35 Burst results for "Cftc"
CryptoCompare
Market Analysis Report 09 Mar 2023
"10 a.m. Thursday March 9th 2023 market analysis report March 9th, 2023. Silvergate bank to wind down operations CFTC chair says stablecoin and ether are going to be commodities coinbase announces wallet as a service offering.
Crypto Briefing
SEC and CFTC Charge FTXs Nishad Singh
"4 p.m. Wednesday, March 1st, 2023. SEC and CFTC charge FTX, Nisha Singh. FTX chief engineer, Nisha Singh, was hit with lawsuits from both the SEC and the CFTC shortly after pleading guilty to 6 criminal charges yesterday. Aiding and abetting fraud another
CoinDesk Podcast Network
Crypto's Center of Gravity Is Shifting Away From the U.S.
"All right guys, well today we have an interesting theme. And we're going to spread this out over a couple of pieces, and I think a good way to kick it off is to point to a tweet which really deserves the visual, but it's from Brian quintessence of former CFTC commissioner who's now at andreessen Horowitz, and he shared a chart put together by electric capital that is the percentage of all of the world's crypto developers who are in the U.S.. The proportion of the developers in the U.S. has steadily declined year over year. In 2017, it was around 42% in 2018. It was around 39% in 2019. It was around 36% in 2020, it was around 33% in 2021. It was around 31%, and in 2022, it was around 28%. Now, I don't think there's anything wrong with developers coming from all over the world, and the best way to read this chart or the most hopeful way to read this chart would be that other developers from other places got in the game. However, I think, as you'll see from our topic today, that there might be something else going on, and certainly that was the point that Brian was trying to make. The comment that he added to the chart was this. For Gary gensler, this is what success looks like. The point of course is the U.S. seems to be determined to push crypto offshore, and that is the theme of the conversation today. So we're going to start with a piece by Noel atchison who used to be the head of research at coindesk and genesis trading that's called the future of crypto markets will be driven by developments in the east. Crypto investors need to keep an eye on geopolitical shifts playing out on the regulatory landscape, specifically some upcoming changes in Asia. Noelle writes, as political experts focus on the diplomatic dance and building tensions between the United States and China, punctuated by some balloon shaped comic relief that might end up not being so funny after all, a more benign battle is brewing in the halls of financial regulators. While local for now, nothing stays local for long and global markets. The potential ramifications go well beyond crypto markets, potentially shaping economic influence that. In this changing landscape, is more geo strategically important than ever. Earlier this week, Hong Kong securities and futures commission or SFC published a proposed text of its upcoming crypto regulations, slated to go into effect on June 1st, and opened it up for public comment. Its scope includes the licensing for crypto asset service platforms, which were originally only going to be allowed to service accredited investors. The SFC is now seeking input on whether or not retail investors should also be allowed to participate, and what types of protection should be in place. Also open for discussion as the range of quote unquote approved assets, which in principle would only include a limited selection of the most liquid tokens.
The Breakdown
FTX Ex-Engineering Chief Pleads Guilty to Criminal Charges
"Yesterday the news tightened around sand bagman freed even further as yet another of FTX most senior execs turned against him. Former head of engineering at FTX nishad Singh pled guilty to criminal fraud charges and agreed to assist prosecutors in their case against SPF. As part of his agreement, single plead guilty to one count of wire fraud, three counts of conspiracy to commit fraud, what count of conspiracy to commit money laundering, and one count of conspiracy to defraud the United States by violating campaign finance laws for a total of 6 counts. Now in separate civil actions, singers agree not to contest fraud complaints from the SEC and the CFTC. The SEC will be asking for a ban on sing asking as a corporate officer or director, which will be subject to court approval. This is in line with previous plea agreements from other FTX co-conspirators, Carolyn Ellison, and Gary Wong. In a statement sings lawyers said quote, shot is deeply sorry for his role in this and is accepted responsibility for his actions. He wants to do everything he can to make things right for victims, including by assisting the government to the best of his ability in this case. Now, nashad turning on Sam has seemed kind of like a foregone conclusion. Ever since we got that conversation that Sam had with the vox reporter that he thought was off the record where he said that nashad felt really terrible really genuinely terrible about all this, whereas Sam kind of made clear that he didn't. Now Singh was released on a $250,000 bond to await sentencing and his was so much lower than Sam's bond because as prosecutors said, Singh had traveled back from The Bahamas voluntarily in November shortly after the collapse in part to assist with Justice Department investigations.
CoinDesk Podcast Network
Judge Denies Bankman-Fried's Bail Modification Proposal
"U.S. judge rejects bankman freed's bail modification request. So there's a couple different things happening. Also, his attorney lawyer says agreement has been reached on use of messaging apps plus other news. Prosecutors have asked that civil fraud cases brought by the SEC and the CFTC against SB FB postponed until after the criminal case against him has concluded. So again, we have the FTX international chapter 11 bankruptcy. I believe in somebody please fact check out these court cases, 'cause I can't keep up. And then we have the civil fraud cases, and then I think another case brought against him, I don't know. But anyway, legal team and prosecutors asked the court to modify SBS a bail conditions on using electronic communication, ask them to modify so he can make voice calls, FaceTime calls, zoom, audio, video calls, and use iMessage plus what's app for WhatsApp his cell phone must have monitoring software installed to record these messages and just in a judge rejected the joint request to modify his bail conditions to allow him to use these messaging apps Jen help me, please, there's too many cases going on with this. I can't keep up. I feel like I missed at least 7 cases or counts or I don't know. I know. There are so many cases. I think the main takeaway here though is that they're filing that the criminal case goes first because the findings in the criminal case will most likely inform what happens in all of the civil cases. So that's what they're asking the judge for. What I think is funny is the specificity of the apps that he can not use according to the judge. So that's FaceTime zoom. I message email, Facebook Messenger, and WhatsApp. I would like to note that Twitter is not included in here, and neither are Twitter DMs. And I would just like to lobby that that is taken away from this man, along with the blog, I will use every opportunity to say that on this show, and maybe I need to be fact checked by Zach, but just let me say quickly before I pass it off to you, Zach. I want to point out that both sides asked for him to be allowed to use this. And I think that the prosecution is gathering evidence every time he talks every time he writes a blog post every time he says something that goes against what he said in the past.
The Breakdown
White House Publishes 'Roadmap' to Mitigate Cryptocurrency Risks
"All right guys, so like I said today is a fallout day. This year was always going to be a tough one following up the institutional failures and frauds of last year and we are definitely seeing that across a number of different stories. And where we'll start is with The White House. Last week, The White House published a note entitled road map to mitigate cryptocurrencies, risks. It was co signed by the national economic council director, The White House office of science and technology policy director, the council of economics advisers chair, and the national security adviser. The note walked through the tumultuous events of last year and reflected on what has been done since the Biden administration's landmark crypto executive order in March of last year. It also laid out the work that still needs to be done to improve regulatory safeguards for the industry. The note pointed out that agencies ranging from the SEC and the CFTC through the FDIC, have increased enforcement efforts surrounding industry issues. It also noted the recent joint guidance issued by banking regulators that focused on the need to separate crypto assets from the broader banking system. Now regarding things that still need to be done, the administration says that they will be issuing a statement on priorities for digital assets research and development shortly, which will focus on the need to provide consumer protection by default.
Thinking Crypto News & Interviews
"cftc" Discussed on Thinking Crypto News & Interviews
"Specifically about the CFTC and situations that they've had with tornado cache as well as okie Dow. What are your thoughts on how the CFTC has been handling those situations? Yeah, so I think privacy preserving software, I think, is going to be not it's going to be a place where there's going to be a lot of discussions happening around what the best approach is that both respects the law as it currently is from a sanctions regime perspective as well as the law as it exists around respecting people's privacy. And I'm of the view that I think privacy preserving software is critical. And I actually think, and I think we think it can have a huge benefit to dissuading bad actors from committing cybercrimes and trying to steal value. If they know it's going to be very, very difficult to identify who people are. And a lot of those assets aren't necessarily in one specific honeypot. There are a lot of advantages that that can have to deterring illicit finance activities and deterring cyber theft. On the okie Dow case, I mean, I think we'll have to see how that evolves. I mean, it is ongoing, it is an ongoing court case. I think a lot of the claims in the complaint that the CFTC filed against the okie Dow did not have significant legal justification to them. They were not satisfactorily explained. I think they made a lot of. Statements without support. And have just recently filed for a default judgment because no one from the okie Dow showed up to defend themselves. A 16 Z crypto did file an amicus brief around the service of process issue. That was mostly focused on how a Dow could be served. Whether or not appropriate notice was given, could an agency deliver something to a chat room and have that be sufficient
Thinking Crypto News & Interviews
"cftc" Discussed on Thinking Crypto News & Interviews
"Real time auditing capabilities to ensure that those customer funds are being segregated. And that's come online because of issues that had that the agency had seen and that the futures industry had experienced where those customer funds had not been segregated. We saw that in the blow up of MF global, we saw that in the blow up of revco. And so the agency spent a lot of time developing capabilities to verify in real time that customer assets were segregated. And as a result of that, the U.S. derivative entities that were regulated by the CFTC were solvent and are now being sold. I think they were just cleared for sale in the bankruptcy process. So could more have been done to try to unearth and uncover connections between FTX U.S. derivatives and other entities. I'm not sure, could more have been done on the CFTC side to explore in more detail. FTX dot com. I mean, possibly. But I think to the extent that FTX dot com was engaging U.S. customers, which apparently it was, you know, I think that that's kind of an open question for all regulators. Yeah, and maybe I understand some of this is new territory, but I guess in the future, if there is an outside international exchange before they even try to come set up something in the U.S., I guess the regulators have to take it the next to the next step. And that is, okay, show us your books where that international business and what you're planning to do, right? Sorry, that's a really important point. And I think we saw that when I was at the CFTC, where you had similar to FTX, you had other international unregulated or lightly regulated crypto exchanges, many offering a large marketplaces in derivatives contracts. Use the resources that they had accumulated to try to buy U.S. entities and the statute that the CFTC follows didn't have a review process in it to verify or research or in any way acknowledge that these were good actors. It was much more of a cursory process. And the agency does have to follow the law, and if Congress says this is your review process, that's the review process. So I think in a recent hearing, senator gillibrand from New York raised a very good point about that. Do you need more authority to review the solvency and good faith acting by entities that are seeking to acquire our U.S. based regulated venues? And I think the response to that by chairman benham was yes. I think we do. And so that's a very legitimate concern. But I also think it's really important to bring this back to a policy perspective, which is if you have a very productive well thought through a appropriately calibrated regulatory regime in the United States, especially for centralized entities, then you're going to increase the attractiveness of those entities to institutional clients. Two U.S. retail. And make them more safe and sound,
The Daily Hodl
Foundation Behind XRP Rival Stellar XLM Tapped for Position on New CFTC Advisory Committee
"7 p.m. Sunday January 22nd, 2023. Foundation behind XRP rival stellar XLM tapped for position on new CFTC advisory committee. The firm behind XRP competitor stellar XLM will represent the digital asset industry in the commodity futures trading commission CFTC relaunched global market advisory committee Mac. In a new company blog post, the stellar development foundation says it will be one of four crypto related firms to join the committee alongside representatives of traditional finance. The post foundation behind XRP rival stellar XLM tap for position on new CFTC advisory committee appeared first on the daily HODL.
