As we noted two days ago in Will Congress Finally Do Its Job?, the operator of the world’s largest cryptocurrency exchange, Binance, pleaded guilty and agreed to pay $4.3 billion to resolve the Justice Department’s investigation into violations related to the Bank Secrecy Act, failure to register as a money transmitting business, and the International Emergency Economic Powers Act. Additionally, Binance’s founder and CEO, Changpeng “CZ” Zhao also pleaded guilty to failing to maintain an effective anti-money laundering (AML) program, resigned as CEO of Binance and personally paid a $50 million fine to the Commodity Futures Trade Commission (CFTC) for “intentionally sabotaging and subverting Binance’s superficial compliance controls, including controls designed…
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Will Congress Finally Do Its Job?
The executive and judicial branches have filled the legislature’s crypto void – but this could end in 2024
Congress seems drugged and inert most of the time. Even when the problems it ignores build up to crises and erupt in strikes, riots, and demonstrations, it has not moved. Its idea of meeting a problem is to hold hearings or, in extreme cases, to appoint a commission. – Representative Shirley Chisholm, writing in her book Unbought and Unbossed The U.S. Constitution vests in Congress the power to create laws and in the executive branch the responsibility of implementing and enforcing those laws, while the judicial branch interprets laws and assures they do not violate the Constitution. This vaunted system of checks and balances is designed to ensure a…
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Crypto’s Illness: Regulatory Reluctance
Pending court decisions challenge SEC’s failed ‘regulation by enforcement’ strategy
The U.S. crypto industry has been learning a rough lesson in regulatory compliance in the past few months. With fines, cease and desist orders, agency warnings, and traditional finance counterparties withdrawing from the industry, it is becoming increasingly apparent that crypto has a compounding problem. Press play to hear a narrated version of this story, presented by AudioHopper. The origin of this isn’t FTX, Voyager Digital, Terra Luna, or any other of the business failures or frauds of 2022. Those are symptoms of another disease. The sickness that’s causing crypto to fumble in front of U.S. regulators and counterparties goes all the way back to the founding principles of Bitcoin…
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U.S. Senator Cynthia Lummis speaking at the 2021 Young Women's Leadership Summit at the Gaylord Texan Resort & Convention Center in Grapevine, Texas, June 11, 2021. (Photo: Gage Skidmore)Sens. Lummis and Gillibrand Issue Serious, Thoughtful Crypto Proposal
Responsible Financial Innovation Act isn’t perfect, but it’s a hell of a start
On Tuesday, Senators Kirsten Gillibrand (D-NY) and Cynthia Lummis (R-WY), introduced the Responsible Financial Innovation Act, aimed at — finally— creating a real regulatory framework for digital assets. The senators stated in their press release that the goal of the legislation was to encourage “responsible financial innovation, flexibility, transparency and robust consumer protections while integrating digital assets into existing law.” This is a laudable goal. And painfully overdue. But as with any legislation—especially a groundbreaking bill in a fast-changing part of technology—it’s very tough to assess this proposal’s strengths. We read the entire 69-page bill. And there’s even a helpful 6-page summary. To our eyes, this proposed legislation is a rock-solid…
