US Congress needs to take control of crypto legislation

According to Kristin Smith, CEO of the Blockchain Association, a prominent U.S. crypto industry nonprofit, the United States Congress needs to take control of crypto legislation and make it a more “open process” where the entire marketplace is looked at “comprehensively.” This recommendation comes from Smith, who serves as the president of the Blockchain Association.

During an interview with Bloomberg on February 22, 2019, Smith said that the cryptocurrency business need U.S. politicians to lead crypto legislation, despite the fact that this would make the process “extremely long.” In the meanwhile, regulators will “step in.”

Smith mentioned that despite regulators “moving very quickly,” progress on legislation is happening “behind closed doors,” implying that it is essential for more industry involvement in a “open process,” which would involve Congress. He said this to suggest that it is vital for more industry involvement in a “open process.”

Smith is of the opinion that “very particular facts and circumstances” are at the root of the problem with legislators taking the lead on legislation via enforcement actions and settlements.

She stated that it is a tough situation for Congress to be in at the present due to the fact that many people in Washington, D.C. who “were close” to the former FTX CEO Sam Bankman-Fried and FTX feel “burned” and “betrayed” over the collapse of the cryptocurrency exchange in November 2022.

Smith is optimistic that stablecoin legislation will soon be implemented in the United States because, according to Smith, Congress has been looking into it “since 2019” and “the work has been done.” She said that it “came close” to occurring the year before, just before to the failure of FTX.

She went on to say that the dangers associated with cryptocurrencies are distinct from those associated with conventional financial services, and that as a result, regulators need to spend more time looking at market regulation and “tailor to those risks.”

Smith suggested that stablecoin and “market side” regulation should be a higher priority than focusing on legislating crypto-related criminal activity, saying that public ledgers make it “much more transparent” than what we see in the traditional financial system. This idea stemmed from Smith’s assertion that stablecoins and “market side” regulation were more important than focusing on legislating crypto-related criminal activity.

This comes after the chief policy officer of the Blockchain Association, Jake Chervinsky, took to Twitter on February 15 to state that regardless of how many enforcement actions the Securities and Exchange Commission and the Commodity Futures Trading Commission bring, they are “bound by legal reality.” Chervinsky also stated that “neither” has the authority to “comprehensively regulate crypto.” This news comes after Chervinsky made these statements.

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Alabama Senator Tommy Tuberville reintroduces legislation allowing United States 401k

Tommy Tuberville, a senator from Alabama, has presented legislation that would make it possible for 401(k) retirement plans in the United States to incorporate exposure to cryptocurrency investments.

In an announcement made on February 15, Tuberville stated that the Financial Freedom Act, which he had initially presented to the United States Senate in May 2022, aimed to reverse policy from the Department of Labor directing what type of investments were allowed in 401(k) plans, including cryptocurrency investments. Tuberville had initially introduced the bill. The senator claims that the proposed legislation would prevent the Department of Labor from initiating enforcement proceedings against those who “use brokerage windows to invest in bitcoin.”

According to Tuberville, the federal government should stay out of the business of picking winners and losers in the investment game. “By passing my legislation, I will assure that everyone who receives a wage will have the monetary freedom to invest in their futures in whichever manner they see appropriate.”

Tuberville shared the news that Senators Cynthia Lummis, Rick Scott, and Mike Braun had come forward to support the legislation and became co-sponsors. Following the collapse of the cryptocurrency market and the failure of major companies such as FTX, Voyager Digital, and Celsius Network, Lummis stated in an interview that she was “very comfortable” with the idea of U.S. investors including Bitcoin (BTC) in their retirement accounts. The interview took place in December 2022.

On the 14th of February, Politico published an article stating that Florida Representative Byron Donalds intended to propose a measure with the same name in the House of Representatives on the 17th of February. Donalds and Tuberville, both of whom are members of the Republican party, might run into resistance from the Democratic side of the aisle. Democratic Senator Elizabeth Warren has in the past voiced reservations over Fidelity Investments’ ambitions to integrate bitcoin in 401(k) accounts.