Bitcoin News
US Authorities Charge Mango Markets Attacker Defendant Arrested, Detained in Puerto Rico
"12 a.m. Monday, January 23rd, 2023. U.S. authorities charge mango markets attacker defended arrested, detained in Puerto Rico. The U.S. Securities and Exchange Commission SEC, the commodities futures trading commission CFTC, and the Department of Justice DoJ have charged an alleged attacker who stole 116 million from crypto trading platform mango markets. The defendant has been arrested and is currently detained in Puerto Rico. Mango markets manipulator arrested, detained the U.S. securities and
The Crypto Overnighter
"cftc" Discussed on The Crypto Overnighter
"Harassment, and threats of physical harm after the business went bankrupt, leaving billions of dollars of investors money stuck. And three guys basically just crashed his front gate, making threats, saying the security guard couldn't keep him out. So that goes a long way towards lending credence to his concerns. Sam was granted bail on a $250 million bond and was released on conditions. His child is expected to start in October. And sticking with FTX here, because as we know, the CFTC commodity futures trading commission is investigating FTX. Their questioning the work done by institutional investors to check to see if they were responsible for the loss of user funds. A commissioner from the CFTC said the fact that some investors lost a lot of money raises a lot of questions about the work that they did to check the investment before putting any money into it. Due diligence. The CFTC is worried about the way the crypto exchange FTX was wrong. John Jay ray the third set in court that FTX didn't keep records or have control over the exchanges finances. This lack of record keeping is making the CFTC question the actions of institutional investors. They're asking questions like, how could this happen? And did they ignore it? Were they just excited about this new technology? Now we do know that Sam used trust to make people want to invest. But now we know that he was full of lies. CFTC commissioner Christy goldsmith Romero thinks that investors in FTX ignored warning signs when checking the investment and is asking questions about their involvement. And so she's concerned she's looking into whether investors of FTX had something that kept them from doing their due diligence. Now, genesis wants to leave bankruptcy quickly and efficiently. Their CEO, Dara Islam, wrote a letter to clients saying as much. The company also wants to be in a good position after leaving chapter 11 bankruptcy. The company owes its main creditors $3.6 billion. Clients claims will be handled through the chapter 11 process. The CEO wrote in a letter that the company is working on a claims process for clients, and that's needed because the chapter 11 process stops the company from paying back any claims to its lending customers. However, the trading arm of the company, which is not part of the bankruptcy, is still moving money around on the blockchain. This suggests that the business is still operating normally. A wallet controlled by genesis sent $125 million of eth, FTM and tether to different cryptocurrency exchanges on the day of the bankruptcy filing. Additionally, the wallet received almost $50 million in USD C in recent hours. The fund's movement matches digital currency group's statement that the genesis trading business will continue as usual. However, it's unclear how the bankruptcy of genesis lending arm will affect the spot and derivatives businesses in the long term. Frank Shapiro is a journalist at the block, and he put together a Twitter poll, asking if people would trade with genesis after the bankruptcy of its lending division. 70% voted
The Crypto Overnighter
"cftc" Discussed on The Crypto Overnighter
"The lawsuit was delivered through a chatbot and a foreign message. Now, some attorneys and companies in the crypto industry are objecting, saying that a Dow can not be treated like a person, and that the CFTC should have to identify the token holders behind okie Dow rather than serving the Dao as a whole. Which makes sense to me. Unless and until daos have at minimum the same rights and responsibility as other organizations like corporations, they can't be held to the same standard. A judge of the U.S. district court for the northern district of California initially stated that the CFTC should try to serve at least one token holder. On December 20th, he ruled that serving bean and kisner, who were still token holders, met this requirement. This ruling was despite the previous CFTC settlement and a statement from their attorney saying that they had no role in the Dow. The judge said that requiring the CFTC to serve the individual known token holders after the Dow received actual notice is an extra measure to ensure due process. He added that the CFTC used all information available to serve the okie Dow and it is clear that the Dow has actual notice. The service was proper and met due process requirements. The judge also stated that the fact that the lawsuit received national media coverage and there were four friend of the court briefs as evidence that the okie Dow as an entity is aware of the lawsuit against it. Economists at the bank of international settlements have suggested a new solution to the risks in the crypto ecosystem. In a bulletin related on January 12th, they advise to keep an alternative, specifically Central Bank digital currency. The authors, led by BIS senior economist Matteo aquilina, stated that they learned from the crypto market downturn in 2022. They emphasize the importance of addressing the risks of crypto before they became widespread in the market. The authors of the report state that both centralized and decentralized finance in the crypto world have similar vulnerabilities as traditional finance.
CoinDesk Podcast Network
Caroline Ellison, Gary Wang Plead Guilty to 'Fraud' Charges
"Welcome to the hash on coin desk TV. I'm Zach seward. That's Jensen assy. Will foxley over there. We're going to get you up to speed on all that's going on in the world of crypto, including some major developments in the case against Sam bankman fried Jen, take us there, what's going on? All right, so former Alameda research CEO Caroline Ellison and FTX cofounder Gary Wang have both pled guilty to charges associated with FTX collapse. The SEC and CFTC have also announced charges against the two saying that Allison manipulated the price of the FTT token, U.S. attorney Damian Williams says both are cooperating with investigators, former FTX CEO Sam bankman fried was charged with 8 crimes earlier this month. We've discussed those at length. They include money laundering, wire fraud and securities fraud. He is being extradited from The Bahamas to the U.S. and is in FBI custody. Zach, a lot to unpack here. What do you got? So much to unpack. Kids, if you're ever in a criminal conspiracy involving $10 billion that are vaporized, especially from customers, snitches fast as possible. That's the story here. Everyone associated with FTX and Alameda turned snitch on sandbank and freed. And they're probably going to have a much more comfortable life because of it all their former colleague rots in a prison cell somewhere for a long time. That for me is the takeaway looking at some of this stuff. It's pretty wild. Bank and freed was flown in from Bahamas into the New York area last night. A lot of people were closely watching flight trackers on the Internet to see where he was headed. Apparently he's touched down over in Westchester and is making his first appearance in New York in court today for a presentment that initiates the legal proceedings here in the U.S. after some complicated back and forth over whether or not he was going to make his way over here from The Bahamas. So that's what people are watching. I know coin disc has a reporter on the ground at the courthouse in the southern district of New York. So we're going to watch it, watch that for updates later today. And yeah, I don't know. Caroline and the cofounder, they may have found themselves a pretty sweet deal. I don't know, what do you think? Yeah, I think they found themselves a really good deal, right? But if you look at the charges, they possibly were going to have just think it was like 250 years for Caroline. And it was about 50 years for Gary if they were just charged for what they're doing in the first place. I went to the different administrations, the DoJ, and they're getting off the hook more or less. So Caroline Ellison is looking at getting some fine slapped on her disgorgement for any ill gotten gains and then also she's not going to be able to trade anything on behalf of other people
Unchained
The Chopping Block: Was FTX a Scam From the Very Beginning?
"Okay, so the FTX story is the gift that keeps giving. Unfortunately, we can not stop talking about it. We really wanted to. We were still looking forward to this story just slowing down. And people were speculating that it was going to be months until Sam was charged. It's very common in investigations of this kind of this sweeping Ness that they take a long time before any charges are filed because everybody's got to get their case in order before they actually filed hers. This has been incredibly fast. So basically yesterday, it was finally announced that Sam was arrested in The Bahamas, and we had actually believed his Monday night that he was arrested. And then file charges were unsealed. First by the southern district attorney of New York for wire fraud and a bunch of other stuff campaign financing laws and a bunch of other stuff that they charged them with, as well as complaints, civil suits from the CFTC and the SEC. And so the southern district of New York didn't give a whole lot of details. That was pretty sparse. But the CFTC complaint in the SEC complaint have an enormous amount of detail
The Crypto Overnighter
"cftc" Discussed on The Crypto Overnighter
"But here's a question, though. DeFi really comes to mind here. What do you do about companies who don't really have a home? Or their domicile in places like The Bahamas in Dubai, where the EU has no reach at all. Michio hygge is a Dutch lawmaker. And after Wednesday's hearing, he said quote, companies physically present in the EU targeting EU consumers have to adhere to all the principles, rules and regulations. There's a dis balance and a loophole. So all this tells me that while Micah would have stopped FTX if FTX were based in the EU, those rules would not have applied to ftx as is. Because they were completely outside the EU's jurisdiction. And while Micah has been agreed to in principle, the expansive and technical nature of the text of the law has caused it to be delayed. In the EU, each law needs to be translated into the native tongue of all the member nations. Well, it seems that the translation is taking longer than expected. And so Micah is due to go into effect in 2024. If it survives a final vote in February. And I want to close things out by going from the EU to Brazil because they've actually got some good news for us today. They got one step closer because they passed a law that legalizes crypto payments throughout the land. And so it was that the deputy of chambers passed a regulatory framework. This framework legalizes crypto as a payment source. Which represents a huge milestone, but still needs the signature of Brazil's president to become law. Now just so there's no mistake. This doesn't mean that any cryptocurrencies are legal tender. And in fact, the law lumps digital currencies in with airline miles in the definition of payment types that are supervised by Brazil's Central Bank. And to be clear, this has no bearing on securities. Tokenized securities still fall under the authority of the Brazilian Securities and Exchange Commission. If this law is passed, then it falls to the executive branch to determine who will be responsible for supervising non security crypto. In speaking more broadly, while this law does not grant legal tender status, it does lay out the creation of licenses for crypto exchanges, as well as management and custodian services by third parties. And as a nod to FTX, the law requires exchanges to draw a sharp line between company funds and customer funds. Now from the Brazilian regulatory space, let's go to the futures industry association Asia derivatives in Singapore. Because today, at that conference, U.S. commodity futures trading commission commissioner, Christy goldsmith, Romero, was speaking on the subject of using technology to protect investors. And so she talked about a couple of proposals specifically meant to protect consumers as well as the markets. And she started off with definitions. She said, quote, protecting household retail investors start with defining who is a retail investor. And she went in to give some stats of the average retail crypto investor. Quote, most are young, born after 1980, diverse and make less than 50,000 a year. That is not the typical customer that the CFTC is used to seeing. Now, the reason to point out that they're not the typical CFTC customer is because they should not be treated the same. She insists that it is the CFTC's place to make sure that they're not crushed due to a lack of targeted consumer protections. Now what she's talking about is breaking retail investors out into two categories. You've got your regular run of the mill, retail investor, that's going to be different from your professional high end net worth traders. And so she talked about how the CFTC could provide different protections based on the category that that individual falls in. Now, if we were talking about traditional finance, that would fall to the role of the broker to determine if an investment is appropriate for a specific consumer. We don't have that here. So it's Romero's point of view that it becomes the responsibility of the regulators. She said quote, today I am calling publicly for the first time for the CFTC to invoke heightened supervision of crypto exchanges. It is well within our existing authority for derivatives exchanges. And so it came to pass that she did indeed endorse her fellow commissioner Caroline fam's idea. That of the creation of the office of retail investor advocate. And that's going to do it for us tonight. I want to thank you, my listeners, because when you stop listening, I will stop talking. We'll see you tomorrow night.
