DeFi Weekly Roundup

July 10, 2022

Federal 

• A new advisory notice released by the US Office of Government Ethics bars government officials who privately own cryptocurrencies from working on regulations and policies that could affect the value of digital assets.
• A potential class-action lawsuit filed in a California federal court last week accuses key players in the Solana ecosystem of illegally profiting from SOL, the blockchain’s native token that, according to the suit, is an unregistered security.
• The Federal Deposit Insurance Corporation is looking into Voyager Digital marketing of deposit accounts for cryptocurrency purchases, an FDIC official said, confirming a report in the Wall Street Journal.
• One of the top officials at the Federal Reserve made it abundantly clear that the central bank – which is also a powerful financial watchdog – is paying careful attention to the flaws showing up as the crypto sector founders.
• The Treasury Department announced a new framework for international engagement on digital assets—as mandated by President Joe Biden’s executive order. The release describes Departments ongoing efforts to do things through multilateral institutions like promote development of central bank digital currencies, lower the costs of cross-border payments and crack down on money laundering.

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 was signed by the governor on 7/6.

• New Jersey: A.4355 – Requires public high school students to receive financial literacy instruction on higher education costs, student financial assistance, and cryptocurrencies.
• California: S.B.786 – Would allow county recorders to issue birth, death and marriage certificates by means of blockchain.
• Colorado and Utah are moving ahead with programs that will permit taxes to be paid in cryptocurrency, but the idea has been shelved in other states. 

International

• Despite China’s sweeping bans on cryptocurrencies, domestic web3 talent is quietly flourishing, with many venturing beyond the country’s border according to a report from TechCrunch. 
• The Monetary Authority of Singapore says it is considering more restrictive crypto regulations in a letter to the country’s parliament.
• Trading volumes have plummeted in India after a new 1% tax on all transactions began being enforced on 7/1. 
• Binance, operating as Moon Tech Spain has received registration with the Bank of Spain as a Virtual Asset Service Provider.
• Russia’s financial monitoring agency, Rosfinmonitoring, said on Friday it was using software to track cryptocurrency transactions and hopes to improve its capabilities, as Moscow ushers in regulation on what one lawmaker dubbed “cryptomania”.
• The Binance Head of Policy capped off a lightning round of lobbying in the EU last week ahead of legislators meeting next week to iron out policy divisions over MiCA.

Industry

• Three Arrows Capital, a crypto hedge fund, filed for Chapter 15 bankruptcy in the Southern District of New York federal court after weeks of speculation about the company’s solvency.
• Meta will shut down Novi, the social media company’s digital wallet payments pilot, on 9/1, all but ending the libra stablecoin experiment three years after the company then known as Facebook unveiled its ambitious but ultimately doomed crypto payments gamble.

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.

DeFi Weekly Roundup

June 26, 2022

Federal 

• The House Appropriations Committee has released a report accompanying the Financial Services and General Government appropriations bill. There are several mentions of blockchain technology, highlights can be found here.
• At a Third Way event (Will China’s Authoritarianism Dominate the Digital World Order?), Carole House, Director of Cybersecurity and Secure Digital Innovation at the National Security Council, highlighted that the”White House is leading an assessment on the technology needs and capacity needs for a U.S. CBDC.” 
• Jerome Powell, told a Senate committee Wednesday that officials at the US central bank are watching the crypto market closely amid a period of heightened volatility.
• The Crypto Council for Innovation has pushed back against the Department of Labors guidance that precludes 401(k) administrators from including crypto investment options in their plans.
• The FBI has joined the investigation of hackers who stole $100 million in cryptocurrencies from a popular product on the Harmony network.
• On Thursday Michael Hsu, acting chief of the Office of the Comptroller of the Currency , said the recent fireworks in the crypto industry have further cemented his resistance to allowing lenders unfettered exposure to the digital assets markets.
•  Sen. Cynthia Lummis stated in an interview with Protocol “The cryptocurrencies with the largest market value,  bitcoin and ether  are definitely commodities that will be regulated by the CFTC…but there are a number of very small cryptocurrencies that are going to probably be at the SEC”. 

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 the both houses  on 6/24 and will likely proceed to the governor for signing.

• Michigan: SB 0888 – Would create a cryptocurrency commission, passed the Senate on the week of 6/23.
• Illinois: SB 3643 – Amends the Civil Administrative Code of Illinois to define cryptocurrency and cryptocurrency mining, it also modifies the definition of qualifying Illinois Data center and would promote the state as a mining hub. The bill lost a sponsor on 6/22, the bill has been held up in committee since 1/21. 

International

• Electricity to all 118 government-authorized mining operators in Iran has been cut off as of 6/22 ahead of seasonal spikes in power demand with no indication of return to action. 
• Crypto’s structural flaws make it an unsuitable basis for a monetary system, according to the Bank for International settlements. Instead, monetary systems could be built around CBDCs according to a report issued last week.
• The Ontario Securities Commission determined that Bybit and KuCoin exchanges were operating platforms that allowed Ontario residents to trade unregistered securities.
• Researchers at Russian bank VEB suggested that the country issue a gold-backed stablecoin for international payments to evade sanctions.

