Tag: United States

Alabama Senator Tommy Tuberville reintroduces legislation allowing United States 401k

by Blockchain News

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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El Salvador is Opening a Bitcoin Embassy in the United States

by Blockchain News

The nation of El Salvador is creating a “Bitcoin Embassy” in the United States, making it the first government in the world to do so. Bitcoin (BTC) is the most popular cryptocurrency in the world.

In 2021, El Salvador became the first nation in the world to recognize bitcoin as a form of legal cash. Now, the country is extending its Bitcoin strategy via a new cooperation with the government of Texas. The intergovernmental partnership intends to establish a Bitcoin Embassy, also known as El Salvador’s representative office, in Texas in order to collaborate on the development of new initiatives that seek to increase Bitcoin use.

Milena Mayorga, the Salvadoran Ambassador to the United States, broke the news in a message on Twitter on Feb. 14.

“During my meeting with the assistant secretary of the government of Texas, Joe Esparza, we discussed the opening of the second Bitcoin Embassy as well as the expansion of commercial and economic exchange projects,” Mayorga said. “We also discussed the expansion of commercial and economic exchange projects.”

The most recent Bitcoin project was launched only a few months after El Salvador established the world’s first Bitcoin Embassy in the city of Lugano, which is located in the southern region of Switzerland, in October 2022. As a part of these efforts, the two pro-crypto jurisdictions have begun working toward the establishment of a physical governmental presence in order to foster collaboration in education and research institutes relevant to Bitcoin.

Samson Mow, who formerly served as the chief strategy officer at Blockstream, believes that the phenomenon of Bitcoin embassies is the next phase in the process of countries and cities embracing Bitcoin. According to what he mentioned, such projects need collaboration across nations in order to launch new initiatives such as forming alliances amongst locations that have accepted Bitcoin.

The announcement comes at a time when it is being claimed that state legislators in Texas are exploring a new measure that would require “a master plan for the growth of the blockchain business.” The legislative initiative’s overarching goal is to make Texas the cryptocurrency capital of the United States by, among other things, making purchases using Bitcoin exempt from sales tax.

As was previously reported, Texas has emerged as one of the crypto-friendly states in the United States. This is due to the state’s passage of crypto-friendly legislation, which seek to better adapt commercial laws to the innovation brought about by blockchain and to digital asset regulations. Major mining businesses like Riot Blockchain, Core Scientific, and Genesis Digital Assets all have operations in the state of Texas. As a result, Texas is home to some of the most powerful Bitcoin miners in all of North America.

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

by Blockchain News

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

by Blockchain News

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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SEC Chair Gary Gensler Warns Crypto Companies

by Blockchain News

After the United States Securities and Exchange Commission revealed that it had reached a settlement with the cryptocurrency exchange Kraken, the chair of the SEC, Gary Gensler, issued a warning to crypto businesses, urging them to “come in and respect the law.”

During an appearance on CNBC’s Squawk Box on February 10, 2018, Gensler said that cryptocurrency exchanges should register with the SEC in order to be in compliance with rules in the United States. He claimed that many participants in the business were “choosing” not to do so. The head of the Securities and Exchange Commission (SEC) said that the business models of many cryptocurrency projects were “rife with conflict,” and that these projects needed to “disentangle” their bundled goods.

According to Gensler, “time-tested norms and laws to safeguard the investing public” are necessary for the industry to have any hope of surviving and thriving in the future. “Don’t put your hand in the customer’s wallet by utilizing their money for your own platform,” the sales pitch advised.

After the SEC announced that it had reached a settlement with Kraken, Gensler made his statement. As part of the settlement, Kraken agreed to pay $30 million in disgorgement, prejudgment interest, and civil penalties. Additionally, the exchange agreed to cease offering its staking services and programs to customers in the United States. Kraken said that it will keep providing staking services for customers located outside of the United States via a different business.

There has been a lot of backlash to the settlement that the SEC reached because many people see it as regulators taking action against companies that need to navigate a regulatory landscape that does not have clear standards. Hester Peirce, a commissioner for the SEC, said that the staking program had “served individuals well” and that the SEC’s actions might be described as “lazy and patronizing.”

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Mississippi State Senate Passes Bill to Protect Crypto Miners

by Blockchain News

The Mississippi Digital Asset Mining Act was approved by the state senate on February 8, 2019, bringing the state of Mississippi, which is located in the United States, one step closer to safeguarding the rights of cryptocurrency miners. There is a parallel measure that is now being deliberated upon in the house of representatives of the state.

Home mining of digital assets and the operation of mining firms in areas designated for industrial use are both made lawful by a measure proposed in the state Senate and sponsored by State Senator Josh Harkins. The state of Mississippi, which has among of the cheapest rates for residential power in the United States, is already home to cryptocurrency miners. The measure, on the other hand, said that “Digital asset mining has frequently met regulatory obstacles at the state and municipal level.”