The Breakdown
Bahamas AG Defends Its Crypto Savvy in Wake of FTX Crash
"To sum up where we left off, the last non interview show was Saturday November 19th. At that point, we had discussed how the $420 million meme raise went directly into Sam's pockets, how Sam's white collar crime lawyers had fired him as a client, how the SEC, the CFTC, and the DoJ all said their investigating, and how new CEO chief overseeing the restructuring John ray claimed that the bahamian bankruptcy was at odds with the U.S. process and further that given that The Bahamas asked for FTX to transfer some assets to them after the chapter 11 bankruptcy was declared that they might actively be compromised as well. And this gets us to one of the stranger dimensions of this whole conflict, which is the international dimension. On Sunday Night, Ryan pinder, who's The Bahamas attorney general, as well as the senator and the minister for legal affairs, made a national address detailing the nation's view of the FTX collapse. One might hope that he would use this as a chance to denounce the fraudulent practices that the company perpetuated. But, alas. That is not what we saw. Instead, pinder characterized the collapse as a quote insolvency crisis, which has been, quote, experienced around the world in practically every sector. He claimed the case should be properly understood as a quote very large business failure as a result of questionable internal management practices and corporate governance. He viewed the catalyst of the FTX collapse as the exchange suffering a liquidity crunch or a run on the bank. And of course, we've seen this framing in media sources as well. Basically blaming binance CEO CZ for instigating a bank run on a competitor and treating the collapse as a normal corporate failure rather than asking why FTX failed to be able to service customer withdrawals, especially given that their terms of service laid out the customer funds were held on trust rather than used for other purposes. Now, sidebar, this is one of the most important things to be paying attention to right now. As relating this entire situation. It is extremely clear that Sam is trying to turn this story his FTX story into one of managerial and competence rather than fraud and deception. This is to be clear another lie.
Markets Daily Crypto Roundup
"cftc" Discussed on Markets Daily Crypto Roundup
"Lead losses after dismal news from ecommerce giant Amazon, increased mainstream concerns about the economy. They're not even sure we're in a recession yet. Amazon's disappointing earnings led the company shares to drop more than 13% in off hours trading, which is terrible, but comes with a silver lining that at least it wasn't as bad as Facebook. Features for the tech heavy NASDAQ 100 fell by 0.9%, S&P 500 futures dropped by half a point while contracts for the Dow Jones Industrial Average were down by one tenth of 1%. Overseas, European stocks were a little bit more mixed. The pan continental stock 600 traded relatively flat while in London, the FTSE 100 declined by around two tenths of a point, in Germany, the Dax gained by about the same amount. Can continue into the east, Asian stocks also declined. In Hong Kong, the hang seng lost 3.7% wrapping up its worst week in more than four years. While in China, the Shanghai composite fell by 2.2%. In Japan, the nikkei two two 5 was down by almost a full point. And commodity markets, brand new crew, that's the global benchmark for oil and gold where each trading down by about 7 tenths of 1%. With oil benchmark dropping two $94 and 34 cents per barrel, and gold trading hands at $1652, petroleum. Today's traditional markets coverage draws from The Wall Street Journal, the FT and market watch. Stay tuned for after the break we'll take a look at the Discord bot blues or wiped out is probably our considered people under the law. Back in a minute. Zengo crypto wallet is an on chain crypto wallet with no private key vulnerability. Leveraging advanced cryptography called NPC, which until now has only been available to multi-billion dollar institutions. Zengo is the most secure web three wallet, and the best place to keep your digital currency, NFTs, and assets secure. It's also fully recoverable using the wallet's biometric recovery kit. Get started at zen go dot com slash markets and use code markets to get $20 back on your first purchase of $200 or more. Terms and conditions apply, sea site for details. Today's featured story is a policy news piece from coin desks, Nicolas day. Our story today is entitled daos aren't people crypto lawyer tells court and CFTC's oki case. Decentralized autonomous organizations better known as daos, are collectives that typically govern activities by voting through the use of crypto tokens, and they are not people and should not be treated as such. A group of lawyers and developers told a California court on Monday. The lex punk army so called a group that received permission to file an amicus or friend of the court brief, and the ongoing commodities future trading commission, or CFTC, lawsuit against okie Dow, argued that the federal regulatory agency should be required to identify and directly serve any people it believes violated federal law rather than the Dow itself as an entity. The CFTC alleged that the Dow was an unincorporated association last month, suing it while simultaneously setting charges against B zero X, the Dao's predecessor centralized company, and founders Tom bean and Kyle kisner. Last week, CFTC chair rosten Burnham described uki Dao's behavior, that is, it's offering of the same illicit products as B zero X previously offered without registering or operating and know your customer program as so egregious as the agency described that the agency had no choice but to bring charges. But still, it's how the CFTC brought these charges that as attorneys in the crypto industry sounding alarm bells. The agency sought court permission to serve the entire Dow at once by posting the lawsuit on a public forum and through a help bot. Judge William orrick of the northern district of California briefly approved this move before responding to two motions for leave to file amicus briefs brought by lex punk and the DeFi education fund, meaning they asked permission to join the case. The DeFi education fund filed its amicus brief alongside its motion to join, which the judge accepted after the fact. Lex punk had until Monday to file its own amicus brief, another party, crypto venture fund paradigm, asked the court to file its ammo his brief earlier on Monday. In it, the group argues that whether the Dow is an unincorporated association should be interpreted under the commodity exchange acts federal statutes, rather than under any state concerns, while the CEA includes an association within the definition of a person, nothing in the statutory text suggests that a Dao is an association. Wrote attorneys led by Stephen Polly in the brief. The filing also expressed his concern that serving a Dao, which the brief argues should be seen as software means it may be impossible for anyone to challenge the precedent. Quote, no person will be able to challenge whether the CFTC's actions and expanding the definition of person comport with the requirements of the administrative procedures act. If it default judgment is entered in this matter on the CFTC's behalf, the filing said, allowing the default action would allow the CFTC to quote effectively and quote create a rule bypassing the administrative procedures act the attorneys argue. Quote, in short, there is no independent statutory basis to support the CFTC's assertion that okie Dow is a person or an association without this authority, service on okie Dow can not be approved by this court, whether under FCR P four or otherwise the attorneys wrote. The CFTC does have existing precedent and can point to in bringing a lawsuit against individuals it believes violated the law. The filing said quote, but if the CFTC alleges that individuals that can not identify are responsible for CEA violations, the solution is to name them as fictitious defendants until such persons can be identified, served with this lawsuit in a manner consistent with the rules, and given an appropriate opportunity to defend themselves. This is the correct method of filing and serving a complaint against unknown individuals. The CFTC now has until November 7th to respond. The friend of the court parties will then have another week to respond to any issues raised by the CFTC before all parties meet in court on November 30th to ask the questions out. This is likely a story we'll be following if just so I can say down over and over again. Thanks for listening. And that's our show for today. Thank you very much for listening this episode was edited by Adrian blust and we'll be back tomorrow with your weekend story. And just a reminder, that coin desk is a new source and has not provide investment advice.
CoinDesk Podcast Network
The End Game of the First Big Wave of Crypto Regulation
"As regular listeners know, I believe we've entered the endgame of the first big wave of U.S. crypto regulation. This is a process that started a little with the introduction of Facebook's Libra in 2019 and started a lot with summer 2020s battle over the infrastructure Bill that really galvanized the crypto lobby. Since then we've seen significantly more engagement. Politicians on both sides of the aisle have actually dug in deep and promisingly, it's been one of the only issues to remain firmly anti partisan. By which I mean that while there are, of course, some attempts to subsume it into other political priors by individual members of the parties, by and large, both allies and antagonists come from both sides of the aisle. There is in more than just about any other issue I've seen, first principles thinking from politicians and their staffs. However, there are some really thorny issues. And one thing that's become clear over the last year is that given that this is a new industry with new challenges and opportunities, it really must be the elected officials in Congress and the Senate who are determining authority and new regulatory regimes. As opposed to appointed officials jockeying for power within their various agencies. The Biden administration threw in their hat this year with the executive order on digital assets, but did so in a thoughtful research alignment kind of way versus a policy setting sort of way. And so a lot of the focus this year has been on what's going on in Congress. Multiple bills have been introduced, including the responsible financial innovation act from senators lummis and gillibrand. More recently, a lot of attention has been on the digital commodities consumer protection act or the DCC PA. The bill introduced in August, among other things would give the CFTC much more authority to regulate the industry as a whole.
