Tag: tokenization

Peirce on digital assets

The agenda for yesterday’s Security Trader Association conference in Washington, D.C., included another regulator who discussed digital assets regulation. Securities and Exchange Commission (SEC) Commissioner Hester Peirce (R) participated in an on-stage interview and covered a range of crypto-related topics that built on the need for digital assets legislation outlined by Commodity Futures Trading Commission Chair Rostin Behnam (D) the previous day.

On a question about innovation leaving the United States, Commissioner Peirce said, “I think the idea that you are comfortable driving an entire set of innovation outside the US is really a concern. And people will say to me, ‘Well, projects aren’t actually moving out of us. Look, you just were in San Francisco, you met with a ton of projects.’ But, what they’re telling me is that – yes, they’re in the U.S., but they’re they’re not letting any U.S. persons participate in any anything they’re doing. It’s all happening overseas. And, that’s the problem. I think we don’t know which pieces of it will last and end up changing the way we do things, but I suspect some of it will and I would rather have that innovation happen here.”

The Commissioner’s next response recalled themes of the Q&A grilling by Rep. Ritchie Torres (D, NY) of SEC Chair Gary Gensler at the House Financial Services Committee SEC Oversight two weeks ago. Gensler admitted Pokemon cards were not securities – though tokenized Pokemon cards gave him pause.

Yesterday, rather than Torres’ use of Pokemon cards, Peirce chose chinchillas.

Continue reading “SEC’s Hester Peirce On Innovation, Chinchillas And ETFs; McHenry As Speaker Rumors Instensify”

CFTC Behnam on legislation

Speaking at yesterday’s Security Traders Association conference in Washington, D.C., Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam participated in a fireside chat and said that he remains optimistic – but realistic – about digital asset legislation prospects given the election cycle.

He said, “So, it’s been a tough ride over the past couple of years because there are, in fact, opponents. But there’s been a number of legislative efforts in both the House and the Senate. Obviously, it took a little bit of a pause last year with a number of failures and bankruptcies in the crypto space. This, to me, feels like something that’s inevitable. When it happens, as we’re approaching, obviously, 2024 in an election year, remains to be seen -obviously a lot going on on The Hill right now: shutdowns, elections and whatnot.”

Behnam continued, “But, this remains a priority of a number of members of Congress on both the House and Senate side, and it’s just a matter of process: the friction of partisanship and debate and policymaking that hopefully we’ll come up with a sound policy that gives us additional authority over the commodity markets and, of course, gives the SEC what it needs to regulate the securities market.”

letter – crypto tax

Bloomberg’s Allyson Versprille reported yesterday on X that a group of senators led by Sen. Elizabeth Warren (D, MA) and Sen. Angus King (I, ME) are requesting that the date be moved up two years for crypto exchanges and brokerages to report client transactions to the federal government. Bloomberg’s headline says that the goal is to “Snag Crypto Tax Cheats.”

See the Congressional letter dated October 10 which was sent to Treasury and the IRS. Five other Democratic Senators signed on including Sen. Richard Blumenthal (CT), Sen. Bernie Sanders (VT), Sen. Brian Schatz (HI), Sen. Sheldon Whitehouse (RI) and Sen. Gary Peters (MI). Continue reading “CFTC Chair Behnam Optimistic About Legislation; Senators Make Urgent Crypto Taxation Request”

legislation complication

CoinDesk’s Jesse Hamilton opines on the House speaker mess and its effect on digital assets legislation momentum. He observes a range of roadblocks from Rep. Patrick McHenry (R, NC) new role as temporary House Speaker to a looming government shutdown in mid-November. Hamilton concludes, “Because this is only the first year of the two-year congressional session, the end of the calendar isn’t a death sentence for any of the legislation. However, January starts a presidential election year when the political stakes increase on everything and the partisan fight gets bloodier, so moving legislation becomes more complicated.” Read more.

Will a new speaker appear by the end of the day today from the House Republican conference? And – could House Democrats play a role in selecting a speaker if Republicans are deadlocked for an extended period?

terrorist financing

The Wall Street Journal reported yesterday that terrorist organization Hamas has received $41 million in crypto funds between 2021 and June of this year – not to mention other terrorist organization which more than double the funding amount. Israeli police tell the WSJ that they “froze further crypto accounts used by Hamas to solicit donations on social networks, part of a continuing effort to locate the ‘financial infrastructure in cryptocurrencies used by terror entities to fund their activities.'”

For transactions, the article reports that the stablecoin Tether was the main way terrorists moved funds. Data was sourced from blockchain analytics firm Elliptic. Read more.

more tips:

Israel Police freezes Hamas crypto accounts on Binance – Calcalist

Continue reading “Legislation Complication As Speaker Selection Process Begins; Terrorist Financing Comes Into Focus”

digital asset custody

Industry association GBBC Digital Finance (GDF) and the International Securities Services Association (ISSA) announced the publication of a primer on digital asset custody (DAC) yesterday.  In a press release, the associations explained, “This report is a primer to help move the knowledge of DAC forward by bringing to the forefront, the opportunities and barriers DAC providers have to successfully navigate moving to these new digital technologies and ways of working.”  The target market is traditional finance and financial service professionals.

On the regulation front, the associations see three key challenges for DAC globally: 1) the differences in asset definition; 2) the location-specific regulatory compliance obligations; and, 3) the overall impact of regulatory incompatibilities or inconsistencies between jurisdictions.”

Download the primer – 66 pages (PDF).

Download “key takeaways” from the primer – 11 pages (PDF).

