A nonprofit crypto advocacy group says that a stablecoin bill proposed earlier this week by two US senators would violate free speech rights. In a new article, Coin Center says that the bipartisan stablecoin bill – proposed by Republican Senator Cynthia Lummis of Wyoming and Democrat Senator Kirsten Gillibrand of New York – is unconstitutional […]
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The senator wants new sanctions authority included in stablecoin legislation, but the Lummis-Gillibrand bill will disappoint her.
United States Senator Elizabeth Warren has sent a letter to Treasury Secretary Janet Yellen commenting on Deputy Treasury Secretary Wally Adeyemo’s testimony before the Senate Banking Committee on April 9. She pursued the same line of thought as she did during the hearing — Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT).
Warren expressed her support in the letter for the legislative adoption of more comprehensive AML/CFT measures for stablecoins. Adeyemo appeared at the Senate hearing to discuss Treasury proposals for expanding its sanctions powers to blockchain validator node operators, among other measures. The Treasury listed its enhanced enforcement goals in response to gaps in current regulation in a document Warren calls a “letter to Congress” dated November 2023. Warren wrote:
Warren was apparently not referring to the stablecoin bill introduced into the Senate by Senators Kirsten Gillibrand and Cynthia Lummis on April 17, the day after the date of her letter. The 179-page Lummis-Gillibrand bill makes almost no mention of AML/CFT.
The Chair of the Commodity Futures Trading Commission (CFTC) says he is increasingly concerned about the growing accessibility of Bitcoin (BTC) and that new federal laws are needed to regulate its market. In a speech in Naples, CTFC Chair Rostin Behnam says that he’s worried the recent approval of spot market BTC exchange-traded funds (ETFs) […]
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Top US-based crypto exchange Coinbase is countering Senator Elizabeth Warren’s claim that the firm is undermining bipartisan legislation. In a new thread on the social media platform X, Coinbase chief policy officer Faryar Shirzad says Warren’s claim that the firm is hiring national security veterans as a means of combating bipartisan legislation has no merit. […]
The post Coinbase Says Senator’s Claims the Firm Is Undermining Bipartisan Legislation Are ‘Unfounded’ in New Open Letter appeared first on The Daily Hodl.
Four US Senators are targeting digital assets in a new bipartisan bill that aims to enforce sanctions against foreign parties that transact with terrorist organizations. According to a new press release, Republican Senators Mitt Romney of Utah and Mike Rounds of South Dakota are teaming up with Democrats Mike Warner of Virginia and Jack Reed […]
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The former presidential candidate spoke at NABS about opportunities the United States may be missing to blockchain and AI for public good.
Andrew Yang, former candidate for United States president and New York City mayor and founder of the Forward Party, had sobering observations about the uses of blockchain, or its lack of use, in the United States and U.S. regulation of artificial intelligence (AI) when he spoke Nov. 16 at the North American Blockchain Summit (NABS) in Fort Worth, TX.
Yang, who described himself as “enormous believer in smart money, smart currencies,” said he saw blockchain and Web3 technology in a sorry state, especially in the United States, which creates the risk of firms fleeing overseas. Part of the problem is public perception, Yang said:
“The way to avoid this fate it is to have positive use cases for blockchain in solving problems for the American people. […] Unfortunately, what they see in the news is just Sam Bankman-Fried and FTX.”
“We have not scratched the surface of what these tools can do to combat poverty,” Yang said. He saw other potential applications of blockchain technology in civic life as well. “Something I'm super passionate about, why is it that we can't vote on our mobile phones?” he said.
Related: FTX collapse could trigger ‘appetite’ for harsher regulation, says Andrew Yang
Yang raised concerns about AI too, saying U.S. policy on AI is “fairly limited, maybe even incoherent.” Yang was among the 2,600 tech leaders and researchers who signed an open letter calling for a moratorium on training AI systems more powerful than GPT-4. He reiterated at NABS, “We may be getting ahead of ourselves with the development of these generative models.”
