Tag: digital assets

markup moving

The long-awaited markup of the stablecoin and market structure bills by the House Financial Services Committee will been moved as Politico’s Eleanor Mueller reports, “staffers received another email Friday informing them that the markup would take place on July 26 instead.” Read a bit more.

Separately, Politico notes that House Agriculture Chair Glenn Thompson (R, PA) wants his committee to engage in a markup of the market structure bill “before August recess.” Republicans are hoping they can get more Democratic support on the market structure bill given last week’s Ripple/XRP decision, too, says the publication.

global regulations

The Financial Stability Board (FSB) announced yesterday that it has finalized its “global regulatory framework for crypto-asset activities.” Get it.

As Cointelegraph notes, “The framework consists of two distinct sets of recommendations: ‘High-level recommendations for the regulation, supervision and oversight of crypto-asset activities and markets;’ and ‘Revised high-level recommendations for the regulation, supervision, and oversight of “global stablecoin” arrangements.'” Read more.

The FSB’s framework has likely had plenty of U.S. input from the FSB’s three U.S. board members: the Federal Reserve Vice Chair Michael Barr, Securities and Exchange Commission (SEC) Chair Gary Gensler and Treasury Undersecretary Nellie Liang. Continue reading “Markup Moving For Stablecoin, Market Structure Bills; FSB Finalizes Crypto Framework”

Ripple – market structure bill

A statement late Friday from House Agriculture Committee Chair Glenn “GT” Thompson (R, PA), and House Financial Services (HFS) Committee Chair Patrick McHenry (R, NC) said that the Ripple ruling meant digital assets regulation – beginning with legislation from Congress – was needed more than ever.

From their statement: “‘This decision underscores the need for Congress to provide clear rules of the road for the digital asset ecosystem—it’s misguided to think otherwise,’ said the [two] lawmakers. The ruling gives large institutional investors greater protections than everyday Americans. Outcomes like this are what happens when regulators force courts to make policy instead of Congress. Our comprehensive market structure legislation will give all investors, customers, and market participants the same longstanding protections found in traditional financial markets.” Read the entire statement.

Later, the Republican statement looked to claim the partisan high ground, “The decision also recognizes what Republicans have said all along: there is a limit to the SEC’s reach.”

To be sure, some Democrats, such as Senator Kirsten Gillibrand (D, NY), Rep. Ritchie Torres and Rep. Josh Gottheimer (D, NJ), to name a few, might also claim this high ground with their own various SEC criticisms. It will be curious to see if or how the Biden Administration and, therefore, Democratic leadership adjust their digital assets position.

Ripple – SEC future

The impact of the Ripple ruling on the SEC has generally been seen by the pro-digital assets community as a new dawn – pending appeals – for the agency and its digital assets approach. Unsurprisingly, Stu Alderoty, who is Ripple’s Chief Legal Officer told Politico late last week, “[The SEC’s] regulation-by-enforcement strategies that have crippled the crypto economy in the U.S. have been humbled by this decision.” Read it. Continue reading “Congress Reacts To Ripple XRP Decision; Coinbase Gets Support From District Court Judge”

big Ripple ruling

One of the standard-bearers among digital assets lawsuits is the Securities and Exchange Commission (SEC) battle with Ripple over its XRP token. Yesterday, a judge ruled that XRP was not a security in certain instances which could significantly change the dynamic for digital assets legislation in the United States. Read a summary from Decrypt.

And, read the  34-page order here (PDF).

CoinDesk, calling it a “partial win” for Ripple, summarized the court ruling and its effects: “The SEC’s motion for summary judgment was granted by the court as it applies to the institutional sale, and otherwise denied.” Read that one.

On that note, the SEC saw a bright side to the ruling and intimated the potential for an appeal in a statement: “We are pleased that the court found that XRP tokens were offered and sold by Ripple as investment contracts in violation of the securities laws in certain circumstances.” Read more about those circumstances in The Block.