Industry

• eBay and KnownOrigin, one of the most innovative non-fungible token marketplaces, announced last week that eBay has acquired KnownOrigin.
• Uphold, a U.K. based exchange has announced it is shutting down its support for Venezuela due to “increasing complexity of complying with U.S. sanctions.”

DeFi Weekly Roundup

June 19, 2022

Federal 

• Five Republican senators, including Cynthia Lummis, have sent a letter to the SEC regarding its March bulletin, which established broad new requirements for crypto trading platforms.The lawmakers expressed concerns about lack of clarity and overreach of the SEC.
• The FBI and LinkedIn are working together to fight fraud. Linkedin has increasingly been used to lure investors into cryptocurrency schemes according to the report.
• Michelle Bond, the CEO of crypto trade organization the Association for Digital Asset Markets (ADAM) is running for U.S. Congress in New York.
• The SEC has begun an investigation into whether crypto exchanges have sufficient protections against insider trading according to a source inside the SEC.
• A bill intended to specify the rules and roles for crypto regulation could inadvertently “undermine” other market protections, SEC Chair Gary Gensler said Tuesday.

State 

• Below is a summary of the latest legislative developments that have occurred this past week in state legislatures. Our master state legislative tracker can be found here. 
  • Arizona: HB 2204 – Would add virtual currency and NFT’s to tax deduction eligible assets. The bill passed the House  on 6/14.

• Hawaii: S.B.2695 – Which establishes a cryptocurrency taskforce has been signed into law by the governor as of 6/17.
• Michigan: S.B.0888 – Would create a cryptocurrency commission, passed committee on the week of 6/17.
• Several U.S. states including Texas and Alabama are investigating Celsius Network’s decision to halt customer withdrawals.

International

• Panama President Laurentizo Cortizo partially vetoed on Wednesday a bill regulating the use of crypto as a means of payment for any transaction.
• A lobby group representing some of the largest financial services companies globally has warned the European Union that it needs to carefully consider the impact of issuing a digital euro. In a response to a European Commission consultation that closes Thursday, the Institute of International Finance  said there seemed to be an assumption that a CBDC is a good idea, even though the European Central Bank has yet to reach a decision. 

Industry

• Elon Musk, SpaceX and Tesla Inc.were sued for $258 billion over claims they are part of a racketeering scheme to back the cryptocurrency Dogecoin.

DeFi Weekly Roundup

June 11, 2022

Federal 

• Representatives Elissa Slotkin (D-MI) and Dusty Johnson (R-SD) have introduced a bill that would require members of Congress to disclose financial interests in crypto.
• The long awaited, wide-reaching, bipartisan crypto bill emerged Tuesday from Sens. Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.).
• US regulators are investigating whether Binance Holdings broke securities rules by selling digital tokens five years ago.
• Human rights advocates from around the world have sent a rebuttal  to the letter sent last week by prominent technologists to U.S. lawmakers. The rebuttal defends digital assets for the access they provide to people in countries where “local currencies are collapsing, broken, or cut off from the outside world.”
• Custodia filed suit against the U.S. Federal Reserve on Tuesday, saying the central bank was unlawfully delaying a decision on the crypto bank’s application for a master account.
• Crypto think tank Coin Center filed a lawsuit against the U.S. Treasury Department and Internal Revenue Service on Friday, claiming the crypto tax reporting requirement enshrined in last year’s infrastructure law is “unconstitutional.”

State 

• Below is a summary of the latest legislative developments that have occurred this past week in state legislatures. Our master state legislative tracker can be found here. 
• Colorado: SB 22-025 –  Would require the state treasurer to study the feasibility of using security token offerings for state capital financing. The bill was passed and signed by the governor on 6/7.
• Arizona: HB 2204 – Would add virtual currency and NFT’s to tax deduction eligible purchases. The bill was retained by committee on 6/6.
• Louisiana: HR 180 – Requests the Supervisory Committee on Campaign Finance Disclosure to study issues surrounding the acceptance of campaign contributions in the form of crypto-currency. Has been signed and was enacted on 6/8. 

International

• Lithuania is the latest member of the European Union creating its own crypto licensing regime, the development is motivated by concerns that EU laws might come too late to safeguard the sector’s reputation.
• Japan’s parliament passed a legal framework around stablecoins on Friday, providing a safety net for investors in the wake of last month’s terraUSD collapse that resulted in multibillion-dollar losses, according to a Bloomberg report.
• The Bank for International Settlements  said in a report Tuesday that the use of public blockchains results in fragmentation which means crypto could never be a suitable means of payment.
• South Korean crypto exchanges Upbit and Bithumb have announced  that they will delist Litecoin because of its newly activated privacy features.
• A leading lawmaker said France should recognize DAOs and NFTs in its legal system,  in a report published Wednesday.

Industry

• Crypto VC giant Paradigm has tapped Katie Biber as its new chief legal officer. Biber comes to the venture capital firm from financial technology company Brex and previously served as general counsel for Mitt Romney’s 2012 U.S. presidential campaign.