CoinDesk Podcast Network
"cftc" Discussed on CoinDesk Podcast Network
"Mastercard's chief digital officer said, quote, there's a lot of consumers out there that are really interested in this and intrigued by crypto, but would feel a lot more confident if those services were offered by their financial institutions. It's a little scary to some people still. Now this is an interesting point of discussion for the community. On the one hand, one of the key headline banner stories of this bear market is institutions, and traditional finance institutions in particular, building a huge amount of market infrastructure to participate in the crypto and digital asset space. It is very clear that these institutions are not treating this bear market as a winter from which this industry will not recover, but as a down market on something that still has a lot of value and a lot more story to play out. This could represent a whole new set of people coming into crypto and for that reason many crypto industry participants are excited. At the same time, I do think there's a fear that the triad 5 players of the world are going to subsume a lot of the activity and upstarts and everything is going to be gated by traditional banks. To some extent, I think this process is inevitable, and mostly being bullish on the fact that these institutions are making such a big bet even in a down market is a really positive sign. When it comes to where people will actually trade and engage with crypto, to some extent the market is going to sort that out. And to the extent that we want to be focused on making sure that incumbents don't get a preferential leg up, the place to look is around regulatory approvals. This is why custodial banks suit against the Federal Reserve, for example, is so important. Investor and adviser Eric Weiss writes developments like this NASDAQ, bank of New York, fidelity, et cetera, make the current prices a gift for those who read the writing on the wall and have courage. Speaking of BNY, one quick update there. BNY Mellon CEO Robin Vince has discussed some further details about the bank's new crypto custody offering during their conference call for third quarter earnings. He said, quote, what we've heard from our clients is that they want institutional grade solutions in the space. He cited their research, which showed 75% of clients are currently investing in crypto or considering it, with 90% expecting to do so over the next few years. Vince said BNY Mellon considers their crypto offering to be a very long-term play and expects full scale adoption to be years or even decades away. He also added that the bank isn't putting a ton of capital behind their crypto projects yet. Now, moving to some perhaps less fun parts of the industry. The SEC and the CFTC are now conducting a probe into the collapsed crypto hedge fund three arrows capital. They're trying to determine whether the fund misled investors about their balance sheet, and whether the fund should have registered with the two agencies. This is all coming from Bloomberg reporting, who is citing two sources familiar with the matter. Singapore based three AC filed for bankruptcy in July, saying that its business had quote collapsed in the wake of extreme fluctuations in cryptocurrency markets. The fund of course took heavy losses related to the collapse of the Terra USD algorithmic stablecoin in May and was also rumored to have taken losses on the grayscale Bitcoin trust arbitrage in 2021. The collapse of three AC rippled throughout the crypto industry with major firms, including Celsius and Voyager being pushed to bankruptcy following three ACs default on loans. All told, creditors claimed their owed billions from three arrows capital. At the end of June, the monetary authority of Singapore, which is the city state's Central Bank and primary financial regulator, reprimanded three AC for misleading it with allegedly false disclosures, allowing the firm to exceed regulatory limits on size. With firm founders suzu and Kyle Davies locations still unknown, and unable to be reached by their attorneys, liquidators in the bankruptcy proceedings have recently asked the court to allow subpoenas to be served by email and Twitter message. Now, one of the interesting things about this new involvement of the SEC and the CFTC is that it sounds like they're looking more into jurisdictional issues rather than just conduct. It's not clear where that jurisdiction might come from, but perhaps it's around their dealings and disclosures with U.S. regulated firms rather than about the three AC business directly. Now to the extent that it is that it could be a relatively important case when it comes to expanding regulators jurisdiction. Even if that's just in terms of perception among crypto funds rather than any material change in their reach. Now when it comes to the twitterati, there are lots of comments like this. NFT machine writes its endlessly hilarious to me that they waited until everyone was broken impoverished to start pursuing legal convictions. Now the issue to be fair is that in the absence of real regulatory clarity, enforcement is basically all any of these agencies have. Of course, I'm not apologizing on their behalf. I've said before, I think the SEC has lots of things that it could have been working on that would have positively impacted the industry like articulations about their beliefs around what makes a digital asset a security. However, the point remains that in the regulatory environment we have, it is inherently almost all reactive. Speaking of legal precedent, crypto venture firm paradigm has become the third group to ask to appear before the court in the case between the CFTC and the okie Dow. Paradigm wants to argue that the CFTC should serve individual Dow members directly rather than serving the Dao as an organization via a
CoinDesk Podcast Network
"cftc" Discussed on CoinDesk Podcast Network
"It's not going to be the same day as it is 5 years from now. So I'm going to respond to that be nimble and don't rule by prescription. I think that there would be a lot of folks who would criticize the position of the SEC here and saying you're trying to apply this prescribed 1933 statute and rules that it really dates back to that. And squeezing whatever the square peg, the crypto world is into that round hole. Is that where you're going with this? Is that a problem? Is this an opportunity for us to create a body of regulations that in fact now is updated essentially to the 21st century? Yeah, I mean, I think the CFTC has legacy statutory requirements, legacy regulations that may not also fit for the crypto industry, but I think that Congress has been a CFTC a lot of room to adapt, where the SCC I think has traditionally had a culture of more prescriptive regulations where the CFTC invites imposes a set of principles on the infrastructure that they regulate such that there is a fair number of ways regulated entities can comply with it and the criticism of most often rendered at the CFTC is that that's relaxed regulation. Anyone who's been regulated by the CFTC, I think, will tell you that it's not relaxed regulation. The fact of the matter is that while there's a set of principles that are imposed upon the instruction of the CFTC regulates, they take very seriously the compliance obligations of those who have signed on to comply. And when compliance is missed, there's a very strong enforcement program that backs that up. And so I think another misunderstanding about the distinction between the SEC and the CFTC has been that the CFTC is a more relaxed, regulator, but not relaxed. Their principle based.
CoinDesk Podcast Network
"cftc" Discussed on CoinDesk Podcast Network
"Welcome to coin desk TV. You're watching the hash. It's me, Jen, and will today we are going to jump right into this thing. I'm going to pass it to myself. I have the first story of the day. Just caught it. Thank you very much. All right, the first story of the day is some Giga bullet that CFTC is talking about pumping Bitcoin. What is this story? This is crazy. All right, we're talking about CFTC chair venom going on stage and saying, hey, there's a CFTC regulated market. Bitcoin could quote double in price. With the price prediction, that's crazy talk. Anyway, I was struck by this one. Interesting little nugget here. Obviously the subtext is there's a bit of a turf war between the CFTC and the SEC over which U.S. agencies should regulate the crypto markets. This is specific to Bitcoin, so we can get into that in a bit. But I thought this was interesting as we've seen some things out of the CFTC lately that may make crypto people wonder if it's really the favorite of the two regulatory bodies. We'll also get to that as well. But I'm going to talk to you straight to will for his initial thoughts on this headline, which is definitely a bit striking. I love the price prediction. Yeah, let's go back to the background for this story, which is the Senate agriculture committee. Yes, that still matters. Agriculture matters. That's where the debate between the CFTC and the SEC is happening for the future of digital assets. Who is going to be the regulatory body that oversees all these things and right now is a live turf war between who gets oversee what SEC is definitely come out very strong. There's things I'm op eds in The Wall Street Journal. There's been some nice videos from Gary gensler. And now we have this nice little quote from CFTC chairman saying, hey, we should have it. And if we get it, we might pump for Bitcoin a little bit. Of course, that's always saying, but it's nice to add on there that I like to look at. We'll see what happens with this committee hearing. We'll see what happens with the decisions could be quite a while. But it's really important, right? Who decides to regulate these bodies or who's in charge really needs bodies, could matter for who gets time with penalties who gets fined, how much you have to pay to be in exchange, how these tokens are processed. It's very big for the industry. And I think you could do a lot to mature the industry over the next two years. So definitely something to watch. Again, guy bring back to that price point. I can't believe he said that. It's a little interesting, most times regulators do not talk about price at all, but I love that he said, Jen over to you. Imagine gensler making a price prediction like this. I think everyone's minds would be blown. He said in the article, you know, growth might occur if we had a well regulated space. I don't think anyone is arguing that. But I thought that the funding piece was really interesting. So he mentioned that they've had relatively flat funding over at the CFTC over the past 5 or 6 years. And if they were, in fact, to oversee the crypto industry that they would need more budget to do that. And so I wonder if there's maybe a little bit of an opportunistic take hero in the CFTC's part, you know, if we oversee crypto, we can get more money, the money we've been fighting for for the last 5 or 6 years. And then, you know, have this new jurisdiction. I know there's a lot more that goes into this, but I thought it was interesting how that came up in the story as well, pass it back to you. Yeah, the quote I want to pull from the story is really interesting. He said, quote, non bank crypto institutions thrive on regulation. They thrive on regulation clarity and they thrive on level playing field, and they may otherwise say they don't want that, but they may bicker about hyper regulation. But what they love most is regulation because they are the smartest, the fastest and the most well resourced with those attributes they can beat everyone else in the market. So obviously crypto will obviously
CoinDesk Podcast Network
"cftc" Discussed on CoinDesk Podcast Network
"Environment. This approach constitutes blatant regulation by enforcement by setting policy based on new definitions and standards never before articulated by the commission or its staff, nor put out for public comment, and finally the commission ignores an alternative, well established basis for imposing liability for the okie Dow's violation of the CEA and CFTC rules in this case. IE aiding and abetting liability. That is specifically authorized by Congress, and that would solve all of these problems. Jake travinsky writes, the CFTC's busy X enforcement action may be the most egregious example of regulation by enforcement in the history of crypto. We've complained at length about the SEC abusing this tactic, but the CFTC has put them to shame. It's deeply disappointing to see the CFTC damage its own reputation like this among those who care about the future of crypto in the United States. Especially at a critical moment while it pitches itself to Congress as the right agency to regulate digital commodity trades. Still, I think the best and most sober review comes from chairman Bernanke at bone condor on Twitter. She writes, having been in traditional finance and having been heavily involved in compliance. I've seen the CFTC be reasonable. They're an agency that usually doesn't tend to overreach or create policy from nowhere. That said, I think this one missed the mark in a number of ways. The messenger descent is spot on, her main points, one, this has far reaching policy implications, and it is regulation creation by enforcement. Two, this is an arbitrary definition that the CFTC themselves has never used. Three existing law could have already gotten who they want to get. None of this should be taken to mean regulation is bad or being in kissner did nothing wrong. They absolutely did and they should be charged for the wrongdoing. What it does though is distance and device voting with your governance tokens. What does that mean? The complaint defines the doubt, not as any token holder, but is anyone who voted during a time period. This means you can be in the Dow by being a token holder, but if you vote for anything, higher interest rate, then and only then are you liable. That's problematic, but the complaint then says that since the Dow is equal to what came before it, the Dow was liable for all previous crimes. So if you bought the token and voted on a ribbon vault, you're liable for offering an illegal asset by virtue of having bought it. The CFTC themselves has never defined a Dow this way. This is the first instance even messed of this definition. I don't think this is how the law should work. This is an admission that you can be charged with a crime that's only defined when you're charged. There's a place for regulation of daos and honestly, I agree with the CFTC in their attempt to explain that just because you're a Dao doesn't mean you're immune to regulation and compliance. That's entirely fair. There's more work to be done on defining that area of law. It's good to reduce the amount of bad actors in the space. It's not good to do it via new policy creation without legal authority notice republic input. I hope the CFTC is more thoughtful going forward and that they work with crypto communities to create careful, good rules. Now, as I've been reading all of this, I was reminded of another recent thread from Jake travinsky again. It serves a sort of, if not a warning, a level setting and expectation setting. On what might come out of this regulatory process. He writes, policy making behind the scenes is a hugely complex negotiation among many parties with different goals. As with most negotiations, striking a
