Strategists at a Wells Fargo subsidiary think the US could design and release a central bank digital currency (CBDC) within the next five years. In a new report, Wells Fargo Advisors’ head of real asset strategy John LaForge and investment strategy analyst Mason Mendez say that the US is studying the potential of a CBDC […]
The post Wells Fargo Says an American CBDC Could Be Designed, Approved and Launched in Three to Five Years appeared first on The Daily Hodl.
U.S. Senator Cynthia Lummis and Representative French Hill urged the Justice Department to take “swift action” against Binance and Tether over facilitating funds for Hamas.
Cynthia Lummis, a crypto proponent representing Wyoming in the United States Senate, has called on the U.S. Justice Department to consider charges against crypto exchange Binance following the terrorist group Hamas’ attack on Israel.
In an Oct. 26 letter to U.S. Attorney General Merrick Garland, Lummis and Arkansas Representative French Hill urged Justice Department officials to “reach a charging decision on Binance” and “expeditiously conclude” investigations of allegedly illicit activities involving Tether. The two lawmakers’ remarks followed Hamas launching a coordinated attack against Israel on Oct. 7, which they suggested was supported in part by illicit crypto transactions “providing significant terrorism financing.”
“We urge the Department of Justice to carefully evaluate the extent to which Binance and Tether are providing material support and resources to support terrorism through violations of applicable sanctions laws and the Bank Secrecy Act,” said Lummis and Hill. “To that end, we strongly support swift action by the Department of Justice against Binance and Tether to choke off sources of funding to the terrorists currently targeting Israel.”
When it comes to illicit finance, crypto is not the enemy - bad actors are.
— Senator Cynthia Lummis (@SenLummis) October 26, 2023
I sent a letter asking DOJ to finish its investigation and consider criminal charges against Binance and Tether after reports they served as intermediaries for Hamas and engaged in illicit activities. pic.twitter.com/M3KGNFkpWc
The letter by Lummis, a Bitcoiner and supporter of crypto legislation in Congress, and Hill, the chair of the Subcommittee on Digital Assets, Financial Technology and Inclusion, echoed sentiments expressed by Senator Elizabeth Warren and other lawmakers linking crypto payments to terrorist activities. In contrast to Warren, however, the two Republican lawmakers directed the Justice Department to focus on “bad actors” — in this case, including Binance and Tether.
“[W]e must be careful not to paint all crypto asset intermediaries as suspect when a small handful of bad actors use them for nefarious purposes,” said the letter. “Many crypto asset intermediaries seek to comply with U.S. sanctions and money laundering laws, correctly viewing the regulations as necessary to unlock the promise of crypto assets and distributed ledger technology.”
Related: Advocacy groups push back against Sen. Warren linking crypto with terrorism
In the wake of the Oct. 7 attacks, crypto exchange Binance froze accounts linked to Hamas following requests from Israeli law enforcement. However, Lummis and Hill labeled this action as insufficient after the fact, as the exchange allowed terrorist groups to conduct business or was “willfully blind” in doing so. They made similar allegations against Tether for “knowingly facilitating violations of applicable sanctions laws.”
“While some reports claim Binance is now cooperating with Israeli law enforcement, this is immaterial to criminal culpability because Binance is only doing so after knowingly allowing its exchange to be used by terrorist organizations, and only after they have been caught.”
On Oct. 25, blockchain analytics firm Elliptic released a statement directed to U.S. lawmakers and the media saying there was “no evidence” Hamas had received a significant volume of crypto payments to fund its attacks against Israel. Compared to the millions of dollars claimed by other media outlets, Elliptic said one Hamas-linked campaign had raised only $21,000 since the Oct. 7 attack.
Magazine: The Truth Behind Cuba’s Bitcoin Revolution: An on-the-ground report
Gensler revealed that the SEC took 780 enforcement actions, including 500 standalone cases, and distributed $930 million to harmed investors.