House Majority Whip Rep. Tom Emmer (R, MN) immediately took to Twitter and said, perhaps with some relief, “The Ripple case is a monumental development in establishing that a token is separate and distinct from an investment contract it may or may not be part of. Now, let’s make it law.”  Digital assets has been a significant part of the Republican legislative agenda in the U.S. House of Representatives in the 118th Congress.  Meanwhile, the digital assets industry has clearly been clobbered in the past year beginning with the implosions of Terra Luna and FTX and its related fraud as well as regulatory pressure.

Ripple CEO Brad Garlinghouse, who has led an unremitting campaign in defense of his company and the XRP token, quoted from the ruling on Twitter, “The most important part of this ruling: “XRP, as a digital token, is not in and of itself a ‘contract, transaction[,] or scheme’ that embodies the Howey requirements of an investment contract. This is a now a matter of law (not up for trial.).” Continue reading “Ripple Ruling Celebrated By Majority Leader Emmer; Rep. Ritchie Torres Sees ‘Political Ploy’ With Prometheum”

Lummis-Gillibrand returns

At long last, the Lummis-Gillibrand Responsible Financial Innovation Act (RFIA) has been re-introduced. RFIA is a comprehensive bill for digital assets that, at the very least, continues the digital assets conversation on the Senate side of Congress in the 118th Congress.

Read the release. And, see the bill (PDF).

Senator Cynthia Lummis (R, WY) told CNBC’s Squawk Box (see the interview), “We need a regulatory framework that integrates crypto assets into our economy in a way that ensures consumer protection. This legislation is needed to protect consumers but also so there are rules for the road for companies.” In the interview, Lummis emphasized the need for consumer protections which is perhaps an effort to appeal to Democrats.

Senator Kirsten Gillibrand (D, NY) did not appear in the media other than the press release, but her co-sponsorship of the bill remains an important signal – a Democrat in the Democratically-controlled Senate – for the success of any crypto-related bills making it through the Senate. Gillibrand didn’t appear in the media when she co-sponsored Senator Tommy Tuberville’s (R, AL) “Prohibiting Foreign Adversary Interference in Cryptocurrency Markets Act” in early June, either. That bill addressed shortcomings which Senator Tuberville identified in the Prometheum license obtained through FINRA and the Securities and Exchange Commission (SEC).

Lummis-Gillibrand – what’s new

An 8-point “What’s New” document from the Senators sets the stage for what the 118th Congress version of RFIA entails.  As discussed in Senator Lummis’ TV interview, consumer protection leads, “The customer protection title of the bill is nearly double the size of the 2022 version, with added requirements on enforcement, mandatory proof of reserves, advertising, plain language customer agreements and a role for the Federal Trade Commission.” Download “What’s New.” Continue reading “Responsible Financial Innovation Act Reintroduced By Lummis-Gillibrand; Google Adds Digital Assets”

digital assets taxation

“In Letter to Stakeholders and Experts, Finance Leaders Seek Input to Address Uncertain Tax Treatment of Digital Assets” … so begins a press release from Senate Finance Committee Chairman Sen. Ron Wyden (D, OR) and Ranking Member Sen. Mike Crapo, (R, ID), who are attempting to address the need for proper taxation of digital assets beginning with feedback from the digital assets community and anyone else who cares to share. As evidenced by the detail of the release, this will be no small undertaking – just like most things in digital assets. Read it.

To breakdown where digital assets tax stands today, the Committee’s leaders asked the Joint Committee on Taxation (JCT) to compile a report on the taxation of digital assets – get the 24-page PDF here.

Jason Schwartz, a tax partner & digital assets co-head at law firm Fried-Frank, who also calls himself “Crypto Tax Guy,” quickly offered an analysis via a tweet thread examining each section of the Senators’ outline.