CoinDesk Podcast Network
"cftc" Discussed on CoinDesk Podcast Network
"Night when the CFTC brought the first ever regulatory action against the Dow. One of the big reckonings that crypto was going through overall is government putting to the industry the question of, well, just how decentralized is it really? That was sort of the gist of opaque sanctions on tornado cash, and it's certainly a part of this case as well. Miller White House Levine from the DeFi education fund sums up with quotes from the CFTC's complaint. Defendant okie Dow is an unincorporated association comprised of holders of oke tokens who have voted those tokens to govern the oke profile. By the way guys, I apologize, I have no idea if it's ooky or okey, so if it's the other one, my apologies. Miller goes on with his quotes. By transferring control to a Dao, B zero X's founders touted to B zero X community members, the operations would be enforcement proof. Allowing the okie Dow to violate the CEA and CFTC regulations with impunity, as alleged in the federal court action. These actions are part of the CFTC's broader efforts to protect U.S. customers in a rapidly evolving decentralized finance. Set acting director of enforcement low. These requirements apply equally to entities with more traditional business structures as well as to douse. Miller goes on. The press release includes two actions, settlement with B zero X quote for illegally offering leverage and margin retail commodity transactions and digital assets, and two charging the Dow with violating those same laws. Lawyer drew hinkey is also tweeted about this. He writes, allegations and claim against okie Dow characterize it as an unincorporated association comprised of holders of oki tokens. At legacy BCR X tokens, who have voted those tokens to govern. EG to modify operate market and take actions with regard to the oki protocol. This is a huge distinction. While the Dow itself is a named party, it is unincorporated, which leads to all sorts of material questions about who can be sued for what. In this case, the complaint makes clear that the Dow is those who a have tokens and B have voted to govern. So the Dow is in every passive token holder, it's comprised of the humans and entities that use their tokens to vote. The complaint further alleges that the Dow itself controlled and operated the bzx protocol as B zero X had done prior to turning control over to the okie Dow. Complaint seeks a bar of all token holders who voted as part of the Dow from the commodities markets, big picture themes to take away. One, how much control does a Dow have? If it's too much, maybe the counterparty to the transactions offered by the protocol. Maybe decentralization of control over the protocol, not over voting to control the protocol is what matters. Two, maybe this isn't the death of all doubts but a strong reminder that you shouldn't offer regulated transactions to U.S. persons. If you're not complying with the regulations. Preston Byrne put a finer point on this, he writes, looks like voting governance tokens on an illegal protocol is a bad idea. Going to do a bit of a victory lap here, albeit one I take no joy in, but Stefan Paley suggested dows would likely be found to be unincorporated associations back in March 2016. I wasn't too far behind him in my critique of the original big Dao when it blew up a month and a half later. I wrote then, it is possible that a partnership less likely or unincorporated association more likely will be deemed to exist between its members. Caveat, these are claims as yet unproven. A court may not find in the CFTC's favor. But the unincorporated association point is something crypto law Dao boosters have glossed over or poo pooed for years. And look where we are now. Big question whether SEC and FinCEN try it too. Punk 6 5 two 9 threaded about this as well. He writes, the CFTC bz oki enforcement action is interesting because of the last paragraph, namely that the CFTC just looked through the Dow and said it is an unincorporated association and the individuals are responsible. This is something I worry about on behalf of waves hands some of you. Dao used to mean decentralized autonomous organization, or basically a smart contract. That is not what anyone is doing these days. What people are doing is getting token holders to vote on things. This is not decentralized and not autonomous, and an absence of a legal structure, what regulatory authorities are going to do is exactly what is written below. Go after some of the individuals in the Dow. In this case, the organizers. The takeaway is that you should look at the substance of your actions, calling your Discord group a Dao and voting your tokens does not reduce your legal liability. In some ways, it might increase it. Be careful out there. Investor Adam Cochran writes holy. The CFTC has gone after them saying the protocol itself was a futures violation, and that the Dao governance didn't matter. It was still an unincorporated entity. This is bad. It's kind of ruling will impact so many projects collateral margin future settlement Dow passed through. Horrible precedent. Still, not everyone is quite as freaked out. Bill Hughes from consensus writes a court has to agree with the CFTC for these theories about die liability for a token to be meaningful. That's not going to be easy for the CFTC. Chill out everybody. The world hasn't ended. What's more as many of these folks pointed out, there was a strong dissenting statement from commissioner summer K messenger. She wrote, today the commission is called upon to consider novel and complex questions about how our governing statute took the commodity exchange act applies in a world of digital assets, blockchain technology, and decentralized autonomous organizations. Technology that did not exist when the statute was enacted in 1974, and that has just started to develop since Congress last amended the statute as part of the Dodd Frank act in 2010. Unfortunately, I can not support the commission's approach to this particular matter. While I do not condone individuals or entities blatantly violating the CEA or our rules, we can not arbitrarily decide who is accountable for those violations based on an unsupported legal theory amounting to regulation by enforcement, while federal and state policy is developing. In the dissent she gets specific. I can not agree with the commission's approach of determining liability for Dao token holders based on their participation in governance voting for a number of reasons. First, not only does this approach fail to rely on any legal authority in the CEA, it also does not rely on any case law relevant to this type of action. Instead, the commission's approach imposes governmental sanctions for violations of the CEA and CFTC rules based on an inapplicable state law legal theory developed for contract and Tor disputes between private parties. Additionally, this approach arbitrarily defines the okie Dow unincorporated association in a manner that unfairly picks winners and losers and undermines the public interest by disincentivizing good governance of this
The Breakdown
"cftc" Discussed on The Breakdown
"This push the recession narrative further? Or will inflation remain the chief concern? It was also, of course, merge week. The long anticipated transition from proof of work to proof of stake on Ethereum happened on Thursday basically without a hitch. Since then, crypto Twitter has been nonstop political infighting. Bitcoiners are saying this makes eth more of a security while some Ethereum and VCs are saying the proof of work is stupid. Candidly it's all pretty predictable and in line with where I would have expected the BS to be after the merge. It certainly not as bad as it might be. And I don't think it really matters anyways. What will matter is if and how new narratives creep into the regulatory discourse. Speaking of regulatory discourse, let's actually turn our attention to two hearings from Thursday. SEC chair Gary gensler appeared at a Senate banking committee hearing. Now this hearing was the annual oversight hearing for the SEC so it covered a range of topics from stock buybacks to environmental disclosures, but obviously I'm going to focus on the crypto discussion. Senator and Republican ranking committee member pat toomey framed the crypto portion of the hearing in his opening remarks, drawing attention to the fact that the SEC had brought enforcement action against BlockFi in February, but was apparently asleep at the wheel as multiple bankruptcies rocked the rest of the crypto lending industry in the middle of this year. Toomey also questioned the SEC's failure to quote clarify the rules of the road for crypto assets beyond assertions that most tokens are securities. He raised a point regarding the definition of a security noting that most crypto tokens do not represent quote a financial claim on the issuer, suggesting that these could make tokens quote very different from the vast majority of ordinary securities. To me concluded his opening by asking what is the crypto specific road map for crypto intermediaries to register with the SEC? He even noted Matt Levine's criticism of chair genzler's approach to regulating the industry, noting the specific line, chairman gessler's posture is that he should be in charge of writing the rules for crypto, but not write them. At the same time, to me recognize that, quote, Congress ought to step in and provide clarity. In particular, we need to revisit the definition of security as part of a larger effort to tailor a regulatory framework that is calibrated to the unique risks and activities of the crypto market. Nexo is a security first platform built for the long run, with everything you need for your crypto. 5 key fundamentals, including real-time auditing and insurance on custodial assets, safeguard your funds. Making nexo the right place for you to buy, exchange, and borrow against your assets safely. Learn more about nexus reliable business model and start your crypto journey. At nexo dot IO. That's N EXO dot IO. Eager to make more informed decisions around crypto, chain analysis is here to help. She now is demystifies cryptocurrency by providing industry leading compliance, market intelligence, and investigations support for all crypto assets. For organizations like Gemini, crypto dot com and BlockFi. Gain unparalleled visibility and maximize your potential with the leading blockchain data platform. By visiting us now, at chain analysis dot com slash coin desk. The breakdown is sponsored by FTX U.S. FTX U.S. is the safe regulated way to buy and sell Bitcoin and other digital assets. With up to 85% lower fees than competitors. There are no fixed minimum fees, no ACH transaction fees, and no withdrawal fees. One of the largest exchanges in the U.S., FTX U.S. is also the only leading exchange that supports both Ethereum and Solana NFTs. When you trade NFTs on FTX, you pay no gas fees. Download the FTX app today and use referral code breakdown to support the show. Now for his part, Cher gensler spent his time in opening reiterating recent talking points. He asserted that quote of the nearly 10,000 tokens in the crypto market, I do believe that the vast majority are securities. Given that, it follows many crypto intermediaries or transacting insecurities and have to register with the SEC in some capacity. Share against the refocused attention to the idea that in creating reforms for crypto markets, Congress and the SEC should ensure that they don't, quote, inadvertently undermine the securities laws underlying $100 trillion capital market. That's the mother lode. That's our capital market. Crypto is one 100th that size. He concluded by noting that the SEC is quote anchored by the laws Congress passes. The court's interpretation of those laws, economic analysis and public input. Now as you can see, in back and forth, the first big topic dealt with was how the SEC defines crypto assets as securities. Senator toomey used the example of Bitcoin which chair gensler has publicly stated does not meet his definition of a security. He asked whether decentralization was the determining factor in this process. Began by referring to the Supreme Court definition as he sees it. Quote, whether the investing public is anticipating profits based on common enterprise. Senator to me question whether a common enterprise could exist in the absence of