The United States Securities and Exchange Commission (SEC) chief Gary Gensler’s speech before the 2023 Securities Enforcement Forum shed light on the regulatory body’s enforcement actions that led to $5 billion in judgments and orders. However, Gensler’s dig at the cryptocurrency market became a talking point for the crypto community on social media, where Gensler noted, “Don’t get me started on crypto. I won’t even name all the individuals we’ve charged in this highly noncompliant field.”
While talking about the economic perspective of the SEC’s enforcement action, Gensler noted that the agency filed more than 780 enforcement actions in 2023, including more than 500 standalone cases. The enforcement actions led to judgments and orders totaling $5 billion, out of which $930 million were distributed to harmed investors.
Gensler added that the SEC had filed lawsuits against 40 firms for violations of various rules and regulations since December 2021, leading to more than $1.5 billion in penalties. Gensler revealed that the SEC settled recordkeeping-related charges with 23 firms in the last fiscal year alone.
In his speech, the SEC chief reiterated his earlier stance on crypto, claiming that most of the crypto market falls under the securities bracket and, thus, must be governed under the same law. In his explanation of the broad definition of security, Gensler explained the concept of an “investment contract” and why a major chunk of the cryptocurrency market resembles it. According to Gensler, most cryptocurrency assets will pass the investment contract test, making them governed by securities regulations.
Related: Ripple lawyer calls SEC’s latest filing “hypocritical pivot”
Gensler went on to draw comparisons between the current crypto ecosystem and the financial landscape of the 1920s when securities laws were not in place. Gensler said that the crypto ecosystem is suffering from the same situation as the financial landscape before clear regulations came into place, leading to several scams, frauds and bankruptcies. He argued these issues necessitate stricter regulations.
“Without prejudging any one asset, the vast majority of crypto assets likely meet the investment contract test, making them subject to the securities laws.”
The SEC chief’s criticism of the crypto market is not new, and he has reiterated a similar stance for several years now. However, the crypto community, including some of the key businesses operating in the U.S. along with Congress members, have called upon Gensler to offer more clarity on crypto regulations.
Magazine: How to protect your crypto in a volatile market — Bitcoin OGs and experts weigh in
Asset manager Hashdex recently met with the U.S. SEC to address the regulator's concerns over its application for a spot Bitcoin ETF.
Asset manager Hashdex recently held a meeting with the U.S. Securities and Exchange Commission to address the regulator's concerns about its application to allow the Hashdex Bitcoin Futures exchange-traded fund (ETF) to hold spot Bitcoin, a source familiar with the matter told Cointelegraph.
As per a memorandum released by the Division of Trading Markets, the meeting took place on Oct. 13, with six SEC officials and representatives of Hashdex, NYSE Arca, Tidal Financial Group, and law firm K&L Gates in attendance.
In the meeting, Hashdex presented its mechanism allowing spot Bitcoin (BTC) to be traded and held in the ETF on the Chicago Mercantile Exchange (CME), which the Commodity Futures Trading Commission regulates.
Hashdex’s filing differs from other spot Bitcoin applications because it doesn't have a surveillance-sharing agreement with crypto exchange Coinbase. Instead, Hashdex proposes to acquire spot BTC from physical exchanges within the CME market, thus making it entirely reliant on CME pricing for transactions, according to an SEC filing by NYSE Arca in late August.
A presentation shared with SEC officials during this month’s meeting shows that the strategy is also built on the commission's Teucrium Order, which states that the Bitcoin futures market is sufficiently developed to support financial products seeking exposure to BTC.
As a next step, the SEC may ask for more information before the application's first deadline on Nov. 17, according to the person with knowledge of the matter.
Hashdex claims to have over $380 million in assets under management and 14 exchange-traded products (ETPs) across seven countries. An ETP is a type of investment vehicle backed by a crypto token.
The SEC approved Hashdex's Bitcoin Futures ETF in April 2022. The product has been listed on NYSE Arca since September last year. If the rule change is approved, the ETF will be able to hold spot Bitcoin as well.
