Crypto implosion has states scrambling: Here are six crypto bills to watch
Several US states are working on new legislation to regulate the cryptocurrency industry, as Congress has yet to pass comprehensive federal crypto legislation. Some states are seeking stricter rules for the industry after high-profile collapses, while others are looking to make it easier for decentralized autonomous organizations (DAOs) to incorporate. The lack of federal regulation has resulted in a mixed bag of state-level legislation, with some states being overly antagonistic towards crypto while others are generally supportive. States are taking action to protect their constituents, with New York proposing stricter regulations, Florida passing a bill to ban central bank digital currencies, California creating a legal framework for DAOs, and Texas considering a bill to require exchanges to show proof of reserves. Additionally, Illinois has rolled out two bills aimed at protecting residents from financial fraud and abuse and establishing regulatory oversight of cryptocurrencies, while New Jersey is looking to create its own regulatory framework for cryptocurrency-focused businesses. These bills could have a significant impact on decentralized finance projects.
New York Attorney General proposes "strongest and most comprehensive set of regulations on cryptocurrency in the nation"
New York Attorney General Letitia James has proposed new regulations aimed at making the cryptocurrency industry more transparent and accountable. The proposed Crypto Regulation, Protection, Transparency, and Oversight Act (CRPTO Act) would give the New York State Department of Financial Services (DFS) more authority to regulate the industry, with a focus on conflicts of interest, transparency, and investor protections. The bill draws on existing regulations in traditional finance and aims to prevent behavior like that of defunct crypto lender Celsius and Terraform Labs. However, some experts have raised concerns about the effectiveness of the proposed rules and the potential for state-by-state regulation to create an uneven playing field.
US House of Representatives Considers Need for New Rules on Crypto and Digital Assets
A recent joint committee hearing in the US House of Representatives revealed a consensus on the need for new regulations for digital assets, but also highlighted differences in opinions on what those policies should entail. Despite challenges, industry advocates and crypto holders may be encouraged by the urgent desire to act from senior members of both political parties. Republican chair of the House Financial Services Committee, Rep.
Argentina's Central Bank Tightens Grip on Crypto Transactions, Prohibiting Some Companies from Certain Activities
Argentina's central bank has issued new guidance that prohibits registered payment service providers from carrying out or facilitating operations with digital assets that are not regulated and authorized by the central bank. The rules appear to target "automatic purchase buttons," and interested users who want to conduct such transactions "should do it on their own accord." The central bank said that the new measure aimed to "mitigate the risks that operations with these assets could generate for users of financial services and the national payment system."
Former SEC Official Urges U.S. Regulators to Ban Tether USDT, Calling It a "Mammoth House of Cards"
Former U.S. Securities and Exchange Commission (SEC) official John Reed Stark has called for a ban on crypto firms offering Tether USDT, describing the stablecoin issuer as a "mammoth house of cards." Stark highlighted concerns over Tether's unaudited reserves and lack of regulatory oversight, stating that the stablecoin issuer could be the next domino to fall. He also criticized Tether's attestation, stating that it cannot replace an audit and leaves more questions about its reserves. Stark urged the U.S. to follow Ontario's lead in banning crypto platforms from offering Tether USDT.
Biden Calls for End to Tax Loopholes for Wealthy Crypto Investors, Citing $18B in Lost Revenue
President Joe Biden has called for an end to tax loopholes that benefit wealthy crypto investors, citing that these loopholes have cost the government around $18 billion in revenue. Biden's proposed tax plan is part of his recently proposed fiscal year 2024 budget, which has not received support from Republican opposition in the US House.
US congressional committees hear from legal experts and former regulator on digital asset regulation
Top legal officers and a former regulator will testify in front of US congressional committees on Wednesday to discuss digital asset regulation. The House Financial Services Subcommittee on Digital Assets, Financial Technology and Inclusion and the House Agriculture’s Commodity Markets, Digital Assets and Rural Development subcommittee will hear from Kraken’s Chief Legal Officer Marco Santori and former Commodity Futures Trading Commission Chair Timothy Massad. Santori plans to explain how regulators can improve their regulation of crypto, while Massad is calling for Congress to direct the Securities and Exchange Commission to develop joint rules for regulating crypto. Other witnesses include Andrew Durgee, Matthew Kulkin, and Daniel Schoenberger, who will discuss the risks of falling behind other countries due to the lack of clear and supportive regulation in the US.
Brazil's Central Bank Blocks Crypto Firms from CBDC Pilot Participation
The Central Bank of Brazil has excluded crypto companies from participating in its central bank digital currency (CBDC) pilot. Although the bank did not explicitly exclude crypto firms, it requires all participants to be registered and regulated finance or fintech providers, which excludes crypto companies as they are not currently regulated under Brazilian law. The bank aims to launch its CBDC later this year and is looking for firms with experience in the Ethereum Virtual Machine (EVM) and distributed ledger technology (DLT) to test transactions involving the digital real. The bank will select 10 firms to participate in the pilot, and the deadline for applications is May 12.
Coinbase Chief Legal Officer Pushes Back Against SEC's Proposed Custody Rule Changes
Coinbase's Chief Legal Officer, Paul Grewal, has voiced his opposition to the U.S. Securities and Exchange Commission's (SEC) proposed revisions to federal custody requirements. The proposed rule would require registered investment advisers (RIAs) to hold client assets at qualified custodians. Coinbase has submitted its comments regarding the proposed rule, disagreeing with the SEC's proposition to shift the types of banks allowed to serve as qualified custodians. Coinbase also believes the proposal requirement by the SEC for RIAs to maintain possession or control of client assets at all times is unjustified.
Bank of England’s Fintech Director Discusses Privacy and Anonymity in Relation to Potential Digital Pound
Tom Hutton, the Bank of England's director of fintech, discussed the UK's plans for a central bank digital currency (CBDC) at the Financial Times Cryptocurrency and Digital Assets Summit in London. Hutton emphasized the importance of privacy in the digital pound, but clarified that anonymity should not be a feature. He also stated that the digital pound would not be interoperable with cryptocurrencies, as they do not fulfill the functions of money. The Bank of England has not yet announced a launch date for the digital pound, but has suggested that it may be needed in the future.