The notification issued by the DOL in March 2022 cautioned individuals who had 401(k) accounts that they should “exercise extreme care” when dealing with investments in cryptocurrencies. The letter cited the possibility of fraud, theft, and loss of assets. On February 7, a notice was issued by the Office of Investor Education and Advocacy of the United States Securities and Exchange Commission (SEC), the North American Securities Administrators Association (NASAA), and the Financial Industry Regulatory Authority (FINRA), all of which issued a warning that self-directed individual retirement accounts may include cryptocurrencies as potentially risky investments.

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What the U.S. Congress Decides on Crypto Will Ultimately Overstepping their authority

The policy expert for the cryptocurrency advocacy group Blockchain Association says that despite attempts to police cryptocurrency through enforcement actions, United States financial regulators “are bound by legal reality,” and Congress will ultimately decide what regulations should be put in place for cryptocurrencies.

Jake Chervinsky, the chief policy officer of the organization, contributed his thoughts to a lengthy Twitter conversation on the topic of the current status of crypto policy on February 14.

He made the observation that the Securities and Exchange Commission as well as the Commodity Futures Trading Commission “do not have the ability to completely oversee cryptocurrency.”

Given the ideological divide that exists between the House Republicans and Senate Democrats, Chervinsky is of the opinion that a compromise on the crypto legislation is “unlikely.” He said that the Securities and Exchange Commission and the Commodity Futures Trading Commission had exceeded their powers in an effort to “get things done” without Congress.

Chervinsky issued a plea for the sector to maintain its composure in the wake of the recent flurry of action from the SEC, which he referred to as “crypto’s biggest opponent.” As an example, Chervinsky cited the SEC’s crackdown on staking services.

The settlement that the SEC reached with the cryptocurrency exchange Kraken on February 9, which forbade Kraken from ever selling staking services to consumers in the United States, has been publicly criticized by SEC Commissioner Hester Peirce.

Peirce expressed his disagreement with the majority opinion in a statement dated February 9, in which he said that regulating a growing business via enforcement “is neither an effective or equitable manner of governing” the industry.

It was proposed by Chervinsky that litigation is one method the cryptocurrency business may press for appropriate legislation. Chervinsky said that the court plays a key role in influencing policy that has been “ignored.”

Coinbase, a cryptocurrency exchange, is also the subject of an SEC investigation that is similar to the one that led to Kraken’s settlement.

A more stronger position has been adopted by Coinbase CEO and co-founder Brian Armstrong, who believes that it would be disastrous for the United States to do away with staking for cryptocurrencies.

In a tweet dated February 12, Armstrong contended that Coinbase’s staking services are not securities and said that he would “gladly defend this in court if it were necessary.”

The decisions that judges make in important cases establish new standards in the law. If such a case were to be taken before a court and the judge concluded that Coinbase’s staking services did not qualify as securities, then other cryptocurrency businesses who are in a situation comparable to Coinbase’s may utilize the precedent as part of their defense.

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Many Lawmakers and Witnesses Call for hearing exploring the crash of the crypto market

During a hearing that was called to investigate the collapse that occurred in the cryptocurrency market, the United States Securities and Exchange Commission (SEC) and Gary Gensler, the director of the SEC, came under criticism from attendees. Throughout the course of the hearing, a number of legislators and witnesses directed their criticism in this general direction.

During a hearing on February 14 titled “Crypto Crash: Why Financial System Safeguards are Needed for Digital Assets,” the ranking member of the Senate Banking Committee, Tim Scott, stated that Gensler should appear before Congress before September to discuss additional enforcement actions in the cryptocurrency space. The hearing was titled “Crypto Crash: Why Financial System Safeguards are Needed for Digital Assets.” In addition to this, Scott has been critical of the chairman of the SEC for not testifying and instead “making rounds on the morning talk shows.” The following was the focus of the hearing: “The Collapse of Cryptocurrencies and the Reasons Why Financial Systems Require New Protective Measures for Digital Assets The senator from South Carolina stated that the Securities and Exchange Commission (SEC) had not provided “the least amount of guidance,” which may have been a contributing factor to the absence of investor protection at financially struggling businesses such as FTX, Terra, BlockFi, Voyager, and Celsius.

