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Crypto Is Here. Get Used To It, Washington.

Crypto Is Here. Get Used To It, Washington.
Written by publisher team

After more than a decade ruling out the revolutionary potential of blockchain technology, Washington has finally woken up in 2021. With the total market capitalization of all cryptocurrencies that power blockchain past $3 trillion, Beltway bandits have realized the enormity of the crypto market: big taxes, big regulation, and donations Great campaign.

House and Senate: Parallel Universes on Capitol Hill

A small but growing bipartisan cadre in Congress has begun working with the US crypto industry on a regulatory framework to link the needle of innovation in the US economy with protections from fraud and crime. That effort was taken a step further at a lengthy House Banking Committee hearing this month, which was moderated with bipartisan confidence by Committee Chairman Maxine Waters (D-CA) and ratings member Patrick McHenry (R-NC). The quality of dialogue between the panel and a panel of distinguished crypto leaders showed that members are doing their part, and that the industry is collaborating to develop a regulatory framework. The risks and rewards are discussed frankly with minimal exaggeration.

In the parallel universe of the Senate, many of its eccentric leaders see cryptocurrency as magic. This disturbing disconnect surfaced in the Senate Banking Committee’s corresponding hearing with talking points that seemed to have been taken from Mondel Ferraro’s ill-fated 1984 presidential campaign. Among the witnesses, or “witch hunters” as they were, were clearly anti-crypto law professors Hilary Allen and Alexis Goldstein. From the Open Markets Institute for the pseudo-consumer pro. The point of listening seems to inject fear, uncertainty, and doubt into the record. Most of the questions were directed to Allen and Goldstein in the huge presence of Comrade Elizabeth Warren (D-MA). Unfortunately, the two other witnesses who could have provided the facts and technical expertise – Dante Disparte of Circle and Jai Massari of Davis Polk – were largely ignored.

A parallel universe extends from the Senate side of Capitol Hill down the street to the Securities and Exchange Commission (SEC). In every public appearance, SEC Chairman Gary Gensler has emphasized his way of doing crypto: regulation by enforcement. There seems to be no desire to write clear rules, provide unambiguous guidelines, or use a restrictive principle against any player in the space. As noted earlier, Gensler, like a good party activist, uses the Securities and Exchange Commission as a springboard for the Cabinet-level appointment of the Treasury Secretary. But like Warren and others, Gensler appears to have miscalculated that cryptocurrency would be an easy target and that the securities laws of the 1930s would be effective weapons.

Rips in the SEC strategy

The SEC’s case against Ripple marked its first anniversary. It continues to evolve like the cryptocurrency trial of the century, potentially becoming the defining case since the 1946 Supreme Court decision on Howey, the ruling in which Gensler and Warren suspended their ambitions. Howey determined what constitutes a security at 20y A century before the Internet, blockchain databases and decentralized ledgers were conceptualized. As Congress has delayed updating securities law for the digital age, the parties will seek it out in court.

The Securities and Exchange Commission’s massive lawsuit against Ripple essentially argues that the agency is not bound by due process or fair notice and can provide a storm of arbitrary and volatile guidance to crypto companies and still sue them for not understanding what is illegal. Furthermore, he argues, Howey’s decision gives the agency the ability to declare the token itself to be a security, and not just a way to package it and sell it to others. In fact, many owners of XRP digital assets do not know anything about Ripple, yet the SEC claims that they were in a joint organization. The crux of the defense is that the SEC has caused $15 billion in damage to XRP holders of digital assets who have been stunned by its volatile behavior.

Gensler inherited Ripple’s case from a Republican administration, but his policies show greater enthusiasm for the power-drenched SEC and the firm belief that Ripple and its top executives should have known about XRP’s registration as collateral eight years ago, when the SEC barely knew What is a blockchain? Judge Annalisa Torres of the Southern District of New York is likely to issue decisive rulings in the case early next year. This will either encourage Gensler to prepare for attacks on other platforms, or hit the Securities and Exchange Commission to overstep its authority.

Dangerous Game: Party Politics Before Elections

By a very small margin, the anti-crypto faction of the Democratic Party is demonizing the multi-trillion dollar crypto space. Vigilant industry associations will not tolerate it, but millions of retail crypto holders are making no secret of their growing concern about Gensler’s allies and Democrats. Pew Research Center reports that 27 million Americans are current or former holders of digital assets, and the numbers skew disproportionately between young people, blacks, Hispanics, and Asians. Disruptive innovation often opens markets to the people at the bottom of the pyramid, threatening institutional finance at the top. The anti-crypto stance taken by many Democrats is hurting the very people the party claims to represent.

The rise of the XRP army

Retail owners congregate across numerous social media platforms, reveal embarrassing information about SEC’s past and present senior officers, and flood congressional offices with thousands of letters calling for Gensler to be reined in. Their efforts led a government watchdog to sue and investigate the Securities and Exchange Commission. Conflicts of interest by SEC officials in the Ripple case. On 60,000 retail XRP holders They were accepted as friends of court against the Securities and Exchange Commission, the agency that is supposed to protect them. Dozens of crypto influencers with their own media platforms have a mass audience that rivals cable news networks, and they’re starting to talk about the midterm elections. Republicans don’t need to put much effort into getting a crypto vote as long as Gensler and Democrats continue to destroy themselves.

If 2021 is the year crypto shows its economic promise, 2022 will be the year holders of cryptocurrency demonstrate their legal and political power. Just like those who said a decade ago that Bitcoin will never be worth anything, many will eat their words with regret that the war on digital currencies will be an easy process.

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