In addition, the bill prohibits imposing requirements on miners that are greater than those locally applied to data centers; changing the zoning of a mining center without proper notification and an opportunity to appeal; limiting noise from home mining beyond existing limits; and limiting noise from home mining beyond existing limits. It makes it illegal for the Public Service Commission to impose discriminatory charges on mining companies and exempts home and business miners from the requirements that apply to money transmitters.

Additionally, the measure offers a legal definition of the term “virtual money” for use inside the state.

The Satoshi Action Fund has been active in Mississippi, among with other states throughout the country. During his presentation before the Mississippi Senate Finance Committee in January, the chief executive officer of the fund, Dennis Porter, brought up the possibility that cryptocurrency miners may exploit abandoned oil and gas wells as a source of electricity.

Orphan wells are mentioned in both the senate bill and the house version. In accordance with the provisions of the house bill, a state Digital Asset Mining Council would be established. During the course of the year, its members would deliberate on matters like the viability of using the wells as a source of electricity for mining operations. The Ways and Means Committee voted in favor of passing the house bill, but the measure has not yet been addressed on the house floor.

The measure proposed in Mississippi stands in stark contrast to the two-year ban on cryptocurrency mining that was approved in New York in November and subsequently signed into law.

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Kraken Agrees to Cease Staking Services for U.S. Clients

by Blockchain News

The United States Securities and Exchange Commission and the cryptocurrency exchange Kraken have come to an agreement that will result in Kraken no longer providing staking services or programs to customers located in the United States.

The Securities and Exchange Commission (SEC) stated in a press release dated February 9 that it had filed charges against Kraken for “failing to register the offer and sale of their crypto asset staking-as-a-service program.” According to the SEC, these programs qualify as securities and fall under its jurisdiction. The cryptocurrency company has come to an agreement wherein it will pay $30 million in disgorgement, prejudgment interest, and civil penalties, and will also stop offering its staking service to consumers in the United States.

“Kraken not only offered investors outsized returns untethered to any economic realities, but it also retained the right to pay them no returns at all,” said Gurbir Grewal, director of the SEC’s Division of Enforcement. “Kraken offered investors outsized returns untethered to any economic realities.” “During this whole time, it gave them no insight whatsoever into, among other things, its financial status or whether or not it even had the wherewithal to pay the promoted returns in the first place,”

According to the complaint filed by the SEC, Kraken has been promoting its cryptocurrency staking services as a “easy-to-use platform and advantages that arise from Kraken’s efforts on behalf of investors” since 2019 when it began selling such services to consumers in the United States. However, according to the commission’s allegations, Kraken customers essentially lost ownership of their tokens when they offered them to the staking program. This exposed them to further risk and provided “very little security” for their investments.

In a blog post dated February 9, Kraken said that it will continue to provide staking services for customers located outside of the United States via a different business.

After authorities from the Internal Revenue Service petitioned the U.S. District Court for the Northern District of California to enable it to issue summonses trying to gather information on Kraken users, the Securities and Exchange Commission reached a settlement with the company and announced it. The document that was filed in court on February 3 states that Kraken did not answer to a similar summons that was given in May 2021.

In the lawsuit that took place in 2021, the cryptocurrency exchange had been asked to produce information on individuals who had carried out the digital currency equivalent of $20,000 in transactions over the course of a single year between 2016 and 2020. Officials from the United States said that Kraken “failed to comply with the summons” and did not deliver the “books, documents, papers, and other material” that were demanded of them.

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The U.S. government’s regulatory strategy towards crypto firms

by Blockchain News

According to Nic Carter, co-founder of venture firm Castle Island and crypto intelligence firm Coin Metrics, the alleged strategy involves isolating the traditional financial system from the cryptocurrency market by relying on “multiple agencies to discourage banks from dealing with crypto firms.” The goal of this strategy is to lead crypto businesses to become “completely unbanked.” This strategy is aimed at isolating the traditional financial system from the cryptocurrency market.

“Regulators intimidate and blackmail bank leadership behind the scenes, and then they produce public “advice” underlining that banks are still free to hold cryptocurrencies or serve cryptocurrency customers. In point of fact, they are not at all free to act in this manner in any way.

A joint statement was issued on January 3 by the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency warning about the risks of banks engaging in crypto and encouraging them to refrain from doing so due to “safety and soundness” concerns. This event is among other recent regulatory developments. In the same month, Binance made the announcement that it will no longer execute any U.S. currency transactions that were less than $100,000 owing to a new policy implemented by Signature Bank.

Signature Bank made the announcement in December 2022 that it intended to restrict the number of cryptocurrency services it offered, refund clients’ monies, and cancel their accounts. Due to liquidity concerns caused by the bear market and the collapse of FTX, the bank is said to have borrowed almost $10 billion from the United States Federal Home Loan Bank System in the last quarter of 2022.