 “to assume that the SEC has failed to take any significant preventive effort to assure that this type of catastrophic failure does not happen again” “to presume that the SEC has not made any significant attempt to prevent this from happening” “Have they just been dozing off behind the wheel despite the fact that they have every necessary piece of equipment? It would be quite beneficial if Chairman Gensler could make his way in here as soon as possible rather than later on, and deliver his views as soon as feasible.

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SEC Chair Gary Gensler Called Out by House Representatives Over FTX

The chairman of the Securities and Exchange Commission, Gary Gensler, has been criticized by two members of the United States House Financial Services Committee “regarding the timing of the charges filed against FTX founder Sam Bankman-Fried.” This criticism is based on the fact that Mr. Gensler is scheduled to appear at a hearing.

The chair of the committee, Patrick McHenry, and the chair of the Oversight and Investigations Subcommittee, Representative Bill Huizenga, stated in a notice dated February 10 that the timing of Bankman-charges Fried’s and arrest in the Bahamas raised “serious questions about the SEC’s process and cooperation with the Department of Justice.” The two congressmen requested that Gensler disclose documents and correspondence relating to SBF’s accusations that were exchanged between November 2 and February 9 from the SEC’s Division of Enforcement, his office, and between the agency and the Justice Department during that time period.

On December 13, the House Financial Services Committee was going to hold a hearing to investigate the failure of the cryptocurrency exchange FTX, and Bankman-Fried was set to speak before the committee. On the other hand, the previous CEO of FTX was taken into custody in the Bahamas in line with an extradition arrangement with the United States of America. The Justice Department has filed eight criminal charges against Bankman-Fried, one of which is for wire fraud. Additionally, the Securities and Exchange Commission and the Commodity Futures Trading Commission have each filed separate civil lawsuits against the former CEO.

In a tweet sent out on February 10, Huizenga said, “Since Gary Gensler won’t follow by his own policies to ‘come in and speak,’ the House GOP will hold him responsible.”

McHenry and Huizenga made a request to Gensler to provide the material by the 23rd of February at the latest. This week, the chair of the SEC was subjected to an increased level of scrutiny as a result of the agency’s announcement of a settlement with Kraken, in which the exchange agreed to cease providing staking services or programs to customers in the United States.

FTX CEO John Ray was the only witness at the hearing that took place in December since Bankman-Fried was unable to attend. However, the Senate Banking Committee had its own hearing on December 14 to investigate the “bubble bust” that occurred with FTX. On February 14, there will be a further hearing about the “crypto collapse” of 2022 that has been planned by the banking committee.

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Senate Banking Committee to Hold Second Hearing on Crypto Market Crash

The Senate Banking Committee of the United States Congress has planned a second hearing to investigate the effects that might result from a meltdown in the cryptocurrency market.

Sherrod Brown, the chair of the Senate Banking Committee, made a notice on February 3 stating that senators will get together on February 14 for a hearing entitled “Crypto Crash: Why Financial System Safeguards are Needed for Digital Assets.” The meeting of legislators will take place exactly two months after a hearing on December 14 in which they reviewed the failure of the cryptocurrency exchange FTX.

There are going to be some adjustments made before the Senate Banking Committee has its second hearing after the start of the 118th session of Congress, which is slated to begin soon. In the wake of Pat Toomey’s retirement, Senator Tim Scott will replace Senator Brown as the committee’s ranking member. Senator Brown will continue to serve as the committee’s chair. One of the legislative goals that Scott has set for himself is the creation of a crypto regulatory framework.

After FTX filed for bankruptcy, which affected a great number of retail investors around the United States, committees in both the House and the Senate decided to hold hearings on the matter. It is also anticipated that the House Financial Services Committee would conduct a second hearing on FTX at some point in the year 2023. At the time that this article was being published, there was no hearing listed on the agenda for the committee.