The Staff Accounting Bulletin 121 from the SEC, which focuses on custody and has drawn the ire of Congress, is listed as a resource for the primer. Continue reading “New Digital Asset Custody Report; Real-Time Enforcement From FCA”

Speaker morass

With the Speaker role in limbo in the House (and an election(s) starting Wednesday says Roll Call), so too are the prospects for digital assets legislation.

From a pro-crypto perspective, a near-term slowdown with legislation in the United States may not be critical. “Macro” events such as approval of Bitcoin spot market ETFs could continue to drive retail and institutional interest. Favorable decisions in court cases (Coinbase, Ripple, etc.) could continue to push digital assets into the mainstream. And longer term, there are international efforts which could ultimately be seen as a threat to the U.S. dollar, its primacy and, therefore, national security – always a galvanizing force for Congress.

Meanwhile, anti-crypto advocates likely see a swing further right by Republicans with the House Speaker role as inhibiting the current digital assets agenda led by a House Republican leadership which has sought to build bipartisan momentum essential to law-making success in a divided government.

The House drama isn’t helping Democratic crypto advocates such as Senator Kirsten Gillibrand (D, NY) either. The Senator has openly expressed hope in growing her caucus’ interest in crypto legislation and remains a co-sponsor of the sole, comprehensive market structure bill in the Senate [S.2281] along with Senator Cynthia Lummis (R, WY).

Digital assets law will likely come in a negotiation between the House and Senate (especially stablecoins [H.R. 4766]), but not if the House becomes sidelined by politics and House Republicans render themselves impotent.

Overall, Republicans understand that the Speaker drama has been bad for business. Read one example on that topic from House Financial Services committee member Rep. Mike Flood (R, NE) in speaking to local media.

more tips:

Temporary Speaker Patrick McHenry Steers House on the Fly – The Wall Street Journal

Continue reading “Speaker Morass And The Digital Assets Pendulum; Tokenizing Treasuries”

White House door opens

Bharat Ramamurti, who was considered among crypto’s most strident critics within the White House and a member of its National Economic Council, has left and may open the door for stablecoin law.

As you may recall, negotiations on the stablecoin bill were nearly complete in July as a vote at the House Financial Services markup approached, but it’s believed Ramamurti helped undermine any support from Democratic leadership and, therefore, the White House.

Fortune’s Leo Schwartz reported this week that Lael Brainerd, head of the President’s National Economic Council, is more open to negotiations. A former House staffer with knowledge of past White House negotiations tells Schwartz,  “I one hundred percent believe that there’s more of a path forward than there was before (…) It opens the door for this to be a more methodical, realistic conversation.” Read more.

threat to bipartisanship

Rep. Wiley Nickel (D, NC) is apparently taking some heat from Republicans as the North Carolina congressmen attempts to raise money for his campaign war chest. A tweet from National Republican Congressional Committee (NRCC) press secretary Delanie Bomar takes issue with Nickel’s recent vote – which aligned with the entire Democratic caucus – to oust Speaker Kevin McCarthy (R, CA) this week. Continue reading “White House Door Cracks Open To Stablecoins; The Threat To Bipartisanship Amidst House Speaker Drama”

Speaker McHenry – questions

Amidst the revolt of a far-right wing minority of House Republicans which caused former Speaker Kevin McCarthy (R, CA) to lose his job, House Financial Services Chair Patrick McHenry’s (R, NC) was elevated to Speaker of the House “pro tempore.”

How’d McHenry get that job? It was a confidential list that McCarthy was required to submit to the Clerk of the House prior to the “motion to vacate” says CNN.

Is he thinking of taking the job long term?  So far, “No” – and that’s his word, emphatically, according to Punchbowl News which adds, “However, there’s a large group of House Republicans who would want his services atop the party.”

How about that gavel slam?

Speaker McHenry – digital assets

What does this mean for digital assets?

Delay, probably. Given all the legislative energy getting sucked into the House speaker drama, which includes two digital assets legislation champions in McHenry and House Majority Whip Tom Emmer (R, MN), consideration of bills, votes and hearings would seem to be pushed back as next week’s speaker election takes priority. The only saving grace: technically, the Senate and House will be in recess next week. Continue reading “Patrick McHenry’s New Speaker Role; The Escape Narrative”

Congressional opinions

Politico took the temperature of Members of Congress on whether or not they’re burning for digital assets legislation. In an article published yesterday, few surprises were elicited, but Rep. Bill Huizenga (R, MI) reiterated a commonly-held belief that – if not for FTX’s implosion – Democrats would be more publicly supportive of legislative efforts.

Rep. Jim Himes (D, CT), who supported the House Financial Services Committee’s stablecoin and digital asset market structure bills, is still worried about problems in the industry telling Politico: “I hear all these promises, but I say, ‘How is this going to change the neighborhood in St. Louis, or the state of Connecticut, or the United States?’ (…) To the average member, [they see] $2 trillion lost over time.” Read more.

SEC appeal denied

The Securities and Exchange Commission’s (SEC) attempt to appeal the Ripple decision has been denied. Fox Business’ Eleanor Terrett reported late yesterday, “[SEC’s motion] for leave to file an interlocutory appeal in the [Ripple] case has been DENIED… the SEC’s motion for certification of interlocutory appeal is DENIED, and the SEC’s request for a stay is DENIED as moot.” See more including the full decision here on X.

Blockworks summarizes the news saying in part, “The court did not find a ‘substantial ground for difference of opinion,’ [Judge Analisa] Torres wrote.” Read more. Continue reading “Capitol Hill Opinions Flourish On Digital Assets; SEC’s Ripple Appeal Denied”