Seeds of Wisdom RV and Economic Updates Friday Morning 11-22-24
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CONGRESSMAN THAT LED SAB 121 HOUSE VOTE, VOWS TO OVERTURN CRYPTO CUSTODY RULE
Earlier this year, both the House and Senate voted to overturn the SEC’s SAB 121 accounting rule that prevented banks from providing crypto custody solutions. However, President Biden used his veto so the rule still stands. Mike Flood, the Congressman that led the bipartisan House vote, has vowed to work with a new SEC Chair to ditch SAB 121 for good.
However, Flood’s work wasn’t entirely wasted. The dual votes highlighted the issue that forcing banks to put assets under custody on their balance sheet is both unconventional and affects their compliance with bank balance sheet rules.
As a result, it makes it prohibitively expensive for banks to provide crypto custody and inhibits innovation on the tokenization front.
Since then, the SEC has softened its stance a little. Banks can apply for exceptions and it has granted them. That’s not a practical solution, because banks have to consult the SEC on most deals.
“SAB 121, despite widespread opposition, works effectively as a regulation even though it never went through the normal Administrative Procedures Act process required for one,” Congressman Flood wrote.
“I look forward to working with the next SEC Chair to rollback SAB 121.” He didn’t pull his punches about SEC Chair Gensler. “Whether the chair leaves on his own or President Trump delivers his famous line on January 20, 2025, there’s an incredible opportunity for the new administration to turn the page on the Gensler era.”
“It should be no surprise that Gensler opposed the digital assets regulatory framework that passed the House earlier this year on a bipartisan basis. 71 Democrats joined House Republicans to pass this common sense framework.
Even though the Democrat-led Senate has refused to take it up, it represents a breakthrough moment for cryptocurrency and is likely to inform the work of the unified Republican government as the next Congress begins in January.”
@ Newshounds News™
Source: Ledger Insights
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CFTC COMMISSIONER URGES US CRYPTO POLICY REFORMS
The CFTC’s Summer Mersinger advocated structured crypto regulations and urged the industry to engage with the incoming US administration.
Speaking at the North American Blockchain Summit on Nov. 21, CFTC Commissioner Summer Mersinger discussed the need for standard US crypto-related policies through notice and comment regulation.
The United States Commodity Futures Trading Commission (CFTC) has played a role in implementing the current “regulation by enforcement” strategy alongside the Securities and Exchange Commission (SEC) under the outgoing administration, as evidenced by recent charges against Uniswap Labs.
Mersinger also said recent litigation against a decentralized autonomous organization (DAO) required the CFTC to seek a court verdict for entity classification. In this case, the CFTC wanted to classify the DAO as a corporation or association:
“I really started to get uncomfortable with this idea that we were kind of setting some sort of policy through our enforcement cases and through going to court. To me, how you’re going to treat an entity that’s a policy question.”
Need for regulated relief for the crypto industry
Mersinger said that while crypto entities, including decentralized finance (DeFi), are often charged under existing categories and expected to operate under the same laws, there is no provision for them to be officially registered. She added:
“This is really tricky settlements because the information we share publicly with our enforcement settlements really doesn’t offer a lot of guidance for anyone who’s trying to do the right thing.”
As a result, Uniswap tried to do the right thing but ended up attracting more charges, Mersinger said. Still, Uniswap settled with the CFTC for a “very small fine.”
Despite its small size compared with the other agencies such as the SEC, Mersinger said that the CFTC is the “ideal regulator for the cryptocurrency spot market” as it can implement major legislative changes fairly quickly without disruptions to the market.
New laws can help crypto companies fight wrongful litigation
Moreover, she supported the introduction of new laws and regulations for crypto firms despite her predominantly conservative stance:
“What we’re seeing right now is that without those laws, you have agencies like the Federal Communications Commission (FCC) who can come in and create chaos and bring charges where maybe it doesn’t fit.”
Mersinger also recommended that the crypto industry start engaging with the new administration as soon as its leadership has been identified. “Don’t be afraid to start knocking on doors on day one because I think it’s critical to start” the conversations early on, she said.
@ Newshounds News™
Source: CoinTelegraph
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🌱 THE DOLLAR GAIN MEANS WHAT? | Youtube
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Source: Seeds of Wisdom Team RV Currency Facts
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