AI is intimately tied to politics, Yang said, because of the effect it could have on campaigning and public life in general. He said:
“You saw a deep fake of the Pentagon on fire and the markets moved on that.”
The U.S. regulatory approach — “let's wait until the fiasco happens and then we'll have hearings about it afterwards,” Yang called it — and the “winner-take-all” economy is part of the problem. In that atmosphere, the benefits of the technological advances will be divided highly unevenly, making the existing divisions in U.S. political life worse.
An IPR special correspondent attended the recent kickoff of the Florida Forward Party, where Andrew Yang stated he is backing Rep. Dean Phillips over President Joe Biden in the Democratic primary. Follow IPR for more! #flapolhttps://t.co/7jl6oR3lsv
— Independent Political Report (@I_P_R) November 16, 2023
Social media is governed by Section 230 of the Communications Decency Act of 1996, Yang said. Facebook didn’t even exist in 1996. So, while legislation on AI is expected to pass soon in the European Union, “We're in danger of falling right into space because our legislative body is not functioning at a high level.”
Magazine: Crypto City: Guide to New York
The act aims to explicitly forbid U.S. government officials from engaging in transactions with iFinex, the parent company of USDT issuer Tether.
United States Representatives Zach Nunn and Abigail Spanberger have jointly introduced the Creating Legal Accountability for Rogue Innovators and Technology Act of 2023, or the CLARITY Act of 2023. The legislation aims to prohibit federal government officials from conducting business with Chinese blockchain companies.
The act would ban government employees from using the underlying networks of Chinese blockchain or cryptocurrency trading platforms. Furthermore, it would explicitly forbid U.S. government officials from engaging in transactions with iFinex, the parent company of USDT issuer Tether.
In addition to iFinex, the CLARITY Act would prohibit officials from conducting transactions with the Spartan Network, the Conflux Network and Red Date Technology. In a statement on Wednesday, the lawmakers said that the legislation, if passed, would ensure the nation’s “foreign adversaries … do not have a backdoor to access critical national security intelligence and Americans’ private information.”
Tether was reported to have been exposed to Chinese securities and other Chinese firms earlier in 2023. On June 16, several news sources, including Bloomberg, disclosed that the company previously held securities from Chinese state-owned firms. Bloomberg referred to documents released by the New York Attorney General and emphasized that deposits from entities like the Industrial and Commercial Bank of China, China Construction Bank, and Agricultural Bank of China supported Tether (USDT).
This revelation follows years of inquiry and concern about the assets backing Tether’s stablecoin.
Tether’s reserves include substantial short-term loans to Chinese firms and a significant loan to the cryptocurrency platform Celsius Network. Tether had previously denied any involvement with the debt of China’s troubled Evergrande Group but had not revealed its holdings of other Chinese securities.
Related: Tether issues $610M debt financing to Bitcoin miner Northern Data
Further, the U.S. Securities and Exchange Commission is also closely monitoring Tether’s operations. In September, a report suggested that the company secretly began offering USDT stablecoin loans to customers a year after it pledged to cease providing secured loans.
As the bill’s sponsors state, the latest move underscores Washington’s growing concerns about Chinese connections within the cryptocurrency sector.
Magazine: How to protect your crypto in a volatile market — Bitcoin OGs and experts weigh in
Rep. Tom Emmer added a provision in the House GOP spending bill that would block the SEC from using government funds to pursue crypto companies until Congress weighs in on who has jurisdiction over crypto.
Pro-crypto Congressman Tom Emmer is advancing an amendment aimed at depriving the United States securities regulator from using government funds to go after crypto enforcement.
On Nov. 8, Emmer attached an amendment to HR 4664 — the Financial Services and General Government Appropriations Act, or federal budget.
The amendment, which has passed unopposed, prohibits the Securities and Exchange Commission from using funds for enforcement activities related to digital asset transactions until Congress passes future legislation granting the agency jurisdiction to do so.