Several major asset managers are racing to list the first spot Bitcoin ETF in the United States. BlackRock's ETF proposal was recently listed on the Depository Trust & Clearing Corporation (DTCC), suggesting approval could be on the way, according to Bloomberg ETF analyst Eric Balchunas.
"The current consensus view is that the SEC will approve all spot ETFs within three months," said the source.
Magazine: Blockchain detectives — Mt. Gox collapse saw birth of Chainalysis
With the election of Mike Johnson as speaker of the U.S. House of Representatives, Congress will once again be able to move forward on crypto bills.
Members of the United States House of Representatives have chosen Mike Johnson to be the body’s next speaker — the second in line to the U.S. presidency and a very powerful figure in Congress.
In an Oct. 25 vote, all 220 Republicans present in the House voted for Johnson, while 209 Democrats cast ballots for Representative Hakeem Jeffries. The vote marked the first time in more than three weeks that the government body had clearly defined leadership. Representative Patrick McHenry had been acting as temporary speaker since Oct. 3 following a vote casting out former speaker Kevin McCarthy.
Unlike other candidates considered for speaker, Representative Johnson’s views on crypto were largely unknown. Many in the space had been hopeful that Representative Tom Emmer — a local advocate for digital assets in Congress — would win the gavel. However, his campaign lasted only a few hours following a statement from former U.S. President Donald Trump urging far-right Republicans not to support him.
According to @coinbase, the new candidate for Speaker of the House @RepMikeJohnson’s sentiment towards crypto is “Unclear” because he hasn’t yet made any statements about it. pic.twitter.com/5CEKjNkctr
— yuga.eth (@yugacohler) October 25, 2023
Related: US Congress remains legislatively paralyzed on crypto bills without a House speaker
While McHenry was likely preoccupied with preparing for the House vote, Financial Services Committee vice chair French Hill led a subcommittee hearing on ‘Modernizing Financial Services Through Innovation and Competition.’ The hearing focused on discussions around crypto-related legislation, including the Financial Services Innovation Act and Examining Consumer Choice in Digital Payments Act.
With the swearing-in of Speaker Johnson, the House of Representatives can once again bring legislation to the floor for votes. Lawmakers previously passed bills out of committee, including the Financial Innovation and Technology for the 21st Century Act, the Blockchain Regulatory Certainty Act, the Clarity for Payment Stablecoins Act and the Keep Your Coins Act. However, the House may need to move on a new spending bill before Nov. 17 to address a potential government shutdown.
Magazine: US gov’t messed up my $250K Bitcoin price prediction: Tim Draper, Hall of Flame
Blockchain analysis firm Chainalysis is unveiling the 2023 Global Crypto Adoption Index in a new report. According to Chainlysis, the United States ranks fourth globally with regard to crypto adoption, behind India, Nigeria and Vietnam. The United States and Canada are the only countries from North America in the top 20. Canada is ranked 19th […]
The post This Is Where the United States Ranks in Terms of Global Crypto Adoption, According to Chainalysis appeared first on The Daily Hodl.
The Minnesota congressman was one of only a few crypto proponents in Congress being considered as a possible speaker of the House by Republican lawmakers.
Tom Emmer, the current majority whip and a crypto proponent, has reportedly dropped his bid to become the next speaker of the United States House of Representatives — a position second in line to the U.S. presidency.
According to multiple reports from major news outlets on Oct. 24, Representative Emmer ended his campaign for speaker after he was unable to secure the 217 Republican votes necessary to win on the House floor, a vote that had been expected sometime in the next day or two. The Minnesota congressman had only won the Republican nomination for speaker early on Oct. 24, making the race for the position open to a number of candidates once again.
Representative Emmer was the third candidate for speaker to drop his bid following a lack of Republican support. Following U.S. lawmakers in the House voting to remove former speaker Kevin McCarthy on Oct. 3, Representatives Jim Jordan and Steve Scalise have both attempted to drum up enough votes to win the speakership, but ultimately failed. Representative Patrick McHenry has been acting as interim speaker.
