Investment Education

According to Odaily, Roger Bayston, the head of digital assets at Franklin Templeton, has shared his views on the ongoing interaction between financial innovators and the U.S. Securities and Exchange Commission (SEC). He stated that this interaction is fair and part of the process they are involved in. Bayston made these comments at the 2024 Consensus Conference. Like many regulatory bodies, the SEC tends to rely on legal precedents, which are often set in court. Despite frequent skepticism about the SEC's 'open door' policy, Bayston believes that the agency's actions are aimed at protecting the economy and are not insurmountable. He said, 'Without some discipline, persistence, and cooperative behavior with global regulatory bodies, we could not have survived in this trust-based industry for 76 years.' Bayston also noted that the situation with the SEC is changing compared to last year. He said, 'We have always had pleasant contact with the SEC... we are excited about their change in attitude.'

According to Foresight News, US Senator Cynthia Lummis, a supporter of the cryptocurrency industry, has criticized President Joe Biden's decision to veto the repeal of the controversial cryptocurrency accounting standards. Lummis stated that Biden missed an opportunity to 'correct' his stance on cryptocurrency assets. She vowed not to stand by idly and will continue to promote financial innovation. Earlier today, Biden vetoed a resolution aimed at overturning the Securities and Exchange Commission (SEC) cryptocurrency asset accounting standard SAB 121. The decision has sparked controversy and criticism from various quarters, especially those supporting the growth and development of the cryptocurrency industry. Senator Lummis, known for her pro-cryptocurrency stance, expressed her disappointment and pledged to continue her efforts to foster financial innovation.

According to Cointelegraph: In an intensified crackdown on electricity theft, the National Electricity Administration (ANDE) of Paraguay has seized a property hosting 2,738 crypto mining units in Salto del Guairá. The property was targeted after an illegal power connection was detected, with the illicit electricity usage estimated at 1.1 billion guarani ($146,000) per month. Source: Joaquin Moinigo Power-intensive crypto mining is a controversial topic in Paraguay, and the country's senate is examining a bill proposing a ban on crypto mining and related activities pending comprehensive legislation and reassurances from the national power supplier. Then-president Mario Abdo Benítez vetoed a bill regulating cryptocurrencies in the country in 2021, expressing concerns about the crypto mining provisions. Despite being home to major mining operations, including Bitfarms, Marathon Digital, and Tether, illegal mining remains a significant problem in Paraguay. The proposed bill that could temporarily ban crypto-related activities has currently been put on hold, but discussion about it is officially considered "postponed."

According to BlockBeats, on June 1, President Joe Biden announced on a Friday afternoon that he had signed a joint resolution of the House of Representatives, vetoing a resolution that would have abolished the Staff Accounting Bulletin 121 (SAB 121) of the U.S. Securities and Exchange Commission (SEC). SAB 121 is a controversial accounting guidance from the SEC that requires financial institutions holding customer cryptocurrencies to keep the assets on their own balance sheets. Critics of the guidance argue that it makes it very difficult for financial institutions to collaborate with cryptocurrency companies. In his veto announcement, Biden stated that he would not support any measures that 'endanger the welfare of consumers and investors.' He argued that abolishing SAB 121 would limit the SEC's ability to establish appropriate protective measures and address future issues, potentially weakening the SEC's broader powers in accounting practices. Hours before Biden's veto, banking industry groups and congressmen had sent two letters to Biden's desk, asking him to sign the resolution to overturn SAB 121.

According to PANews, Brian Nelson, the US Treasury Deputy Secretary in charge of terrorism and financial intelligence, has stated that the US Treasury has no intention of banning cryptocurrency mixing services. This announcement was made at a consensus conference. The Financial Crimes Enforcement Network (FinCEN) plans to classify cryptocurrency mixers as a 'major money laundering issue' by 2023 and requires Virtual Asset Service Providers (VASP) to report any crypto transactions involving mixers to the agency. Nelson clarified that this proposal is not aimed at prohibiting the use of mixers, but rather to increase transparency. He also expressed understanding of the crypto users' desire for financial privacy. However, he suggested that the crypto industry and the Treasury should work together to find ways to enhance privacy without supporting terrorist financing.

According to PANews, US Federal Judge Robert Shelby has ordered the Securities and Exchange Commission (SEC) to pay approximately $1.8 million in legal and takeover fees. This order is related to the regulator's civil case against Debt Box, which was dismissed on May 28. The judge pointed out that the SEC showed 'malicious behavior' in the temporary injunction to freeze Debt Box's assets. This ruling is a significant victory for Debt Box, as it means the SEC cannot continue with the current case. In July 2023, the SEC filed a lawsuit against Debt Box, accusing the company of implementing an illegal cryptocurrency scheme worth $50 million. The documents submitted by the company indicated that the commission made false statements when trying to obtain a temporary restraining order against the company. Many in the cryptocurrency field have taken this as an example of regulatory overreach.

According to PANews, PayPal Digital has been granted a limited purpose trust license by the New York State Department of Financial Services (NYDFS). This type of license is typically held by digital asset custodians and stablecoin issuers. In August of last year, PayPal launched its stablecoin, PYUSD, with Paxos Trust Company as the issuer. The acquisition of the trust license by PayPal Digital could potentially be aimed at taking over the custody of PayPal customers' crypto assets and transferring the issuance of stablecoins internally.

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According to Odaily, the US House of Representatives has recently passed the bipartisan cryptocurrency bill, Financial Innovation and Technology Act of the 21st Century (FIT21). However, it is important to note that the bill has not yet become law. Policy observers have stated that the likelihood of the bill being passed in the US Senate is quite low. The White House, US SEC Chairman Gary Gensler, and several congressmen have also issued stern statements about the bill. Despite years of regulatory and corporate struggles, the crypto community views this as a victory, especially the builders behind decentralized platforms, which are often overlooked by existing legal frameworks. Under FIT21, fully decentralized digital assets will be eligible to become commodities. One of the criteria is that the issuer or so-called affiliated person cannot hold more than 20% of the tokens and project voting rights. Centralized tokens that do not meet this condition will be deemed securities. Therefore, they will fall under the jurisdiction of the SEC, while decentralized tokens will be regulated by the CFTC. Rashan Colbert, Policy Director of decentralized trading platform dYdX Trading, stated that the regulation is 'almost' clear for the crypto industry. He said, 'Industry participants may find it difficult to meet different decentralization thresholds, and this kind of back-and-forth movement between two regulatory agencies may be very troublesome in practice.' Colbert also mentioned that it is unusual for the CFTC to regulate the commodity spot market. Nevertheless, this is a big step, especially for DeFi projects. He added, 'This bill makes us more confident because we know we have clear rights to continue doing what we are currently doing, which is exactly what the industry really wants now.'

According to Odaily, US banks have expressed concerns over potential inflation risks due to robust spending in the service sector, a tight labor market, and fiscal uncertainty. Despite the PCE inflation index gradually nearing its target, the resilience of US economic growth and a positive output gap make any monetary easing seem premature. This supports the view that the easing cycle may begin in December. The impact and uncertainty surrounding the US elections could be another reason why the US may not want to lower interest rates prematurely. The US banking sector's perspective on the economic situation provides a crucial insight into the potential future of the country's financial landscape. The concerns raised about inflation risks and the reluctance to lower interest rates prematurely highlight the challenges faced by the US economy. The potential start of an easing cycle in December could signal a shift in monetary policy, which will have significant implications for the US and global economies.