7/3/22 Roundup

DeFi Weekly Roundup

July 3, 2022

Federal 

  • U.S. Securities and Exchange Commission Chair Gary Gensler stated that bitcoin is a commodity and other crypto currencies are not during an interview last week. “Some, like bitcoin, and that’s the only one, Jim, I’m going to say because I’m not going to talk about any one of these tokens [that] my predecessors and others have said [are] a commodity.”
  • Grayscale Investments has initiated a lawsuit against the SEC challenging the decision by the Securities and Exchange Commission to deny conversion of Grayscale Bitcoin Trust to a spot Bitcoin ETF.
  • During a hearing last week Rep. Bill Foster, D-Ill., promoted the idea of regulating cryptocurrency exchanges by implementing a digital passport, saying it’s the only way to make the industry less attractive to perpetrators of ransomware attacks and other transnational crime.
  • The Federal Reserve Board has released its twice-yearly monetary policy report, noting that “recent strains experienced in markets for stablecoins … and other digital assets have highlighted the structural fragilities in that rapidly growing sector.”

State 

  • Below is a summary of the latest legislative developments that have occurred this past week in state legislatures. Our master state legislative tracker working document can be found here. 
    • Arizona: HB 2204 – Would add virtual currency and NFT’s to tax deduction eligible assets. The bill passed both houses and proceeded to the Governor on 6/29.
  • Michigan: SB 0888 – Would create a cryptocurrency commission, was referred to committee in the House on 6/28.
  • The New York State Department of Environmental Conservation has denied bitcoin mining operation Greenidge Generation’s application to renew an air permit required to continue operating in New York. 

International

  • Russian lawmakers have approved a draft law that would potentially exempt issuers of digital assets and cryptocurrencies from value-added tax. In February the regulator gave blockchain platform Atomyze Russia the first license to exchange digital assets.
  • European Union lawmakers have agreed to a way forward on the traceability of crypto assets being traded in the bloc and wider market rules, to protect against market manipulation and set conditions for assets like stablecoins. Lawmakers struck a deal on next steps for the Markets in Crypto Assets (MiCA) framework. 
  • Despite its skeptical approach to digital currencies, it looks like the Bank for International Settlements  intends to allow banks to hold up to 1% of reserves in cryptocurrencies such as Bitcoin.
  • North Korean state-sponsored hackers were likely the perpetrators of a hack that led to the theft of around $100 million in cryptocurrency, according to analysis from blockchain researchers.

Industry

  • The Supreme Court ruling that limits the EPA’s ability to regulate carbon emissions from power plants, will likely have an impact on Bitcoin and other cryptocurrency mining operations that source  power from fossil fuels.