Emmer, a crypto proponent well known by many in the space, has spoken about financial privacy concerns regarding central bank digital currencies (CBDCs) and the non-partisan nature of regulating digital assets. Cointelegraph reached out to Emmer’s office following his nomination but did not receive a response at the time of publication.
Following Emmer’s nomination by Republicans, former U.S. President Donald Trump told his Truth Social followers that supporting the Minnesota congressman would be a “tragic mistake”. The former president’s message followed Emmer expressing his desire to continue a “strong working relationship” with Trump should he win the speakership.
Related: Crypto adoption crosses party lines amid Washington’s political deadlock
At the time of publication, it was unclear who the Republicans planned to nominate next for speaker. Since Oct. 3, the House of Representatives has been legislatively paralyzed on crypto bills passed by the Financial Services Committee, including the Financial Innovation and Technology for the 21st Century Act, the Blockchain Regulatory Certainty Act, the Clarity for Payment Stablecoins Act and the Keep Your Coins Act.
Magazine: 6 Questions for Adelle Nazarian on crypto, journalism and the future of Bitcoin
Lawyers representing the crypto exchange and its CEO claimed the CFTC was attempting to act as the "world’s derivatives police" in its lawsuit.
Lawyers representing Binance and CEO Changpeng “CZ” Zhao have filed statements in support of a motion to dismiss a lawsuit filed by the United States Commodity Futures Trading Commission (CFTC) in March.
In an Oct. 23 filing in U.S. District Court for the Northern District of Illinois, CZ’s and Binance’s attorneys made several legal claims arguing for the dismissal of the CFTC’s case against the crypto exchange. According to the legal teams, the regulator’s arguments, if accepted by the court, “would allow it to regulate any activity in cryptocurrency [...] related to a derivatives product” across the globe.
“Congress did not make the CFTC the world’s derivatives police, and the Court should reject the agency’s effort to expand its territorial reach beyond what is permitted by the law,” said the filing.
Binance’s and CZ’s lawyers also went after each of the individual counts brought by the CFTC, arguing the regulator was “pursuing a novel theory” in an anti-evasion claim and failed to meet the standards for others. The attorneys called on the court to “dismiss the Complaint with prejudice”.
Related: Binance exit aftershock: Can one resignation tip the crypto trust scales?
The CFTC lawsuit, first filed in March, alleged Binance failed to register with the regulator in violation of rules on derivatives trading. According to the CFTC, CZ was aware that Binance had solicited customers based in the United States, requiring the exchange to be in compliance with regulatory requirements.
Binance lawyers made a similar filing in July for dismissing the case, arguing at the time that the CFTC exceeded its regulatory authority. The crypto exchange also faces a lawsuit from the U.S. Securities and Exchange Commission filed in June.
Stablecoin activity has been increasingly occurring through entities that aren’t licensed in the United States, according to Chainalysis.
The United States government may be losing regulatory oversight of the stablecoin market, according to a new report by blockchain research firm Chainalysis.
Stablecoin activity has been increasingly occurring through entities that aren’t licensed in the United States, Chainalysis stated in its latest North America cryptocurrency report released on Oct. 23.
According to Chainalysis’ findings, the majority of stablecoin inflows to the 50 biggest cryptocurrency services have shifted from U.S.-licensed services to non-U.S.-licensed services since spring 2023.
As of June 2023, about 55% of stablecoin inflows to the top 50 services were going to non-U.S.-licensed exchanges, the report stated.
The study suggested that the U.S. government has been increasingly losing its ability to oversee the stablecoin market, while U.S. consumers have been missing opportunities to engage with regulated stablecoins.
Related: CoinShares says US not lagging in crypto adoption and regulation
“Though U.S. entities originally helped legitimize and seed the stablecoin market, more crypto users are pursuing stablecoin-related activity with trading platforms and issuers headquartered abroad,” Chainalysis wrote. The firm stated that U.S. lawmakers have yet to pass stablecoin regulations as Congress is still considering related bills like the Clarity for Payment Stablecoins Act and the Responsible Financial Innovation Act.
