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Does the SAB 121 vote mean anything for future cryptocurrency legislation?

Published

8 months ago

18 May, 2024

The US Senate has joined the House of Representatives in voting to repeal a controversial US Securities and Exchange Commission (SEC) accounting rule that imposed onerous capital requirements on cryptocurrency custodians. This is a big deal, considering that the so-called Staff Accounting Bulletin, aka SAB 121, was one of the few things the cryptocurrency and banking industries aligned in opposing.

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Unfortunately, however, the legislative measure is now on the desk of President Joseph Biden, who has promised to veto it in solidarity with the SEC. Although a number of high-profile Democrats, including New York Sen. Chuck Schumer, voted in favor of overturning the bulletin, Thursday’s 60-38 Senate vote failed to clear the threshold to override the presidential veto.

It’s difficult to read the tea leaves of the vote, which almost suggests some sort of realignment among lawmakers willing to pass decent crypto regulations (or at least repeal the bad ones). On the other hand, there are a number of reasons why it would make sense to abandon SAB 121, not the least of which is that the nonpartisan Government Accountability Office found that the SEC forced it without adequate congressional oversight.

Of course, Senator Elizabeth Warren, perennially hostile to cryptocurrencies, voted in favor of keeping the rule, arguing that “The unique risks of cryptocurrencies can create liabilities that seriously affect a company’s financial condition. SAB 121 simply clarifies how companies should account for such risks in their financial disclosures. However, is bipartisan support a good sign for other legislative efforts, such as the stablecoin and market structure bill under consideration?

“Sorry to be a negative here, but I don’t think D’s support for overturning the crypto accounting rule means there won’t be a veto. I think the anti-SBA vote 121 was cast because they knew the White House would have vetoed. It’s the cart, not the horse,” James Wester, director of cryptocurrencies and co-head of payments at Javelin, said on X. Apparently it’s easier to vote for something you know will ultimately lead to a showdown?

Meanwhile, Austin Campbell, an associate professor at Columbia Business School, said Thursday’s vote shows that cryptocurrencies are bipartisan. “This is an American issue, not a partisan one,” he said She said.

In any case, it is worrying how precarious cryptocurrency legislation is. A rule in which two pluralities vote, which is widely criticized by operators in the sector and has even been recalled “idiot” by experienced players like Nadine Chakar, often called one of the most important women in finance who helped found State Street Digital and who now runs DTCC’s crypto unit (and who speaks at Consensus 2024), will likely remain in place.

This isn’t just a purely academic question either, because SAB 121 – while technically “non-binding” – is already having an effect on the ability of financial institutions to enter the cryptocurrency custody industry, according to an open letter signed by the Bank Policy Institute (BPI), the American Bankers Association (ABA), the Financial Services Forum (FSF), and the Securities Industry and Financial Markets Association (SIFMA) in February.

I mean, this is a bit counterfactual, but how advanced would industries like stablecoins and interbank blockchains be if clear regulations had been written years ago? It seems trivially true that regulatory uncertainty (and, more recently, hostility) has prevented companies from experimenting with cryptocurrencies. For example, surely some large custodians would be interested in holding all that ETF bitcoin, like Fortune’s Jeff John Roberts he wrote recently.

It’s interesting that 12 Senate Democrats could come together to help vote on a harmful bill, but I’m not sure the story of SAB 121 is really that encouraging.

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AltcoinUpdates Staff

We are the editorial team of Altcoin Updates, where seriousness meets clarity in cryptocurrency analysis. With a robust team of finance and blockchain technology experts, we are dedicated to meticulously exploring complex crypto markets with detailed assessments and an unbiased approach. Our mission is to democratize access to knowledge of emerging financial technologies, ensuring they are understandable and accessible to all. In every article on Altcoin Updates, we strive to provide content that not only educates, but also empowers our readers, facilitating their integration into the financial digital age.

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How Ether Spot ETF Approval Could Impact Crypto Prices: CNBC Crypto World

Published

7 months ago

3 July, 2024

AltcoinUpdates Staff

How Ether Spot ETF Approval Could Impact Crypto Prices: CNBC Crypto World

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CNBC Crypto World features the latest news and daily trading updates from the digital currency markets and gives viewers a glimpse of what’s to come with high-profile interviews, explainers and unique stories from the ever-changing cryptocurrency industry. On today’s show, Ledn Chief Investment Officer John Glover weighs in on what’s driving cryptocurrency prices right now and how the potential approval of spot ether ETFs could impact markets.

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Miners’ ‘Capitulation’ Signals Bitcoin Price May Have Bottomed Out: CryptoQuant

Published

7 months ago

3 July, 2024

AltcoinUpdates Staff

Miners' 'Capitulation' Signals Bitcoin Price May Have Bottomed Out: CryptoQuant

According to CryptoQuant, blockchain data shows signs that the Bitcoin mining industry is “capitulating,” a likely precursor to Bitcoin hitting a local price bottom before reaching new highs.

CryptoQuant analyzed metrics for miners, who are responsible for securing the Bitcoin network in exchange for newly minted BTC. As outlined in the market intelligence platform’s Wednesday report, multiple signs of capitulation have emerged over the past month, during which Bitcoin’s price has fallen 13% from $68,791 to $59,603.

One such sign includes a significant drop in Bitcoin’s hash rate, the total computing power that backs Bitcoin. After hitting a record high of 623 exashashes per second (EH/s) on April 27, the hash rate has fallen 7.7% to 576 EH/s, its lowest level in four months.

