

McHenry continued and referenced Sen. Kirsten Gillibrand’s (D, NY) help with stablecoin legislation saying, “…the architecture is very similar for all of us… I think we would know how to resolve if given a deadline, and a way to get through the process…”

what you should know: The help of the Senate in facilitating passage of a stablecoin bill was explicit by McHenry, but the help of House Speaker Mike Johnson (R, LA) is likely needed, too.

today’s hearing – sanctions

Today’s House Financial Services (HFS) Capital Markets Subcommittee Hearing titled, “SEC Overreach: Examining the Need for Reform” will begin at 10 a.m. ET in Rayburn House Office Building.

See witnesses and livestream here. Continue reading “McHenry Remains Guarded On Stablecoin Law Prospects; Today’s ‘SEC Overreach’ Hearing”

unprecedented sanctions

Fortune’s Leo Schwartz reported on X late yesterday that District Judge Robert Shelby, an Obama appointee, has sanctioned the SEC for a “gross abuse of power” in the DEBT Box lawsuit. Schwartz says Judge Shelby “found the agency misrepresented facts to obtain a restraining order against a Utah-based crypto firm.” Read more (subscription).

The Block notes that the SEC will have to pay DEBT Box’s legal costs and “sanctions.” But, is it all too little, too late for DEBT Box?

Retweeting the sanctions news, House Financial Services Chair Patrick McHenry (R, NC) didn’t hold back on X last night: “Chair [Gary] Gensler’s enforcement team’s egregious misconduct will have broad implications on SEC authority beyond his crypto crusade. Gensler requested more funding for enforcement last year, now a judge calls out the SEC’s abusive and deceptive legal practices. This must end.”

what you should know: But, is it all too little, too late for DEBT Box? The company’s business was destroyed due to the Temporary Restraining Order (TRO) put on it at the request of the SEC and approved by the Court. The biggest ramifications may be the political calculus going forward between Chair Gensler and Democratic leadership. Do they soften their digital assets stance?  The rumored April HFS oversight meeting with Chair Gensler ought to be good theater.

SEC overreach

A House Financial Services (HFS) Capital Markets Subcommittee hearing tomorrow titled, “SEC Overreach: Examining the Need for Reform” will be something to keep an eye on even though the focus is not digital assets, specifically. But, the just-announced DEBT Box outcome will no doubt be top-of-mind.

Overall, the House majority Republicans appear to be upping the ante against the SEC and its Chair Gary Gensler at the hearing with 12 new bills and another joint resolution devoted to reining in the securities agency. From the hearing memo: “This hearing will examine Chair Gensler’s approach to policymaking at the SEC, which has sparked significant concerns.”

See the hearing page. And, read the Committee Memorandum.

The list of witnesses to appear in front of the Subcommittee and its Chair Ann Wagner (R, MO) will include the following at least (more to come… Better Markets from Dem leadership, perhaps?): Jennifer Schulp, Director of Financial Regulation Studies, Cato Institute; David Burton, Senior Fellow, The Heritage Foundation; John Gulliver, Executive Director, Committee on Capital Markets Regulation.

what you should know: Last month, a Joint Resolution [H.J.R.109] rescinding the Securities and Exchange Commission’s (SEC) SAB 121 made it successfully out of an HFS markup with bipartisan support and rebuked the SEC for its overreach when it comes to crypto custody for traditional financial firms. A House Floor vote is next for the resolution as well as progress in the Senate. Continue reading “SEC Cited For Abuse Of Power In DEBT Box Case; Fed Chair Bitcoin”

was “crypto,” now “onchain”

On the Unchained podcast on Friday, host Laura Shin wisely noticed that her guest – Coinbase’s Jesse Pollak, who originally created his company’s Layer 2 blockchain Base – was using the term “onchain” rather than “crypto” in the course of their conversation on the latest Ethereum upgrade.

She asked him why “onchain” and not “crypto”? He replied in part (edited):

“(…) The thing that I think is really powerful is… instead of hearing ‘crypto’ or ‘web3’ and thinking about speculation, pump and dump and all of this legacy of the crypto industry that has really been driven by speculation for the last decade… people hear ‘onchain,’ they get to see it in a new light, they get to analogize it to ‘online’ – which is this thing that has transformed their lives over the last 20 years – and they see it first and foremost as a technology.

They say, ‘If I come onchain, I can earn more money for my business or I can cut out the middlemen who are taking my creative work and profiting off of it. Or I can play this new game that wasn’t previously possible, or I can collaborate and send money to anyone in the world instantly and for free….

Those are not about speculation, it’s not about making more money, it’s about taking a technology and making your life better. I think that is the theme of onchain – it’s about upgrading our systems.