“Banks are reconsidering whether or not it is worthwhile to continue providing these services in light of the potential risks.”

According to comments made by the CEO of Coinbase, Brian Armstrong, on Twitter, another focus for United States authorities seems to be the prohibition of crypto staking services for retail consumers. Staking is a method that enables investors in cryptocurrencies to place their digital assets under the control of a smart contract in return for incentives and passive income.

The methods used by the authorities in the United States are not novel. Operation Choke Point was a regulatory program that was implemented by the federal government in 2013 and targeted a range of “high-risk” sectors in addition to increasing the level of oversight of financial institutions that provide services to these types of companies.

Influences on crypto companies

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Former Coinbase Product Manager Seeks to Dismiss SEC Charges of Insider Trading

by Blockchain News

A former product manager at the cryptocurrency exchange Coinbase has made a formal request to have the allegations of suspected illegal insider trading dropped against them. Since the tokens that are being alleged to have been traded by him are not securities, his legal team believes that the charges should be dismissed as groundless. The fact that this is the case is the primary justification for dismissing the charges.

Ishan Wahi, a former employee of Coinbase, and Nikhil Wahi, his brother, are both being represented by attorneys who, on February 6, filed a motion in the United States District Court for the Western District of Washington requesting that the charges brought against them by the Securities and Exchange Commission be dropped. Ishan Wahi is also being represented by his brother, Nikhil Wahi. Nikhil Wahi is also being represented by attorneys. Attorneys are also defending Nikhil Wahi’s interests in this case. Ishan Wahi was a member of the Coinbase team in the past.

The SEC filed charges of insider trading against the brothers and their associate Sameer Ramani in July of last year, alleging that the three of them made $1.1 million using Ishan’s tips on the timing and names of tokens in upcoming Coinbase listings. The SEC filed these charges against the brothers and their associate Sameer Ramani. These allegations were brought against both of the brothers as well as their colleague Sameer Ramani by the SEC. Additionally, allegations were made against Sameer Ramani that he engaged in insider trading.

The attorneys prepared a report that was more than 80 pages long and in it they described the many ways in which the SEC’s statements were “incorrect.”

They stated that the bitcoins that were supposedly sold by the Wahi family did not satisfy the legal definition of a security since they did not have a “investment contract written or inferred.” This was the basis for their argument. To put it another way, there was neither a written nor an inferred agreement between the parties to invest in the bitcoins. Instead, they compared bitcoins to collectibles like baseball cards and stuffed animals, like stuffed animals and stuffed animals.

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Property linked to FTX customer funds pulled from market

by Blockchain News

According to a story in the Wall Street Journal, the seller of a property that was tied to Sam Bankman-political Fried’s expenditures removed the property off the market as a demonstration of “good faith” after discovering that the property was linked to FTX customer money.

The townhouse, which can be found in the Capitol Hill neighbourhood of Washington, D.C., just a few blocks away from the United States Capitol, is owned by Guarding Against Pandemics, a charitable organisation that was founded by Gabriel Bankman-Fried, the brother of the former CEO of the stock exchange that went bankrupt.

In documents submitted to the court in January by FTX’s new management, the company said that client cash had been improperly used to acquire the property for $3.3 million. The listing for the property was removed by Guarding Against Pandemics after it was brought to the attention of several media outlets by the real estate agent.

The Wall Street Journal was informed by a spokeswoman for Guarding Against Pandemics that Gabriel is no longer affiliated with the group. The creditors of FTX have only recently sent subpoenas against Bankman-mother, Fried’s Barbara Fried, and Gabriel, alleging that they did not answer to prior information demands and demanding that they provide certain papers.

According to the property records, the charitable organisation attempted to sell the property to lobbyist Mitch Bainwol and his wife, Susan Bainwol, for the same sum that it paid for the property in April of 2022.

The three-story property has a total area of 4,100 square feet, four bedrooms, and was purportedly being used as an office by the group, with workstations being set up in a variety of rooms across the building. The real estate business that was in charge of the listing organised a few open houses; nevertheless, they did not get any bids to buy the property.

Prosecutors in the United States are looking into the contributions that FTX made to various political parties and politicians. With a contribution of $5.2 million, Bankman-Fried ranked as the second-largest “CEO donor” to Joe Biden’s presidential campaign for the year 2020. A few days before the midterm elections in November 2022, he acknowledged to being a “major contributor” to both of Washington’s political parties. These elections were for the House of Representatives and the Senate.

Since the bankruptcy petition was filed on November 11, the new management team of the exchange has been hard at work trying to locate cash with which to repay the exchange’s creditors. Andy Dietderich, an attorney for FTX, said that as of the beginning of the year, the exchange had “recovered $5 billion in cash and liquid cryptocurrency.”

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