Ben McKenzie, an actor from Hollywood, Kevin O’Leary, a celebrity of the television show Shark Tank and an investor, Jennifer Schulp of the Cato Institute, and Hilary Allen, a law professor, were all witnesses at the hearing in December. Sam Bankman-Fried, the former chief executive officer of FTX, was detained in the Bahamas just before he was set to testify before the House Financial Services Committee. It is yet unknown who will take the stand at the hearing in February.

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Senate Banking Committee to Develop Bipartisan Regulatory Framework for Cryptocurrencies

Recent reports indicate that Republican United States Senator Tim Scott, who serves as the ranking member of the Senate Banking Committee, aims to build “a bipartisan regulatory framework” for virtual currencies. Senator Scott is the ranking member of the Senate Banking Committee.

In a piece that was published on the 2nd of February by Politico, it was said that Scott has prioritised the creation of a cryptographic framework as one of his primary objectives for the 118th Congress. Reportedly, he had some reservations about certain aspects of cryptocurrency, citing the failure of exchanges such as FTX — “high-profile failures resulting in lost client money” — as well as the possibility that it may be used for illegal financing. He also cited the possibility that it may be used for illegal financing.

Recent events have resulted in Scott being promoted to the position of ranking member, which was originally held by the late Senator Pat Toomey. Toomey completed the balance of his tenure in office but did not seek reelection in the following year. Toomey lent his support to a number of legislative initiatives aimed at fostering innovation in the digital asset sector, and Sherrod Brown, the committee chair, urged Treasury Secretary Janet Yellen to collaborate with financial regulators and legislators on comprehensive cryptocurrency legislation. Toomey lent his support to a number of legislative initiatives aimed at fostering innovation in the digital asset sector.

The Senate Banking Committee held a hearing in December with the purpose of reviewing the failure of FTX, which had occurred earlier in the month. When a new session of Congress starts in 2023, there is a possibility that the Committee may continue its investigation as part of that session. The House Financial Services Committee, which is now led by Representative Patrick McHenry and has the ability to hold another hearing on FTX, may also hold such a hearing at some point in the near future.

As a direct consequence of the Republican Party’s win in the House of Representatives, McHenry now has the authority to choose which topics need to be prioritised on the legislative agenda for the finance committee. It is believed that he aims to form a new subcommittee that would be focused on digital problems. This would be in response to the “vast hole” that reportedly existed in the existing committee structures.

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Senate Banking Committee to Develop Bipartisan Regulatory Framework for Cryptocurrencies

Recent reports indicate that Republican United States Senator Tim Scott, who serves as the ranking member of the Senate Banking Committee, aims to build “a bipartisan regulatory framework” for virtual currencies. Senator Scott is the ranking member of the Senate Banking Committee.

In a piece that was published on the 2nd of February by Politico, it was said that Scott has prioritised the creation of a cryptographic framework as one of his primary objectives for the 118th Congress. Reportedly, he had some reservations about certain aspects of cryptocurrency, citing the failure of exchanges such as FTX — “high-profile failures resulting in lost client money” — as well as the possibility that it may be used for illegal financing. He also cited the possibility that it may be used for illegal financing.

Recent events have resulted in Scott being promoted to the position of ranking member, which was originally held by the late Senator Pat Toomey. Toomey completed the balance of his tenure in office but did not seek reelection in the following year. Toomey lent his support to a number of legislative initiatives aimed at fostering innovation in the digital asset sector, and Sherrod Brown, the committee chair, urged Treasury Secretary Janet Yellen to collaborate with financial regulators and legislators on comprehensive cryptocurrency legislation. Toomey lent his support to a number of legislative initiatives aimed at fostering innovation in the digital asset sector.

The Senate Banking Committee held a hearing in December with the purpose of reviewing the failure of FTX, which had occurred earlier in the month. When a new session of Congress starts in 2023, there is a possibility that the Committee may continue its investigation as part of that session. The House Financial Services Committee, which is now led by Representative Patrick McHenry and has the ability to hold another hearing on FTX, may also hold such a hearing at some point in the near future.