centralization. While struggling to reach a clear answer, chair against their eventually settled on the idea that Bitcoin's status as a non security hinged on the idea that quote, the investing public is not betting on someone in the middle. To draw a line under his point in this questioning, senator toomey stated, quote, it is not reasonable to fail to provide clarity to provide the definition of exactly where on this continuum you have a sufficient common enterprise that it qualifies as a security in where you don't. You've set Bitcoin doesn't, some of your colleagues have said Ethereum doesn't, but a reasonable developer that wants to comply with this doesn't know where that line is drawn. That prompted against a return to his view that his definition of common enterprise hinged on whether there is a group of developers in the middle, and the investing public is betting on them relying on them. Senator Tommy moved to some discussions of how investors had been let down by the SEC, and their failure to properly regulate crypto intermediaries. He noted that during the bankruptcy of crypto lenders this year had led to the loss of customer funds due to the lack of regulations allowing for the segregation of customer funds. Senator tummy concluded by saying, my concern is that the approach you're taking with these one off discussions. If it did even result in an opportunity to comply, it would be this idiosyncratic exemptive order negotiated with a single company. That's not a good way to pass rules. Chair gensler followed up, I think we've been very clear through 70 or 80 actions. I look at other times in history. The SEC and the asset backed securities market took ten or 11 years where they did these exemptive orders and relief to individual issuers and did a rule at the end of that ten or 11 years based on all of that experience. Seeming to imply that this regime of the SEC just going after enforcement actions is a ten or 11 year process before we get any sort of clarity. A couple of other senators also grilled gensler on the crypto industry. Senator round, Republican from South Dakota directly addressed the issues surrounding the SEC's regulatory strategy of suing crypto companies for issuing securities for the last 5 years, while refusing to put forward any agenda to adapting securities and disclosure rules for the crypto industry. Quote, it seems to me you want to regulate an entire marketplace, but clearly it doesn't appear that you've got rules in place to do so at this time. In my mind, this is simply unacceptable. He noted that he had heard from several crypto companies who tried to work with the SEC only to be faced with heavy enforcement actions or the SEC slow walking the process. Senator Cynthia lummis discussed the bill she and senator gillibrand had proposed earlier this year, specifically seeking feedback on the proposed disclosure framework contained in the Bill. She also reaffirmed her and senator gillibrand's desire to continue to work with the SEC and crafting their bill. She suggested that they might be re-introducing it in January. Now, after all of this, there were big fireworks based on comments to reporters. Following the hearing, gensler offered a generic opinion on crypto staking and how it relates to a token status as a security. Quote, from a coin's perspective, that's another indicator that under the howey test, the investing public is anticipating profits based on the efforts of others. The Wall Street Journal then reported these comments as an indication that Ethereum staking model may raise fresh questions from the SEC about whether or not it should be classified as a security. This had a lot of anti Ethereum folks frothing of the mouth to say that the SEC thinks Ethereum is a security, but clearly not everyone agrees. Jake travinsky from the blockchain association wrote, I'd say I haven't heard a compelling argument as to why staking makes an asset more like a security under the howey test, but actually, I haven't heard any argument at all. It's just something people say without regard for either one, house taking works, or two what the law is. The general idea seems to be, if you squint hard enough staking sort of looks like a dividend or interest, and some actual securities have those, so maybe staked assets or securities, too. That's not how the law works. That just means holders have staked assets expect profit, which alone doesn't make the assets into securities. Expectation of profit is only one of four how we test prongs and likely the least important for volatile assets. People hold all kinds of assets with an expectation of profit. Gold, cars, watches, et cetera. Now this was not the only hearing. Also on Thursday, the Senate agriculture committee, which oversees the CFTC, held a hearing to discuss the digital commodities consumer protection act. This is the bipartisan bill that was introduced last month to grant the CFTC oversight over spot and derivatives markets for digital assets that act like commodities. Chairwoman Debbie stabenow, specifically referred to Bitcoin and Ethereum, has two examples of tokens which may fit into this classification. Senator stabenow framed the hearing as being about the importance of delivering the necessary federal regulatory oversight to crypto markets, which have been blighted by bankruptcies, hacks in a major drawdown, harming in particular low income investors. Quote, this is a glaring hole in our financial system and I believe we must close it. CFTC chairman rustin benham was the primary witness for the hearing. He established that he had already directed his agency to begin preparing to be the major fully funded regulator for much of the crypto market. He said the volatility in the market and its impact on retail customers, which may only worsen under current macroeconomic condition, emphasizes the immediate need for regulatory clarity and market protections. Another aspect of the bill would call for the CFTC to examine the environmental impact of cryptocurrency mining, with chair venom noting the Ethereum merge during his testimony. Quote, an event occurred last night with Ethereum, which is going to reduce energy consumption. A step in the right direction, but certainly not resolving the problem. One of the issues with setting up a regulator for the crypto industry has been funding the regulatory effort. Chair benham estimated that this additional regulatory jurisdiction would require an additional $112 million over the first three years. On top of the existing CFTC budget of 320 million per year. There were a couple witnesses as well. Christine Parker, the deputy general counsel for coinbase said, quote, we are at a crossroads when it comes to crypto. She asked lawmakers to set a clear distinction between commodities and securities in the Bill, arguing that it could be quote strengthened by further defining digital asset commodities to ensure assets that do not meet the definition of securities are regulated by the CFTC and not by enforcement through the SEC. Heath tarbert a former CFTC chairman and current chief legal officer for Citadel securities, also supported the bill of the hearing, drawing attention to three regulatory goals which he viewed as being achieved by the bill. Consolidating regulatory oversight within a single agency and arming the CFTC with the ability to set market rules and standards rather than just taking enforcement action. He said he viewed this step as enabling large firms like Citadel to confidently enter the market, which would enhance liquidity and replace the quote bucket shops and boiler rooms. He also said that the bill would enhance customer protection for American investors as well as laying out a framework for enhanced market stability and safety. Now this bill has a lot more support in the crypto industry. There are definitely issues as Jake travinsky and others pointed out. Questions of the definition of a digital commodity. Some provisions that make it quote unworkable for DeFi. Questions about threats to financial privacy and more. But ultimately, these two hearings show such a big contrast. The CFTC is talking about the really big segments of crypto markets, Bitcoin and Ethereum spot and derivatives markets, and how they can be made to operate properly with robust consumer protection. The SEC is really dealing with crypto fundraising, dealing with the ICO problem and just generally ensuring that unregistered public fundraising and other securities offerings don't happen with impunity. It's a big high profile headline grabbing thing, but ultimately a small fraction of what goes on in these markets. Now, of course, ultimately it's going to be to Congress again, I keep saying this like a broken record. To decide who actually has authority over what? But at least as you can see from these hearings that that's the conversation that they're actually having. For now I want to say thanks again to my sponsors next dot IO, chain analysis and FTX, and thanks to you guys for listening. Until tomorrow be safe and take care of each other. Peace
Daybreak Crypto
"cftc" Discussed on Daybreak Crypto
"And in that case, everything's going to be true to a security. But hopefully we have some clarity. Hopefully, adequate funding is there to protect investors, but we'll see, this seems to be where we're headed a split between the CFTC and SEC, but it's not a done deal yet. But that being said, I think we can keep an eye on that and move on. We just have a few minutes left. So I thought it might be kind of fun for Friday to step in our time machine, Greg. And my question to you is that it's, well, it's been a wild few years. Investing in crypto. And I'm wondering if you could go back in time three years to September 2019 before COVID and before the giant insane market we had. The bull and the bear, what's like the one thing you would have done differently. It has to be crypto related and if you have a favorite coin you invested in fine, but if you could have done anything differently, three years ago. Knowing what you know now, what would have been? I mean, I think one thing I did want to put a little bit of rules on this. So no, saying, okay, buy Ethereum and then sell it at yeah, that's fair. I was thinking the same thing. Yeah. Yeah, so like keeping it out of that, I would say probably something somewhat vague when we invest in smart contract platforms because if you look at Ethereum, it was at. So I have the old charts up. It was at a $171. On September 1st of 2019. So even if you would have held it all the way till today, you'd still be up ten X on your money. Okay. And you look at some of the other Bitcoin was at about $10,000. So, I mean, you'd be two or three X your money, but not really up a whole ton in the terms of crypto. And some of the other top coins, litecoin, Bitcoin, cash, they're no longer up there. Bitcoin saver, that's not really, it's a lot of the top coins are not there anymore. So I think my big thing would be investing in the top, I mean invest in the top two coins and invest in smart contract platforms. Oh, and binance coin, B and B, that did really well. That was at $21 back in September of 2019. And I think it's over, it's at least a couple $100. So what about another thing? I sold a bunch of stuff back in 2019. Oh, yeah, I don't know anything. So what about besides buying and selling certain coins? Is there anything that you would have that you would have done differently or something you would have done, would not have done? I think I'd wished I just got involved more earlier. I didn't really get super invested until 2020. In a lot of stuff, like later in 2020, I wish if I would have been able to just really get into crypto and kind of get some of the more content stuff started earlier, I think that would have been that would have been big, but it's hard to obviously hindsight's 2020 on that.
Daybreak Crypto
"cftc" Discussed on Daybreak Crypto
"Everyone. Welcome to another episode of daybreak crypto. I'm here with Greg. And today we have an article and kind of a letter topic for our Friday show. So first we start off with a development that's been going on for quite a while. This is kind of been a year in regulators trying to figure out how to regulate crypto and the major players have been the SEC, of course, but also the CFTC, which is the commodities trade commission. And their responsible for overseeing a lot of the futures, trade, in commodities. But essentially, what seems to be happening is they're settling into some kind of compromise. While there's no legislation agreed to yet, it appears that Bitcoin and Ethereum are likely to be treated as commodities and therefore fall under the purview of the CFTC's regulations, while pretty much every other cryptocurrency will be considered a security and therefore fall under the SEC's jurisdiction for regulation. So like I said, Greg, you know, this is not quite a done deal, but there's been so much conversation happening this year that it seems like this is where we're headed. So in that light, do you like that arrangement? What are your thoughts on that? I think it just makes it even more messy. Honestly, 'cause now we're trying to split hairs under which crypto should be managed by which division and is there going to be fights about it because you would know within the divisions and what, I mean, I just feel like there needs to be one group that is in charge of all of crypto regulation. And you can't kind of split them up like this because it's like, especially like Bitcoin and Ethereum, they're the two biggest cryptos, but they're very, very different in how they operate. So it's weird. It's not like they're setting a president where they're saying everything with a smart contract has to be a security. And if it doesn't have a smart contract, it can be considered a commodity. You know, it's their kind of,
The Breakdown with NLW
"cftc" Discussed on The Breakdown with NLW
"Of collateral..