Despite a drop in licensed stablecoin activity in the United States, North America has emerged as the largest cryptocurrency market, with an estimated $1.2 trillion received between July 2022 and June 2023. The region accounted for 24.4% of global transaction volume during the period, beating the regions of Central, Northern and Western Europe, which received an estimated $1 trillion, according to Chainalysis.
Magazine: The truth behind Cuba’s Bitcoin revolution: An on-the-ground report
From Hong Kong to Europe and the United States, regulators are pushing for more oversight and control over digital assets.
In the last week, several major financial regulators, both national and international, simultaneously produced new guidelines for decentralized assets. The European Banking Authority and the European Securities and Markets Authority proposed guidelines for assessing the suitability of management members in crypto firms, offering standardized criteria for evaluating their knowledge, expertise, integrity and ability to dedicate adequate time to fulfill their responsibilities.
The Basel Committee on Banking Supervision of the Bank for International Settlements (BIS) proposed to oblige banks to provide both quantitative and qualitative data on exposures to crypto assets and the corresponding capital and liquidity requirements. According to the BIS, using a uniform disclosure format will encourage the application of market discipline and lessen information asymmetry between banks and market participants.
The United States Treasury Department’s Financial Crimes Enforcement Network proposed designating cryptocurrency mixing as an area of “primary money laundering concern” following Hamas’ attack on Israel. It suggests requiring domestic financial institutions and agencies to “implement certain recordkeeping and reporting requirements” for crypto mixers transactions.
The Hong Kong Securities and Futures Commission (SFC) will make certain digital currency products available only to professional investors. The updated requirements consider digital assets “complex products” under the SFC and subject to the same guidelines as similar financial products. The commission mentions crypto exchange-traded funds and products issued outside Hong Kong as complex products.
FTX’s former general counsel Can Sun was unaware of the exchange’s comingling of funds with Alameda Research, he told jurors during his testimony in Sam Bankman-Fried’s criminal trial. Sun said he learned from other employees about Alameda’s exemption from the liquidation engine system in August 2022. Typically, the system would liquidate loss-making trades, but Alameda reportedly bypassed the mechanism due to its exception.
Accounting professor Peter Easton provided a breakdown of the alleged commingling of funds between FTX and Alameda Research since 2021. According to Easton’s analysis, Alameda invested in Genesis Capital, K5 Global Holdings, Anthropic PBC, Dave Inc, Modulo Capital and other ventures, partially using funds from FTX customers. In June 2022, Alameda had a negative balance of $11.3 billion with FTX, while the companies’ liquid assets stood at $2.3 billion, meaning a gap of $9 billion between the sister firms. Another critical point from the analysis: Alameda has 57 accounts with FTX that could have negative balances, whereas no other customer could do so. The analysis challenges Bankman-Fried’s defense argument that Alameda had similar privileges as other market makers on FTX.
A Pennsylvania House Representative has cut a two-year crypto mining ban from a bill to regulate the sector’s energy consumption, claiming trade labor unions pressured the change. The committee’s chair and the bill’s sponsor, Democratic Representative Greg Vitali, revealed that Democratic Party leaders pressured him not to run the bill inclusive of the moratorium. Vitali said building trade labor unions had “chronic opposition” to environmental policy and claimed the unions had his Democratic colleagues in their pocket. According to the politician, voting against the unions would risk the Democratic majority in Pennsylvania’s House, and he would rather see the bill pass sans moratorium than not at all.
New York’s attorney general has filed a lawsuit against cryptocurrency firms Gemini, Genesis and Digital Currency Group (DCG) for allegedly defrauding investors through the Gemini Earn investment program. An official statement from the office of Attorney General Letitia James outlines the basis of the charges, claiming that the companies defrauded more than 23,000 investors, including 29,000 New York citizens, of more than $1 billion. An investigation carried out by James’ office claims that Gemini lied to investors about its Gemini Earn investment program, which it ran in partnership with Genesis. It argues that while Gemini had assured investors that the program was a low-risk investment, investigations reveal that Genesis’ financials “were risky.”