As a direct consequence of the Republican Party’s win in the House of Representatives, McHenry now has the authority to choose which topics need to be prioritised on the legislative agenda for the finance committee. It is believed that he aims to form a new subcommittee that would be focused on digital problems. This would be in response to the “vast hole” that reportedly existed in the existing committee structures.

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US senators write to Silvergate Capital for answers on FTX collapse

It has been reported that a number of senators from the United States have sent a letter to Silvergate Capital, which is the parent business of Silvergate Bank, in which they ask for explanations regarding the failure of the cryptocurrency exchange FTX.

According to a report that was published on the 31st of January by Bloomberg, several senators from the United States, including Elizabeth Warren, Roger Marshall, and John Kennedy, claimed that Silvergate did not answer all of their questions in response to a letter that was sent in December regarding the company’s alleged role in handling FTX user funds. According to the reports, Silvergate cited limits on the disclosure of “secret supervisory information,” which the senators deemed to be an unsatisfactory justification.

According to Bloomberg, the letter states that “Both Congress and the public need and deserve the information necessary to understand Silvergate’s role in FTX’s fraudulent collapse.” This is especially true when considering the fact that Silvergate turned to the Federal Home Loan Bank in 2022 as its lender of last resort. “Both Congress and the public deserve the information necessary to understand Silvergate’s role in FTX’s fraudulent collapse.”

The names of Warren, Marshall, and Kennedy were signed onto a letter dated 2022 that gave Silvergate until December 19 to present Congress with explanations about its role in the FTX scandal. However, according to reports, the senators said that the company had omitted critical information that was essential to evaluate Silvergate’s participation in the alleged fraud committed by FTX. This included whether or not the company improperly managed the transfer of FTX customer assets to Alameda.

After the liquidity crisis and bankruptcy filing of FTX in November 2022 — and prior to the arrest of former CEO Sam Bankman-Fried — Senator Sheldon Whitehouse and Senator Elizabeth Warren called on the Justice Department to investigate the collapse of the cryptocurrency exchange and consider prosecuting certain individuals for their roles in the incident. In the most recent letter, Silvergate was given a deadline of February 13 to respond, during which time they were required to comment on the company’s due diligence procedures.

After Republican lawmakers in the House of Representatives were unable to come to an agreement for days to elect the next speaker, which delayed committee assignments and legislation, members of Congress have begun organising for their 118th session. This comes after Republican lawmakers in the House of Representatives were unable to elect the next speaker. In December, lawmakers of the Senate and the House of Representatives held hearings to investigate what led to the collapse of FTX, and leadership indicated at the time that the probe would continue in 2023.

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U.S. President Joe Biden’s administration released a statement on Jan 27

On January 27, the White House published a statement in which it presented the administration of United States President Joe Biden with a road plan for addressing the risks associated with cryptocurrencies. The road plan was supplied by the White House. The White House is responsible for releasing the statement. A sizeable amount of the information that was sent to the Congress of the United States of America was handled by the legislative help that was offered by the administration.

The authors of the declaration proposed a plan for advancing that was divided into two components in order to accomplish their goal. They wrote: “We have spent the last year examining the risks associated with cryptocurrencies and working to minimise those risks by making use of the power that the Executive Branch has.” This pertains to the last year and a year’s worth of months.

In September of 2022, the government will release what will be known as the “first-ever” comprehensive framework for the creation of digital assets. This component of the road plan will be the first one to be implemented. The reports that were needed by the presidential executive order that was announced in March 2022 and was named “Ensuring Responsible Development of Digital Assets” were used to produce this document, which was then posted for public consumption.

Second, executive agencies are increasing the amount of work they put into enforcement and are publishing revised rules. “to help customers in better appreciating the dangers involved with acquiring cryptocurrencies,” the statement states that government organisations are in the midst of establishing public awareness programmes. It focused primarily on bank regulators and asked them to keep up their level of action since they were the target of the attention. The announcement was issued on the same day that the Federal Reserve made the decision to reject the application of the digital asset Custodia Bank to join the Federal Reserve System.

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