The Breakdown with NLW
"cftc" Discussed on The Breakdown with NLW
"Let's shift to our main story. There has been a ton of speculation that we're going to see some enforcement action soon and there's a reason for that. It's the end of a lot of these agencies fiscal years. These agencies seemed to be commenting more and more and more certainly the. Sec is making it. A point to talk about crypto more and more and more and yesterday we actually got one although. It doesn't really seem that bad. Us exchange cracking is paying a one hundred and twenty five million dollar fine to the cftc. Here's what compound general counsel and overall crypto legal expert. Jake vince he had to say about it. Enforcement actions are usually bad news but this seems quite positive crack and made a good deal and solved an open regulatory issue. So you've got a win and asserted its authority and commissioner stump. Wrote a good statement calling for clarity. I have to think everyone's happy with this one. The accusation was that cracking had violated the commodities exchange act how by offering margin crypto products between june twenty twenty and june twenty twenty one without registering as a designated contract market or or futures commodity merchant. An fc m. From the cftc during the relevant period cracking offer potential and existing us customers the ability enter into margin retail commodity transactions on its exchanges margin trading was available to any person who cracking approved for a user account. The margining was up to five to one under the settlement with the crack. It will pay one point two five million dollars within thirty days. They will cease to offer margin product to us persons and they waived their rights to hearings in court review. So what's cracking take on this. Well crack and head quote sought clarity around. Cftc margin trading guidance began proactively limiting margin products in june twenty twenty one with the settlement. They wrote we appreciate that. Today's settlement acknowledges our cooperation and engagement. On the issue we are committed to working with regulators to try to ensure the rules governing digital assets create a level playing field globally. One that allows the crypto space in the us to flourish protecting the interests of individuals and the integrity of the industry. But there's a larger issue. Which is that. There isn't really a lot of clarity to be had. One of the most interesting things to come out of. This is commissioner don stumps concurring statement. Basically the t. l. Dr of this is that i agree with this decision. But we've given some guidance but we need to be clear. The guidance she's referring to is the final interpretive guidance on retail commodity transactions involving certain digital assets issued in twenty twenty as she points out this was adopted two and a half years after proposal. And it's now been another year and a half in her statement. She writes in the rapidly. Developing world of digital assets. Two years as a lifetime and yet now here we are an additional year and a half later still as the guidance becomes increasingly relevant to the commission's enforcement program. I believe it is incumbent upon the commission to undertake a rulemaking proceeding to supersede the guidance by adopting binding and enforceable rules that will provide certainty to the marketplace and a shared understanding of the quote rules of the road. She goes on to point out. The things are just blurry. Here's your statement about cracklins registration. The commission finds the crack violated c section for a because it engaged in retail commodity transactions. That are prohibited by the unless traded on subject to the rules of dcm a registration designation. That has neither been requested by nor granted to crack in but it also finds that cracking operated as an unregistered with respect to those transactions which begs the question if crack in hatsaw to register with the commission as an 'em how would it have been expected to operate absent. These transactions occurring on a dm. They would continue to be illegal even if crack and had an f. c. m. registration furthermore. How cracking would be regulated as an f. c. m. is not entirely clear because many of the commission's rules governing its regulation of traditional. Sem's do not fit cracklins role as an exchange it would also be unprecedented for an entity to register as both diem and nfc so as you can see. They're basically falling over themselves saying that. If they had gone one direction they would have run afoul of the other direction. If they had gone the other direction they would have run afoul of the first direction. But it's unprecedented run in both directions as one. So what the hell is cracking supposed to do. She continues in short. The application of the commission's rules to exchange on which retail commodity transactions are traded. Is uncharted territory. At this time. I agree that cracklins activities meet the definition of an f. c. m. set out in the cia and that cracking thus operated as an without registering as such. Though i would note this is a rather broad interpretation of the definition beyond the traditional application. I believe that if the commission is going to hold an exchange liable for operating as an unregistered sem with respect to retail commodity transactions. It is incumbent upon the commission to explain in a transparent manner the relevant legal requirements for such an entity that seeks to register as an sem. And how the commission will apply them in enabling the entity to conduct business with us customers. It's a mouthful but let's read this last line again. I believe that if the commission is going to hold an exchange liable for operating as an unregistered c m with respect to retail commodity transactions. It is incumbent upon the commission to explain in a transparent manner the relevant legal requirements for such an entity that seeks to register as an sem. And how the commission will apply them in enabling the entity to conduct business with us customers. This is why people like jay. Trubisky are convinced that this is actually bullish. That statement from commissioner stump could not stand in more opposition to the sec who continues to refuse to offer guidance other than an enforcement actions and which continues to insist that how he tells you everything you need to know about how securities laws should be applied to crypto currencies. The is basically saying if we're going to regulate people under these rules we have to explain to them how it's going to work and we have to figure it out for ourselves. First a few more takes from twitter. Alex kruger wrote one point. Two five million. What does that princely. Sum tell you ryan celsius rights crack and paying one point two five million in. Cftc settlement is the regulatory equivalent of putting a quarter and a jar for swearing. You get accused of doing something bad with zero actual harm. Drop a coin all good. These are the eleventh hour regulatory news. Items crypto must not be so bad now less. There's no wood to knock on around you wherever you are. I'm not convinced that this'll be the last eleven hour regulatory news item. We'll see but the point still stands that this really isn't that bad and in fact it has indications that could be very good now one last note speaking of the sec and the afdc i mentioned previously that cfcc commissioner dan. Berkovitz was leaving the cftc. My attitude was a bit of. Don't let the door hit you on the way out given his attack on the industry over the summer. Well guess where he's headed. That's right the sec. Dan berkovitz will become the new general counsel of the sec. Starting november fifteenth. The office of the general council manages the sec's litigation efforts. It makes recommendations on enforcement actions rulemaking an interagency activity. Listen the optimistic take is that. Dan is very pro. Compliance and pro rule. So maybe he'll actually articulate some of those rules rather than just screaming howie and reeves over and over again. At least we can hope for now. I hope you're having a great week. I appreciate you listening and until tomorrow be safe. Take care of each other piece l. o. listeners if your financial adviser manager or if looking to learn more about bitcoin investment strategies and tools to share with your clients then. You're invited to attend coin. Desks bitcoin for advisors event on october six. It's fully virtual event. Experience design for advisors by advisers book on ways to get compliance ready in order to bitcoin advising to their practices. You can never to coin dot com slash events to secure your complimentary registration today. That's point desk dot com slash events. Or you can register for free. We'll see when october six and thanks for listening..
The Breakdown with NLW
Wells Fargo Launches Passive Bitcoin Fund for Rich Clients
"Wells fargo has registered a new private bitcoin fund with us regulators. The fund is operated in partnership with the breakdown sponsor night gig as well as investments who've worked together on other funds such as i believe the morgan stanley bitcoin funds. According to a coin desk source the new wells fargo fund is passively managed earlier reports had suggested it would be an actively managed fund for wealthy clients on top of the wells fargo news j. p. morgan's passive bitcoin fund. Also a partnership with nine was also filed with the sec. Today so if you wanna know what people think of bitcoin just keep watching what they do not what they say next on the roof today. These scars of past crypto winters run deep according to a report from the wall street journal coin. B.'s has a pretty significant cash reserve at the end of june those reserves stood at four point three six billion dollars. That's up from one point. One billion at the end of last year quinn basis. Cfo lsu haas said we want to ensure that we maintain those cash reserves so can continue to invest and continue to grow our products and services in the event that we go into crypto winter. She also said that part of it could go towards acquisitions. I just want to point out that in a market that so many think is absolutely batty because it's disconnected from fundamentals. Queen base as a company is not only profitable but is keeping a large number of cash reserves on hand in the event of a rainy day. Something which basically no other companies do. So i don't know. Man maybe crypto has something figured out that other industries have forgotten last on the brief today. Brian quinn tens is stepping down from the cftc. Brian quinn tens is one of the most vocal advocates for crypto among the us regulatory ranks. The commissioner's term technically expired. Last april and he had previously planned to step down by october twenty twenty but ended up sticking around which he's legally allowed to do until the end of this year. He has been fierce about giving crypto a fair shake in policy discussions as well as advocating for the cftc's role in regulating crypto. According to the wall street journal he'll be gone by the end of the month and headed to the private sector where he intends to quote keep innovation particularly related to crypto currency and defy relevant to my career
Unchained
"cftc" Discussed on Unchained
"Or monthly fees to worry about download the crowd dot com app and get twenty five dollars. When using the code laura l. a. u. r. a. The link is in that description back to my conversation with c. T. commissioners dan berkovitz and brian. Clinton's so the safety regulations are almost based on a policy of mandatory intermediation in a way. And what that means is that for certain transactions falling into certain categories. they're required to take place only una. Cftc regulated exchange which basically forces this intermediation which is obviously antithetical to defy so defy transactions can kind of get similar results to some commodities transactions. For instance you can create a collateralized position on maker dow and use that to meant die which is a staple coin back to the us dollar which you can use to buy more ether which is basically providing yourself more leverage but the this happens through peer to peer protocols and so there's no kind of like traditional counterparty that you know as as you would traditionally defined it and so some of these regulations in a way. Are you know they're they're made for a different world than than defy. And i wanna to get your thoughts on how this t. c. would regulate this type of activity if at all. Let me start off on this one so our regulations. I think it's it's fair to say it's accurate to say that our regulations really are based on intermediation model they don't necessarily mandated in in every instance but when all these regulations were being written they were based on exchange traded models or roker inter mediated models Many regulations are are centered around in soon the presence of of intermediaries ultimately many of these defy applications and. They're very innovative They approach the market in a different way. So maybe week week. We don't need intermediaries for everything that they're doing. And there's additional friction and cost and we could be more efficient and speedier that without the intermediaries and they accomplished that in a number of respects so the difficulty on the challenge is when you take out an intermediary from some of the functions in a regulatory system that presupposes their existence How do those two systems mesh. And that's that's that's that's a question That really defi poses to the regulators into the marketplace. That doesn't mean that they're that a you could totally do without all intermediation or the functions that the intermediaries do in in terms of in terms of what they do for example intermediaries the the the exchanges not only matchup parties which defy protocol you can do without the exchange but they also have a surveillance obligation and an affirmative obligation to to make sure that the markets are free from fraud or manipulation. They also basically a clearinghouse in a futures model. A clearinghouse standby hot stands behind the trade. So if one party somehow defaults than the clearinghouse will make it up. You could say. The defy protocol well. There's an automatic liquidity provider that will liquidate the contracts before you get to default and that may be and and if you don't need a clearinghouse that's an interesting development that you know we we certainly look at so there's some functions. I think you could do a better a without an intermediary but some intermediate intermediary may be necessary in the question is can you do it. Totally without intermediaries of many of the Ensuring the integrity of the code explaining to the retail persons. How system works. It's not everybody can go on. And and all of a sudden analyze the code and figure out that the code is appropriate. We have presumably if there's retail people on there. They'll need somebody to say yeah. This is a good code. Yes you can trust the system so I think we do. We do have a challenge with defy and in terms of how to how to fit this new technology within our within the regulatory structure but as currently exists the regulatory structure does impose obligations not just on the intermediaries but on the market participants certain obligations on the market participants themselves so Taking out the intermediaries doesn't necessarily take out all the regulations that might apply to a trade in a in a derivative of so it the person's operating platforms have to consider or even the terminology operating platforms persons developing platforms over developing technologies. May wanna Will need to consider all all of that. And at the moment with the way that many of these defy projects are setup. Who do you think is a natural entity for you to regulate for the cdc generals regulate. Well that's a great. That's a great question. And so one has to look at a number of factors and to see whether there is actual the the sufficient indicia of controller intermediation. A fine who's financing. it was making the decisions Is is somebody benefiting by it by by financial financially. Is there really an organization behind this. How decentralized or centralized is it can be very factual specific and it's evolving area. So we're we're looking carefully at at a number of things it's it's different. Different facilities and different protocols seemed to have different degrees of centralization or decentralization. And i think it's a. It's a some these presents a very interesting questions for us and earlier when you said that you're you you also regulate the market participants. Does that mean that this. Ut c. would consider enforcement actions against market participant Traditionally this is one benefit of intermediation traditionally in you've seen this in our forcement actions To today in the space where we have gone after We filed complaints and then take enforcement actions. Somebody is operating exchange and it's not registered or the basically as a broker is a futures commission merchant without being registered aren't forsman actions have been directed against those persons not against the transactions that have taken place on unregistered facility but transaction taken a futures transaction. That's not taking place not does not take place on. A futures exchange is unlawful under the commodity exchange act. But we haven't gone after the end users. We haven't gone. After the market participants traditionally so are focused traditionally has been on the entities who should have been intermediaries in those circumstances. But if for example. Let's take oil oil market. If one word to trade on a defy platform oil contract and you might have a market participant Who decides. I'd rather trade on an unregulated platform than later platform. You know that that would presented more difficult question for us whether somebody consciously decided to trade in unregulated environment to avoid our regulations than somebody who may a retail person who who who may be trade on something that somebody's offered them and they shouldn't have offered them without being unregistered. So that's traditionally how we we've we've approached enforcement but it doesn't we'll approach each case under the facts and circumstances fundamentally whether not we taking enforcement action the contract still is is is not a lawful contract under the commodity exchange act. There's a question about the basic enforceability of contract let alone whether we take enforcement action against the party's who entered into it so you're saying like a contra it's just a smart contract could be illegal just on its owner correct so that that's that that raises an interesting that that's that's the commodity exchange. Act that for.