It’s about acknowledging that a lot of the stuff we’ve been doing with money is built on systems that are 50-100 years old. And if we use technology, software, blockchains to build new experiences and to bring the world onchain, we actually make everyone’s life better.

(…) Our mantra for the industry is that it’s time for change. And it’s time for us to embrace this new language – the language of ‘onchain’ – that really centers crypto as a technology change that is upgrading our systems to make the world a better place.”

more tips:

• • “How Ethereum’s Dencun upgrade could lead to the rise of millions of Layer 3s” (podcast) – Unchained

what you should know: In addition to a mantra, Pollak’s response could be the leading edge of a maturation for an industry. For cynics, the view could be that Pollak’s serving another cupful of wishful crypto thinking. Continue reading “Moving From Crypto To Onchain Says Coinbase Exec; Campaigning for Crypto And 2024”

do not approve

A March 11 Congressional letter signed by Senator Jack Reed (D, RI), author of the CANSEE Act, and Senator Laphonza Butler (D, CA) expresses concern to Securities and Exchange Commission (SEC) Chair Gary Gensler about the recent approval of Bitcoin spot market Exchange Traded Products (ETPs) saying the Commission has provided “a green light for Wall Street to sell volatile cryptocurrency investments to ordinary Americans through their brokerage and retirement accounts.”

Since approval of the Bitcoin ETPs, the price of Bitcoin has doubled and poured fuel on the fire in regards to support for future crypto-backed products – such as an Ether ETP.

Going forward, the Senators tell Chair Gensler that the SEC “is under no obligation to approve such products, and given the risks, it should not do so.” Read it.

(h/t @Alexander Grieve)

more on terrorism, digital assets

Politico added more (or different) color to the use of crypto by the terrorist organization Hamas when comparing to a story reported on Wednesday by The Wall Street Journal.

Politico says the new letter from Treasury on crypto assets is from Deputy Treasury Secretary Wally Adeyemo and was sent to Senate Banking Chair Sherrod Brown (D, OH). The letter “warned of continuing concerns about the extent to which Hamas and other terrorist groups will turn to digital currency for financing.” Read a bit more.

more tips:

• • Politico also covers new findings by The Atlantic Council on global CBDC adoption. Read here, too.

Continue reading “Senators Reed And Bulter Say No New Crypto ETPs; The Crypto Registered Voter”

CFPB rule hearing

The House Financial Services (HFS) Subcommittee on Digital Assets, Financial Technology and Inclusion hearing led yesterday by Chair French Hill (R, AR) on the Consumer Finance Protection Bureau (CFPB) proposed rule on non-banks, i.e. payment apps.

At the hearing’s open, Chair Hill highlighted bipartisan concerns about the rule which he said could unnecessarily inhibit industry and innovation, limit consumer choice and, in general, is an overreach by the agency. Crypto and digital wallets are swept up in the rule.

See hearing video and witnesses’ prepared testimony.

Over the course of the hearing, of the five witnesses, only Professor Christopher Odinet from the University of Iowa supported the rule.

Chair Hill added in his opening remarks, “There is no doubt that this proposal will decrease incentives to innovate in the payments space and leave consumers encumbered with fewer firms from which to choose a payment method–that decreases competition.” Read the entire statement here.

However, Democratic leadership led by HFS Ranking Member Maxine Waters (D, CA) and Subcommittee Ranking Member Steven Lynch (D, MA) staked out its familiar position around consumer protections and fears of “Big Tech’s” undue influence and therefore supported the rule.

Crypto skeptic Rep. Brad Sherman (D, CA) proffered his support for the rule and connected it to the digital assets industry and lobbying. In the Q&A, Rep Sherman delivered some zingers to the lobbying community, “This initial pre-rule is long past due. I’ve been in this town for a long time, and I’ve snuck in at least once to ‘Lobbying 101″ secret classes. The rule is very simple. The teaching is simple…”

Sherman continued, “If the facts are on your side, argue the facts. If you’re on the side of good public policy, argue the public policy. And if the facts are against you and the public policies are against you, argue the procedure. That is mostly what we have here. People telling us that the procedure is somehow off now the most extreme of those arguments is to have the cryptocurrency industry come in and say how god-awful outrageous it is that somebody would treat crypto as a currency. If you aspire to be a currency you should aspire to be regulated like a currency.”

In addition to all HFS Republicans expressing concern during the hearing, a January 5 letter (see it) showed seven HFS Democrats who have their own reservations including Rep. Jim Himes (D, CT), Rep. Josh Gottheimer (D, NJ) and Rep. Wiley Nickel (D, NC). Continue reading “New Treasury Report On Hamas, Crypto; Digital Assets Hearing Sees Bipartisan CFPB Rule Concerns”