My amendment prohibits the SEC from using taxpayer-funded resources to pursue enforcement actions against the digital asset industry until Congress passes legislation that authorizes regulatory enforcement jurisdiction.
— Tom Emmer (@GOPMajorityWhip) November 8, 2023
While the amendment has advanced, the House’s budget where it’s included will need to still face a reconciliation committee before it’s passed.
In a Nov. 8 statement, Emmer suggested the Department of Justice, the Treasury and the Treasury’s Office of Foreign Asset Control can handle “future bad actors like FTX.”
“SEC Chair Gensler cannot continue to abuse the powers of his agency to fulfill a political agenda of driving the new and promising digital asset industry offshore.”
Republican lawmakers are trying to reduce funding across all federal agencies.
On Nov. 7, Representative Tim Burchett took a swing at Gensler and others by proposing an amendment that would reduce the SEC chairman’s salary to $1. Burchett also proposed cutting the salaries of other officials who have drawn the GOP’s ire.
House Republicans are set once again to crank up their "Holman Rule" machine, this time on Financial Services Approps/HR 4664 – to reduce to $1 the salaries of the SEC Chairman, the IRS Commissioner, the head of the WH Domestic Policy Council, and… the WH Press Secretary!
— Ira Goldman (@KDbyProxy) November 7, 2023
pic.twitter.com/fl5lQBePwb
The budget expires on Nov. 17, when the House and Senate proposals must be reconciled or temporary funding approved to avoid a government shutdown.
Related: Ripple’s legal chief questions SEC case losses under Gensler
With Republican Jim Johnson installed as the House speaker, digital asset legislation is also being revived in addition to Federal Budget-related matters.
Among the crypto-related bills awaiting Congressional attention are the Financial Innovation and Technology (FIT) for the 21st Century Act, the Blockchain Regulatory Certainty Act, the Clarity for Payment Stablecoins Act and the Keep Your Coins Act.
On Nov. 7, Senator Ted Budd introduced the Keep Your Coins Act — guaranteeing the right to maintain self-custody wallets — to the Senate after it passed the House Financial Services Committee in July.
The same day, The Wall Street Journal reported Deputy Treasury Secretary Wally Adeyemo urged Congress to crack down on the use of cryptocurrency for funding terrorism.
“There are places where we think Congress needs to act. We’re going to work with Congress to get more tools,” he said at the annual meeting of the Securities Industry and Financial Markets Association.
Over 100 legislators called on Joe Biden’s administration to act against cryptocurrencies’ purported role in terrorism financing in an Oct. 17 letter spearheaded by Senator Elizabeth Warren.
Magazine: US gov’t messed up my $250K Bitcoin price prediction: Tim Draper, Hall of Flame
Besides being short on crypto specialists, the SEC OIG noted a litany of problems that are already familiar – lack of legislative clarity, lack of interagency coordination, etc.
The Office of the Inspector General (OIG) of the United States Securities and Exchange Commission (SEC) has released its annual examination of the most serious management and performance challenges facing the agency. Crypto was on its list, as no surprise to anyone in the crypto community.
The OIG’s “Statement on the SEC’s Management and Performance Challenges” noted the agency’s previous statements about the lack of disclosure and “widespread noncompliance with existing securities laws by crypto asset market participants.”
The existing law leaves gaps in oversight related to crypto assets that are not securities and certain stablecoins. There have been calls for comprehensive legislation and interagency coordination. In addition, the report said:
“Caselaw concerning the application of the securities laws to crypto assets is limited and still developing.”
Those facts are well known. Employment issues in the SEC are less publicized. The report said the agency has been trying to add crypto specialist positions in its examinations, trading and markets, and enforcement divisions. The Office of the General Counsel and the Office of International Affairs are also seeking new to fill new crypto-related positions.