The Breakdown with NLW
Stablecoins in the Hot Seat: Powell Calls Bitcoin a Substitute for Gold
"There was an absolute flurry of content and commentary yesterday around the place of bitcoin. Stable coins defy and the digital asset industry as a whole vis-a-vis. Us government regulation as well as how a digital dollar might shake that all up before we get into it. Let's at the terms of the debate. One of the competitors for this cycles top fudd is the government will ban it if it gets sufficiently threatening now to be clear banning depending on your sister could mean anything from an outright ban of use in holding too forceful seizure too limiting access to on and off ramps to the more benign from a commercial standpoint but no less threatening from a privacy standpoint integration of the full crypto infrastructure into the am l. kyc. Money surveillance apparatus. I've spent some time on this show looking into global versions where this fudd seems to be playing out in particular. We've been watching the evolving situation in india and nigeria india which seems gearing up for a bill that would have some sort of outright ban although at least one finance minister says that that's not the case and nigeria. Where the central bank of nigeria. I reiterated that banks should not be working with crypto users which they've then subsequently rolled back just a little bit either way however really what everyone has been focused on is the us particularly in the context of a new administration. The last administration had friends and foes alike when it came to bitcoin and crypto trump. Famously tweeted that he did not like bitcoin or crypto. But we didn't really take that seriously as a threat because it was so clearly about zuckerberg and libra mnuchin was a much bigger enemy. Probably wrote that text for trump's tweet even and clearly wanted to tighten the reins in his final act. He was trying to require exchanges to collect more information. When users transferred crypto to their own wallets on the flip side however there was brian brooks who was absolutely revolutionary at the office of the comptroller of the currency. The changes he oversaw are a huge reason. Why so many big institutions are now playing in this space. Why so many big traditional banks feel like they have to race to catch up to allow people to offer their customers crypto services however as we know from physics every action has a reaction and to some extent one reason why observers are so keenly watching the biden administration is to see how much they're going to respond or try to walk back with brooks in the occ changed on top of that. As the biden administration has come to power the price and volume around bitcoin stable coins and the rest of the digital asset industries have made them much more on ignore -able last time joe biden was in office. Bitcoin is about four hundred and thirty bucks. Now it's been over fifty thousand dollars for sixteen days in a row tether was barely out of diapers now. It has a market supply above forty billion in his doing upwards of one hundred billion dollars in volume per day combined with us dc. And you've got over. Fifty billion dollars of usd approximates there so lot more is at stake with that. People have been watching. Two things has come in and what they're saying on the who has come inside. Janet yellen is back for another round although this time is treasury secretary rather than as he chair gary genzer to is back. Although this time is as he c- chair. Instead of cftc chair of these two there is much more optimism around gessler who has done a pretty fair bit of work to understand where the crypto industry is coming from even teaching a course at mit about bitcoin and blockchain. And of course we have someone who still around in the form. Of jay powell. The federal reserve chairman. His ex factor. And all these discussions is the potential of a central bank digital currency a digital dollar. That could potentially shift the us's relationship with these projects now in terms of what we've seen these actors say so far over the last few months up until now it's been pretty standard fare one part. There's a lot of exciting potential here. One part we have to protect investors though and one part but it's also used by criminals over the last couple of days however we've gotten both comments and news that could shift as into our next phase of understanding what the us is relationship with. Bitcoin stable coins and other digital assets is going to look going forward. So let's talk about powell speaking about cdc's and cryptos at a bank for international settlements panel yesterday. Let's talk about the announcement of digital dollar prototypes coming this summer. And let's talk about new draft fat. If guidelines around cryptocurrencies. I up powell. Did a session yesterday with leaders from the bank for international settlements including augustine carstens. We talked about last week. He was asked about crypto currencies. And whether he saw them as a threat. And here's what he said. We call them crypto assets. You know. they're they're highly volatile. See bitcoin and therefore not real useful as a store of value in there not backed by anything. They're more of an asset for speculation. So they're also not particularly in use as a means of payment. It's more speculative asset. That's it's essentially a substitute for gold rather than for the dollar. And i think with crypto acids the the the public needs to understand the risks. The principle thing is there's the volatility there's also the outsized energy requirements requirement for for mining. And the fact that they're not backed by anything so let's break out these three reasons that he wasn't particularly impressed by cryptos. I this idea of volatility or that. It's just an asset for speculation. Basically he's dismissing bitcoin and any other crypto as something that he does not have to stress about or really factor into his consideration around global monetary competition while many. Bitcoin is grabbed onto the essentially a substitute for gold piece as a great tweet and knocked to the gold bugs. Who they're trying to convert or at least undermined powell was saying this more. Like a giant shooing away. A fly gold is to him clearly. Irrelevant an unimportant antiquated part of the fiat system that he sits at the helm of in that way a substitute for that thing does not present a threat
Bloomberg Daybreak: Asia
Top financial regulators believe markets 'resilient,' after Yellen meeting
"During all that volatility in recent trading. The assessment is the product of a meeting among financial regulators. Treasury secretary, Yellen said. There's agreement on the SEC making a timely study. We've got more from Bloomberg. Steve Matthews There were lots of concerns expressed about what had happened and the unusual trading and SEC is looking into this very closely. And we're still really waiting for the Biden economic team to the fully be confirmed, so I think it may take a while for the study that take effect. I mean, basically, they're saying the system is resilient. No financial stability issues, so the issues are really about trading and that's going to take a little while for that she see the look into Yellen said the SEC and the CFTC and reviewing with a trading practices, a consistent with investor protection and fair and efficient markets. Today's meeting followed a surgeon volatility involving a handful of stocks, and it raised questions over technical regulatory matters as well as concerned over the integrity of financial markets. Here in the U. S. We heard from Pel Itan Interactive after the closing Bell, the company's saying it
Murph and Mac
UGA face Cincinnati in Chick-Fil-A Peach Bowl matchup
"The Chick fil a Peach Bowl, Cincinnati and Georgia. The bear Cats are trying to finish their first undefeated season in program history. As long as you don't count the wonder no market 18 87 of the two unknown market 18 86. They're also trying to join you. CFTC you Boise State and Utah is the only non power five teams to complete perfect seasons. Since 2000 and four She stayed in Utah did it twice with the call of the Chick fil A Peach Bowl with Michael like junior Here's Dave O'Brien. Kevin. Thank you very much Great Tabby with us. Happy New Year, everybody. It's a real pleasure to be alongside Mike Golic Jr as we await the Chick fil A Peach Bowl kickoff between Cincinnati and Georgia, Cincinnati is Kevin mentioned. This may surprise many fans around the country undefeated at nine and no winning the American. I thought a conference and earning the right to play in a New Year's Day, six bowl. Up against Georgia. Bulldogs of Kirby Smart was 7 to 2 losses to then number two Alabama that was in Tuscaloosa and two number eight Florida 44 to 28. The Bulldogs are making their 24th. Consecutive bowl appearance. Like that is the longest active streak in America. Maybe down some starters, particularly on the defensive side, with five guys opting out, but it's a very deep team, and they expect to play a really good football team today. They
Unconfirmed: Insights and Analysis From the Top Minds in Crypto
What the Crypto Industry Could See Under a Biden Administration
"So to the question. I'm sure everybody's wondering about. He had asked for advocating on behalf of the industry or the community. How will that change. And to describe that sort of set the baseline by describing how or what. The strategy was the trump administration. And how you think that will change under a potential biden administration. Yes you have to remember. The biggest barrier to getting better policy in washington is an education barrier. This is a really new emerging fast emerging space. It's complicated it's difficult for policy makers to find the time to to learn the ins and outs of how it works Another challenge we have. Is that most of your everyday. Average consumers don't really do much with crypto yet. And so it's not top of mind. For policymakers by our strategy over the past couple of years has been to grow the base of champions on these issues and work with them to put forth. What we think are thoughtful. Good solutions Another important piece of what we do. Is we try to stop bad things from happening. Which we've succeeded. Add a couple of times on the legislative side because it's just as important to stop bad things than it is to get good things going forward and i would they an example if well there've been a couple bills that have been floated introduced like a very early version of the manage stable coins or securities. Act for example. You know that would have defined stable coins in a way that it wasn't intended to so the spirit of the legislation might might not have actually been not terrible but the way it was drafted was was would have been very hurtful to the industry and so we were able to work with that office get some of those definitions change but ultimately it stalled into able to prevent that from going forward the the because these are such niche issues. For policymakers we really had to rely heavily on those who have a personal passion for this space. So you know has to pursue. You've interviewed multiple times brian brooks. They've been fantastic. Allies champions to have and having them in those spots heads you know not only have they been able to put forth their own ideas. But they've been able to educate their peers their regulatory regulator peers on on cryptos that. That's positive any congress we. Have you know some good champions that are continuing to put ideas forward but the reality is it's a long way towards actually getting big comprehensive package across the finish line so as we look to the biden administration is if that is indeed dealing with. I mean who knows anything could change. I actually think the combination of a biden administration with the republican senate. Which i think is where we're going but again that could change too but those that is really really good for crypto and there are couple of reasons for that that the trump administration is a little bit mixed. Right as i mentioned we have. Has we have brian. They're great we'll secretary mnuchin. Who's not a big fan of the space Trump himself We have jay clayton. Who has been a skeptic Those are you know mnuchin. Clayton are appointed by trump And they've been standing in the way of getting something so as we look to the biden administration were hoping to be able to get educated crypto educated regulators in key positions in the sec. The cftc sec and doing what we can to try to influence those choices and in survivable played important role in picking. Those people are but because we have a republican senate. Those choices i think. We're going to be much more moderate than they would have. If if the democrats take the senate Under a democrat controlled senate than the progressives Have a little bit more of a say in who those. Those people are but If the senate banking committee is controlled by pat toomey mitch mcconnell's running the senate floor. Those guys are not going to approve of somebody. That's two left and they're gonna need to get some republican votes for those positions. So i think that's good for crypto because the support we've had from democrats tends to be those that are a little bit more to business that are open to You know private sector innovation. And i think that that that is actually a winning combination in. There's potential to get some great great
Wintrust Business Lunch with Steve Bertrand
CFTC says Kraft, Mondelez to pay $16 million in wheat price manipulation case
"The U. S. commodity futures trading commission the CFTC said today Kraft Heinz company and mom believes international will page sixteen million dollars in penalty regarding of wheat manipulation case that dates back to two thousand fifteen the CFTC said craft dam on the lease came up with a strategy to purchase and stand for delivery on more than three thousand futures contracts price and about ninety million dollars to send the market a Paul signal of the companies had demand for wheat the lawsuit was filed by breed futures and options traders who accuse crafted mondo lease of illegally manipulating the wheat price at their