Riding The Wave News Summary #23
Is the US government jumping into crypto?
Welcome to Riding The Wave. If you have questions or feedback, please reply to this email. If you are new to the Newsletter, please check out what we provide on our about page and consider subscribing. Within the Newsletter, I provide News Summaries, Weekly Status Updates, & Deep Dive Articles on Specific Topics (Ex: How do I pick which coins/tokens to buy?). More details here
News
Table of Contents
Tweets
President Biden’s Crypto Order Is a Huge Step Forward for the Industry
Elizabeth Warren Drafting Bill to Track Transactions to Private Crypto Wallets: Report
Crypto Still Isn't Helping Russian Oligarchs Evade Sanctions
Total exchange BTC inflows have been net negative since July 2021
Tweets
President Biden’s Crypto Order Is a Huge Step Forward for the Industry
President Biden’s executive order on digital asset innovation – directing federal agencies to study the industry and report on regulatory authority – is a major milestone for the industry in the United States.
If you are bullish on the long term possibilities for cryptocurrencies to transform many of the foundational services of our lives, then this recognition by the federal government of their fundamental importance can only be viewed as an affirmation of that position. The industry welcomes the open dialogue. The debate is no longer whether crypto will survive; the debate has shifted to encouraging responsible innovation and how the U.S. can maintain a leadership position in this innovation.
By directing federal agencies to study crypto, the President is acknowledging the importance of getting the regulation of this space right. Crypto is regulated today by a patchwork of directions from multiple agencies, from the IRS to the SEC to FinCEN. Some of those guidelines are vague, others are contradictory, and many of them fail to adequately set clear and consistent rules that nurture crypto innovation while protecting consumers.
The current regulatory landscape will only cause more challenges for crypto as the industry matures. Entrepreneurs and founders can’t focus on growing their business, creating jobs, and providing the best services to consumers if they’re ensnared in uncertainty. That’s why the crypto industry has repeatedly called for an open and productive conversation with government. President Biden’s executive order brings us closer to that goal.
Following this information being released Bitcoin shot up to the low $40k range above the 8 week SMA (where it will hopefully close this week). The overall language used in the order was also great in that it gave the impression that the US government isn’t aiming to crack down on crypto, kicking it out & is instead looking to embrace it.
Elizabeth Warren Drafting Bill to Track Transactions to Private Crypto Wallets: Report
The U.S. and its allies have cut off the Russian Central Bank from hundreds of billions in foreign reserves. They've removed Russian banks from the SWIFT communications network. And financial transactions between the West and Russian state actors are banned.
But some U.S. lawmakers are still concerned that Bitcoin and other cryptocurrencies can be used to bypass sanctions if the crypto industry isn't on board. Primary among them is Senator Elizabeth Warren, who says she is drafting a "new bill to ensure crypto isn't used by Putin and his cronies to undermine our economic sanctions."
According to reporting from NBC News, which broke the news, the proposal would in part "seek to make it easier to verify the identities of customers and transfers to private crypto wallets by requiring financial institutions to keep detailed records and submit reports to the Treasury Department."
Sen. Warren was one of four Democratic senators last week to press current Treasury Secretary Janet Yellen on how to ensure cryptocurrency exchanges and other service providers aren't providing Russia with a means to circumvent sanctions. In a letter to the Treasury secretary, Warren, Mark Warner, Jack Reed and Sherrod Brown noted that digital assets "allow entities to bypass the traditional financial system."
However, crypto services and exchanges provide on-ramps and off-ramps to crypto by connecting it to the traditional financial system. Major exchanges such as Coinbase and Binance contend that they are actively monitoring and complying with all applicable sanctions, thereby closing major thoroughfares to the Russian government.
I will be surprised if a blanket ban goes through on crypto, less surprised if a blanket ban goes through targetting specifically crypto exchanges from operating in Russia as that is the easiest point to block. The exception to this would be if Russia jumped heavily into crypto which would be even more surprising.
Keep reading with a 7-day free trial
Subscribe to Riding The Wave to keep reading this post and get 7 days of free access to the full post archives.