Crypto, Congress & the Bills📜
Crypto, Congress & the Bills📜
Congress has fresh crypto bills. Jon Stewart and Mark Cuban are chatting about the blend of Wall Street and crypto. Coinbase got some legal drama and app glitches. But, Base is standing tall.
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In the US, Congress is shaking things up with some crypto-focused bills. If they sail smoothly through, we could be looking at a significant chapter in crypto's regulatory tale.
The Line-Up 😎
S.4356 - Lummis-Gillibrand Responsible Financial Innovation Act
H.R.4766 - Clarity for Payment Stablecoins Act of 2023
H.R.4763 - Financial Innovation and Technology for the 21st Century Act
H.R.1747 - Blockchain Regulatory Certainty Act
S.2355 - Crypto-Asset National Security Enhancement and Enforcement Act
H.R.2670 - National Defense Authorization Act for Fiscal Year 2024
H.R.4841 - Keep Your Coins Act of 2023
Understanding the US crypto-tango 🤔
To get these bills dancing into laws, there's a routine to follow.
Let's simplify it:
The birth of a bill: Got an idea? Cool.
But you'll need a Senator or Representative to formally kick things off.
Show and tell: The bill gets introduced, and everyone gets a peek at what's inside.
Committee chats: A group deep dives into the bill, debates, makes tweaks, and once it's polished, it's presented for a broader chat.
The big debate
House of Representatives: It's more about majority rules here. Some bills have strict protocols, while others have a bit more wiggle room.
Senate: This is where discussions can stretch out a bit. The keyword is compromise, and sometimes they take a while to get there!
Singing the same tune: Both the House and Senate need to agree on the final version.
Presidential encore
Yay!: President likes it, signs it, and it's a hit (law)!
Nay!: If vetoed, it heads back to Congress. They can tweak it or try to push it through with a lot of support.
Maybe? If the President plays hard to get for 10 days, it can still become a law (with a catch).
Let’s dive deep into the bills now 🥽
1. Lummis-Gillibrand Responsible Financial Innovation Act
Purpose: Formulation of a comprehensive U.S. digital asset policy prioritising consumer protection.
Status: Back in the Senate, pending committee deliberation.
Key details:
CFTC to oversee crypto exchanges.
Payment stablecoins can only be issued by banks/credit unions.
Algorithmic stablecoins fall under CFTC.
New rules and penalties for crypto ATMs and money laundering.
Definition for "decentralised crypto asset exchange" presented.
Support: Endorsed by influential figures from the Treasury, White House, and House of Reps.
Purpose: Regulation of stablecoin issuers and the affirmation of self-custody rights for crypto users.
Status: Cleared by the House Committee on Financial Services.
Key details:
Stablecoin issuers must maintain reserves.
The Federal Reserve to manage stablecoin issuance.
Authorised issuers: select depository institutions and state-backed entities.
Clear operational standards and legal demarcations.
Purpose: To set regulatory norms in the digital asset domain, clarifying CFTC and SEC roles.
Status: Presented by Senior House Republicans; June hearing conducted.
Key details:
Definitions for "blockchain" and "digital asset" outlined.
Process set for recognising decentralised blockchains.
Digital asset issuers to disclose project specifics.
Majority crypto tokens classified as commodities.
Registration protocols for digital intermediaries set with SEC.
Purpose: Support blockchain innovation, providing regulatory relief to non-custodial blockchain entities.
Status: Approved by the Financial Committee.
Key details:
Exemptions for certain blockchain developers/service providers.
Clear regulatory framework presented.
Emphasis on the transformative potential of blockchain technology.
Purpose: Augmenting DeFi regulations to curb crypto-linked crimes.
Status: Presented by a bipartisan senator group.
Key details:
DeFi services to be treated akin to banks and other financial institutions.
Mandate AML measures, customer due diligence, and reporting suspicious transactions.
Illicit crypto kiosk and ATM transactions addressed.
Extended regulatory powers to the Treasury.
Purpose: Redefinition of the U.S. military budget for 2024.
Status: Approved by both House and Senate.
Key details:
Space Force realignment.
Initiation of the Space National Guard.
Adjustments in National Guard Bureau and ranks.
Uniformity in Space Force officer ranks.
Purpose: Preservation of consumers' rights to self-custody digital assets.
Status: Sanctioned by the U.S. House Committee on Financial Services.
Key details:
Upholding the right to self-custody.
Restrictions are placed on federal agencies regarding crypto transactions.
Highlight individual freedoms and protection against state surveillance.
Defence Budget Bill 🪖
Overview: The US Senate has endorsed a groundbreaking defence budget with vast bipartisan approval.
Key inclusions:
Crypto AML Legislation:
As part of the defence budget, anti-money laundering (AML) regulations focused on cryptocurrencies have been introduced.
Crypto ATM Regulations:
New mandates that compel crypto ATMs to collect user identification data.
Legislative Provisions:
A merger of elements from both the Lummis-Gillibrand Act and the Digital Asset Anti-Money Laundering Act by Senators Elizabeth Warren (Democrat) and Roger Marshall (Republican).
Despite the unprecedented progress in crypto legislation by the House of Representatives, the bills may face hurdles in the Senate and the White House.
As the 2024 presidential election approaches, it adds another layer of complexity. Political calculations may influence legislative moves, particularly those seeking office.
TTD Blockquote🎙️
Jon Stewart - American comedian | political commentator | actor | director, | television host.
“When I look at the intricate workings of Wall Street, it doesn’t look that much different from the shit that Sam Bankman-Fried pulled.”
Stewart's Sharp Remarks: Wall Street Meets Crypto Controversy
Jon Stewart is back in the spotlight, this time drawing a parallel between Wall Street and former FTX CEO Sam Bankman-Fried. On his podcast “The Problem With Jon Stewart,” he and Mark Cuban delve into the complex intersections of finance, politics, and crypto.