On wash sales, for example, Schwartz opined, “If you sell stock or bonds at a loss and buy back within 30 days, the tax loss is disallowed. The same rule doesn’t generally apply to crypto. Sound tax policy probably dictates that the wash sales apply to crypto in the same way they apply to stock & bonds.” Read the thread. Continue reading “Senate Finance Begins To Explore Digital Assets Taxation; DOJ Unveils DEX Fraud Arrest”

Prometheum – investigation

Senator Tommy Tuberville (R, AL) and 5 Republican members of the U.S. House of Representatives alleged yesterday that Prometheum co-founder and CEO Aaron Kaplan may have “provided false testimony” in front of a House Financial Services (HFS) Committee hearing on digital assets on June 13.

In a Congressional letter (see it here – PDF) addressed to U.S. Attorney General Merrick Garland and Securities and Exchange Commission (SEC) Chair Gary Gensler, the Congressional group asks for an investigation into whether or not a China-based investor named Shanghai Wangxiang Blockchain, Inc., was still supporting Prometheum well beyond the end of the 2019 time period Kaplan had suggested in written HFS testimony on June 13. “Wangxiang” as it is known is believed to have connections to the Chinese Communist Party (CCP). The Congressional Members point to Prometheum’s SEC filings which admit to Wangxiang’s continued involvement with the company’s platform beyond 2019.

CoinDesk notes that Wangxiang has a 20% stake in Prometheum today which Kaplan has admitted previously to the SEC.

FINRA, The FBI and the Director of National Intelligence are all cc’d on yesterday’s letter.

more tips:

(Opinion) U.S. Sen. Tommy Tuberville: It’s past time for the DOJ and the SEC to investigate Prometheum’s ties to China – 1819 News
Continue reading “Republicans Request Prometheum Investigation; Bipartisan Support Grows?”

getting swallowed

In another story inspired by recent Bitcoin Spot ETF filings such as BlackRock’s, traditional finance is stepping up its interest in crypto. Matthew Sigel, a digital assets researcher at fund manager VanEck, tells The Washington Post, “Assets often move from weak hands to strong hands during bear markets. We think that’s what is happening in crypto. A lot of losses last year were taken by retail or immature players, and now here come the big boys” of traditional finance. Crypto pledged to dethrone Wall Street. It’s getting swallowed instead.” Read more.

Little hope is given to companies like Coinbase in the article.

former Chairs framework

In an op-ed on Friday hopefully titled, “A Path Forward for Regulating Crypto Markets,” former Republican Securities and Exchange Commission (SEC) Chair Jay Clayton, a Republican, and former Commodity Futures Trading Commission (CFTC) Chair Timothy Massad, a Democrat, combine forces to provide their own solution for a digital assets regulatory framework. Continue reading “Former SEC And CFTC Chairs On Digital Assets; How Big Is The Crypto Industry?”

distributed ledger finance

A new report is out from a group of U.S. financial services companies –  such as Citigroup Inc., HSBC, BNY Mellon and others regarding a “regulated liability network” (RLN) based on distributed ledger technology.

CoinDesk’s Jesse Hamilton distills the news, “Fitting somewhere in the middle of the debate between central bank digital currencies (CBDCs) and private stablecoins, the Federal Reserve Bank of New York’s New York Innovation Center (NYIC), which has collaborated on the project since last year, concluded that “the network has the potential to deliver improvements in the processing of wholesale payments due to its ability to synchronize U.S. dollar-denominated payments and facilitate settlement on a near-real time, 24 hours a day, 7 days a week basis.”  Read more from CoinDesk.

more tips:

Regulated Liability Network U.S. Proof of Concept Findings – rlnuspoc.org

Research Study Examines Feasibility of Theoretical Payments System Designed to Facilitate and Settle Digital Asset Transactions – Federal Reserve Bank of New York Continue reading “Regulated Liability Network Meets Blockchain; July 19 Is HFS Markup For Crypto Bills”