“Historically, extreme hash rate drawdowns have been associated with price bottoms,” CryptoQuant wrote. In particular, the 7.7% drawdown is reminiscent of an equivalent hash rate drawdown in December 2022, when Bitcoin’s price bottomed at $16,000 before rallying over 300% over the next 15 months.

This latest hash rate drop follows Bitcoin’s fourth cyclical “halving” event in April, which cut the number of coins paid out to miners in half. According to CryptoQuant’s Miner Profit/Loss Sustainability Indicator, this has left miners “mostly extremely underpaid” since April 20, forcing many to shut down mining machines that have now become unprofitable.

CrypotoQuant said that miners faced a 63% drop in daily revenue after the halving, when both Bitcoin block rewards and transaction fee revenues were much higher.

During this time, Bitcoin miners were seen moving coins from their on-chain wallets at a faster rate than usual, indicating that they may be selling their BTC reserves“Daily miner outflows reached their highest volume since May 21,” the company wrote.

Among the sales of Bitcoin miners, whales and national governmentsBitcoin’s price drop in June also hurt Bitcoin’s “hash price,” a metric of Bitcoin Miner Profitability per unit of computing power.

“Average mining revenue per hash (hash price) continues to hover near all-time lows,” CryptoQuant wrote. “Hashprice stands at $0.049 per EH/s, just above the all-time low hashprice of $0.045 reached on May 1st.”

By Ryan-Ozawa.

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News

US Congressman French Hill Doubles Down on Trump’s Pro-Crypto Stance

Published

7 months ago

3 July, 2024

AltcoinUpdates Staff

US Congressman French Hill Doubles Down on Trump's Pro-Crypto Stance

US lawmaker French Hill has noted that Donald Trump will take a more pro-crypto approach than the current administration. The run-up to the presidential election has seen cryptocurrencies become an issue with lawmakers making huge statements ahead of the polls. Donald Trump has also been reaching out to the industry, making a pro-crypto case.

French Hill Backs Trump’s Pro-Crypto Stance

Republican Congressman French Hill has explained the type of cryptocurrency regulatory framework he believes Donald Trump could adopt in the country. In a recent interview with CNBC, French Hill said that the recently passed FIT21 bill is the type of regulatory framework the Trump administration will adopt in the sector.

#FIT21 passed the House with 71 Democratic votes, it’s exactly the kind of digital asset regulatory framework former President Trump would support if re-elected.

See more on @SquawkCNBC🔽 photo.twitter.com/ceTmU4LApU

— French Hill (@RepFrenchHill) July 3, 2024

THE FIT21 Bill It is intended to protect investors and consumers in the market by establishing clear rules and powers for the various regulators in the sector. According to Hill, Trump will adopt it because it directs the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) on the specific regulatory framework needed in the market.

“… for people who are innovating and starting a crypto token, a related business, custody of those assets, how to ensure consumer protection, so I think that framework is the right approach and that’s what I’m going to recommend to the President to pass, which is that we have not passed it between now and the end of this Congress.”

He also called Trump an innovative and pro-growth president in financial matters.

Cryptocurrency is going mainstream

This election cycle saw the cryptocurrency industry taking a place in mainstream issues following broader adoption across demographics. From candidates moving toward enthusiasts to recent pro-Congress legislation, cryptocurrencies have become a rallying point for officials. The U.S. regulatory landscape has been criticized for stifling growth due to frequent SEC LawsuitsThis has led executives to push for pro-cryptocurrency laws and raise money for pro-industry candidates.

David Pokima

David is a financial news contributor with 4 years of experience in Blockchain and cryptocurrency. He is interested in learning about emerging technologies and has an eye for breaking news. Keeping up to date with trends, David has written in several niches including regulation, partnerships, cryptocurrency, stocks, NFTs, etc. Away from the financial markets, David enjoys cycling and horseback riding.

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US Court Orders Sam Ikkurty to Pay $84 Million for Cryptocurrency Ponzi Scheme

Published

7 months ago

3 July, 2024

AltcoinUpdates Staff

U.S. Court orders Sam Ikkurty to pay $84M for crypto Ponzi scheme

A federal court has ordered Jafia LLC and its owner, Sam Ikkurty, to pay nearly $84 million to cryptocurrency investors after ruling that the company was operating a Ponzi scheme.

The ruling, issued by Judge Mary Rowland in the U.S. District Court for the Northern District of Illinois, follows a lawsuit filed by the Commodity Futures Trading Commission (CFTC) in 2022 after the fund collapsed.

Judge Rowland found that Ikkurty, based in Portland, Oregon, did numerous false claims on his company’s hedge funds.

These included misleading statements about his trading experience and the promise of high and stable profits. Instead, Ikkurty used funds from new investors to pay off previous investors, a hallmark of a Ponzi scheme.

The Ponzi Scheme

The court found that Ikkurty misappropriated investment funds for personal use without the knowledge of the investors. These funds were used for personal use and were reported as Fraudulent Investmentscausing significant financial losses to customers.

This non-transparent operation violated Transparency Commission regulations, which led to the imposition of a hefty fine to compensate defrauded investors and restore some public confidence in the financial system.

Judge Rowland emphasized that fraudulent activity such as this violates the law and undermines the integrity of modern financial markets. The $84 million award seeks to address the financial harm inflicted on investors and reinforce the importance of legal compliance in cryptocurrency trading.

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