Cuban points out how power is often purchased, be it through platforms or politics. With Wall Street seemingly eyeing the crypto space – aided by regulatory bodies like the SEC – the landscape is ever-evolving.
The conversation gains depth as Wall Street's growing interest in crypto emerges. With the SEC's increased scrutiny of American crypto entities and major financial institutions like BlackRock and Fidelity veering towards Bitcoin ETFs, the boundary between the traditional and decentralised finance worlds is blurring.
Stewart and Cuban's discourse underscores the evolving narrative of finance in the digital age, highlighting the intertwined destinies of Wall Street, crypto, and regulators.
“It takes a couple of frauds to pop a bubble,” said Cuban. “Now crypto will get its act together but we don’t have the equivalent in government and politics. Everybody is still corrupted.”
TTD Coinbase 🧿
The Amicus Brief
A group of six legal scholars specializing in securities law have filed an amicus brief in support of Coinbase in its legal battle against the SEC. The scholars argue that investment contracts require anticipation of business income, profits, or assets, and they urge the court to adhere to the established legal definition of "investment contract" when interpreting the case.
The 6: Stephen Bainbridge of the University of California, Los Angeles; Tamar Frankel of Boston University School of Law; Sean Griffith of Fordham University School of Law; Lawrence Hamermesh of Widener University, Delaware Law School; Matthew Henderson of the University of Chicago Law School; and Jonathan Macey from Yale Law School.
Senator Cynthia Lummis, the Blockchain Association, the Crypto Council for Innovation, the Chamber of Digital Commerce, the DeFi Education Fund, the Chamber of Progress, the Consumer Technology Association, and Andreessen Horowitz, Paradigm have filed amicus briefs in the Coinbase lawsuit. The case is being heard in the U.S. District Court for the Southern District of New York.
The App is Broken?
Coinbase CEO Brian Armstrong has acknowledged that the Coinbase app is "broken" for user experience, particularly in relation to non-fungible tokens (NFTs), decentralized apps, and layer 2s. Armstrong made this admission during the "Onchain Summer" event on the platform's new layer-2 network Base.
He encouraged users to provide feedback to address the most important issues, promising rapid updates in the next two weeks. The most popular request so far is for a fast settlement credit card on-ramp that doesn't require a separate account. Another issue mentioned is a bug that affects the connection between Coinbase's mobile wallet and Google Chrome.
TTD Fraud🥷🏻
Twitter’s Dilema
Researchers from San Diego State University have found that Twitter Lists were used to create 95,111 scam lists from 87,617 accounts on the platform, resulting in estimated financial losses of $870,000 over one year. The researchers developed a scam detection system called GiveawayScamHunter, which identified the scam lists. Twitter Lists allow users to customise and prioritise the posts they see, but they can also be used to spread scams. The researchers reported their findings to Twitter, but 44% of the spam accounts remained active at the time of the study.
Crypto Deception by Fundsz
The CFTC has filed charges against individuals and their organisation, Fundsz, for allegedly deceiving investors with promises of high returns through cryptocurrency and precious metals trading. The defendants are accused of using a fake algorithm to entice investors and falsely portraying Fundsz as a profitable venture. They also allegedly linked the organisation to charitable initiatives to attract investors. The CFTC claims that Fundsz did not actually trade customer funds and instead relied on fabricated profits. The defendants' assets have been frozen, and a preliminary injunction hearing is scheduled for August 23. The CFTC seeks restitution for investors and financial penalties.
Zunami’s Millions
Decentralized finance (DeFi) platform Zunami Protocol suffered a hack on its liquidity pool, resulting in a loss of over $2.1 million. The attack involved price manipulation, where the hacker used a flash loan from Balancer to change the price significantly on Zunami's exchange.
The hacker then removed the liquidity and traded back, ultimately gaining 1,152 ETH. Blockchain security firms PeckShield and Ironblocks detected the attack and notified the protocol. Zunami, which promised the highest APY on the market, urged users not to buy zETH and UZD as their emission had been attacked. The investigation into the incident is ongoing.
TTD Stats📈
Just a week into its launch, and Base is setting the NFT world on fire.
Now standing tall as the third most preferred Ethereum Virtual Machine (EVM) for NFT transfers, Base is where the action is.
📊Stats Don't Lie
ERC-721 transfers on Base? Crossed 100,000 on day one and surged to 165,000 the next day. That's 14.2% of all transfers in just one day.
NFT volume game? Base has eclipsed giants like Arbitrum, Avalanche, and Optimism. Only Polygon and BNB seem to have more pep in their step for now.
🥤Coca-Cola Debuts
Base now sees Coca-Cola introducing its 'Masterpiece' NFT collection.
This digital gallery merges classic artworks such as "The Scream" with contemporary pieces from modern artists like Aket.
The 'Masterpiece' collection emphasises Coca-Cola's forward-thinking approach. Transitioning from physical to digital, Coca-Cola highlights the evolving intersection of art, technology, and global accessibility. Artist Aket notes Coca-Cola's generational impact, while Fatma Ramadan voices her pride in sharing a digital stage with diverse talents.
Launched last week, Base promises enhanced efficiency for decentralised apps. Operating atop Optimism's OP Stack software, it provides a streamlined solution, addressing Ethereum blockchain's scalability and cost challenges.
TTD Surfer 🏄
UK’s FCA has revealed that only 13% of the nearly 300 crypto companies that applied for registration with the regulator since January 2020 were approved.
Paris Hilton is determined to make her coined term "sliving" happen, as she launches a Roblox game called Slivingland.
Aragon, a framework for launching DAOs, is launching its app and protocol on Coinbase's Base blockchain.
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