Related: Coinbase political initiative features US lawmaker who admitted to ethics violations
The SEC’s hiring efforts have been frustrated by a small candidate pool and high competition with the private sector for crypto specialists. Many potential candidates hold crypto assets, the report continued:
“Candidates are often unwilling to divest their crypto assets to work for the SEC.”
This disqualifies them from working for the agency under a determination by the Office of Ethics Counsel. The OIG is planning to give SEC recruitment practices more scrutiny in FY 2024, it said.
The OIG reacts to outside requests for investigation as well as implementing internal examinations, although it is characteristically slow to react. The OIG was called on to investigate a potential conflict of interest on the part of former corporate finance director William Hinman, whose speech identifying Ether as not a security has been widely cited.
The SEC’s Office of Inspector General's (OIG) report is worth a read. Besides the embarrassingly bad performance review, the OIG concludes “there is uncertainty” whether the SEC has jurisdiction over crypto. This is the SEC’s own cop on the beat talking. https://t.co/aOjOyzhQZX
— Stuart Alderoty (@s_alderoty) October 27, 2022
Hinman had a financial interest in the law firm Simpson Thacher & Bartlett, which is a member of the Enterprise Ethereum Alliance (EEA), a good-government group called Empower Oversight claimed in a letter to the OIG in 2022. That claim has apparently not been examined by June 2023, when lawyer John Deaton called for the OIG to examine the Hinman speech again in an interview with Cointelegraph.
Magazine: 6 Questions for JW Verret — the blockchain professor who’s tracking the money
The new tokens join the ranks of BTC, ETH and LTC for use by the 4,000-plus companies located in the zone, which is considering new legal measures as well.
The Dubai Financial Services Authority (DFSA) recognized two more tokens on Nov. 2, adding XRP (XRP) and Toncoin (TON) to its list of recognized tokens. They join Bitcoin (BTC), Ether (ETH) and Litecoin (LTC) as coins recognized in the Dubai International Financial Centre (DIFC).
The tokens’ new status will allow financial institutions in the DIFC to carry out transactions with them. There are over 4,000 companies located in the special economic zone. Ripple opened its MENA headquarters in the DIFC in 2020.
About 20% of Ripple customers are in that region, the company said in a statement. Ripple CEO Brad Garlinghouse said:
“It’s refreshing to see the DFSA encourage the adoption and use of digital assets such as XRP to position Dubai as a leading financial services hub intent on attracting foreign investment and accelerating economic growth.”
The DFSA regulates the DIFC alone. It instituted regulations on cryptocurrency in October 2021 and augmented those regulations in November 2022. In late September, the DIFC announced a proposed Digital Assets Law. It also proposed repealing the 2005 Law of Security and the Financial Collateral Regulations and then passing an updated Law of Security that encompassed collateral regulations as well.
The proposed digital assets law “sets out the legal characteristics of a digital asset, its proprietary nature, how it may be controlled, transferred, and dealt with by interested parties.”
Related: Dubai VARA grants ‘initial approval’ to crypto firm WadzPay
The new Security Law would be based on the United Nations Commission on International Trade Law secured transactions model, with adaptations. Those laws are in their consultation period through Nov. 5.
Dubai’s regulators have consistently demonstrated their pro-innovation approach, with this announcement as the latest example. @Ripple will continue doubling down in regions where there is regulatory clarity for crypto – a key reason we’re hosting #RippleSwell in Dubai this… https://t.co/PlIj7ubTcg
— Brad Garlinghouse (@bgarlinghouse) November 2, 2023
This comes on the heels of the Abu Dhabi Global Market’s passage of Distributed Ledger Technology (DLT) Foundations Regulations, which took effect on Nov. 1.
In Dubai proper, the Dubai Virtual Asset Regulatory Authority was established in March 2022 and given authority over all the emirate and its free trade zones except the DIFC. A virtual assets law was instituted in the emirate at the same time.
Magazine: Crypto City: Guide to Dubai