Bitcoin mining startup Bitzero, whose backers include Kevin O’Leary, has chosen North Dakota as the headquarters and hub for its North American operations.

DeFi Weekly Roundup

May 27, 2022

Federal 

• U.S. Federal Reserve Vice Chair Lael Brainard said that a CBDC could exist alongside stablecoins and provide a measure of safety. Brainard’s comments were part of testimony released in advance of her appearance in front of the House Financial Services Committee on Thursday.
• Attorneys for cryptocurrency-trading platform Coinbase filed a motion this month to dismiss a class-action lawsuit arguing that 79 of the tokens listed on the firm’s platform are unregistered securities. The case may determine whether digital tokens are, for legal purposes, more similar to stocks or to gold.
• The Federal Reserve finally released a much-delayed paper opining on the pros and cons of developing its own CBDC, but without coming to any firm conclusions.
• Securities and Exchange Commissioner Hester Peirce stated this week that the U.S. has dropped the ball on crypto regulation and the knock-on effects of that failure keep her up at night.

State 

• Below is a summary of the latest legislative developments that have occurred this past week in state legislatures. Our master state legislative tracker can be found here. 
  • New York: S 9410 –  Requires certain disclosures by a developer of virtual tokens in advertisements involving such virtual tokens; provides restrictions concerning advertising. The bill was introduced on 5/25. 
  • Louisiana: HCR 103 – Directs the Cash Management Review Board to consider and report on ways the state can utilize cryptocurrency. The bill entered committee on 5/25.
• Colorado: H.B. 22-1053 – Would implement the design, development, and deployment of an online program for agricultural producers to learn about the use and benefits of implementing new digital, data-driven systems to facilitate trade in agriculture. Was signed by the Speaker of the House on 5/27 and will become law. 

International

• SunCash, a financial institution authorized to provide Sand Dollars in the Bahamas, will allow holders of the Bahamian Sand Dollar to use facial recognition to authenticate themselves. It is the first time in history that consumers will be able to use facial recognition to buy goods and services with a CBDC.
• Binance will help Kazakhstan develop digital assets regulation as the central Asian country looks to develop its crypto industry beyond bitcoin mining.
• Portugal’s Congress rejected on Wednesday two bills that sought to tax cryptocurrencies, continuing uncertainty around the future of crypto taxation in the country. 
• Australia’s newly-elected Prime Minister – Anthony Albanese – reportedly has three top issues he hopes to address including climate change, cost of living, and imposing comprehensive rules on the cryptocurrency industry.

Industry

• The DeFi-focused startup Common has raised $20 million in its latest funding round. The funds will be used to further develop its platform, which aims to become the ultimate community management platform for DAOs. 
• Ethereum core developer Preston Van Loon told a panel this week that the blockchain merge is likely in August if everything goes as planned. 
• Tether on Thursday added to its roster of stablecoins, launching its MXNT token pegged to Mexico’s peso.

​​Korean crypto exchanges issued warnings on litecoin over confidential transactions this week. Similar warnings have come in advance of delisting in the past.

DeFi Weekly Roundup

May 22, 2022

Federal 

• The State Department, the Department of Treasury and the FBI have warned that North Korean agents posing as IT workers continue to target projects that involve virtual currency in the US.
• Venture capital firm Andreessen Horowitz submitted recommendations to the Senate Banking Committee, highlighting four areas where the U.S. government can govern cryptocurrency and blockchain technology including DAOs. 
• During a House Appropriations Committee hearing Wednesday, Securities and Exchange Commission Chairman Gary Gensler said he worries that more investors will be harmed in cryptocurrency markets. 

State 

• Below is a summary of the latest legislative developments that have occurred this past week in state legislatures. Our master state legislative tracker can be found here. 
  • Colorado: SB 22-025 –  Would require the state treasurer to study the feasibility of using security token offerings for state capital financing. The bill was passed and signed on 5/17. 
  • Missouri: H.B. 1472 – Will expand money laundering code to assist in stopping money laundering using crypto. Has passed both houses and been delivered to the Governor for signature on 5/18. 
  • Louisiana: HCR 104 – Would prompt the Dept. of Revenue to study and report on the feasibility of accepting virtual currency as a form of payment of taxes, licenses, fees, penalties, and interest due to the state. The bill left committee on 5/19.

International

• Portuguese Minister of Finance Fernando Medina has stated that cryptocurrencies will be subject to taxation in the near future, signaling a reversal from previous policies. 
• The regulation of crypto-assets is likely to be discussed at a meeting of Group of Seven finance chiefs this week in Germany according to French central bank head Francois Villeroy de Galhau.
• Sarah Pritchard, the executive director of markets at the United Kingdom’s Financial Conduct Authority reportedly said that the regulator will look at the recent volatility in the crypto markets when creating rules for the space in 2022.
• Cyprus has prepared its own legislation to regulate crypto assets and is likely to adopt it before Europe finalizes a common regulatory framework.
• Christine Lagarde, president of the European Central Bank, has warned that cryptocurrencies are worthless and should be regulated.

Industry

• Coinbase has launched the Coinbase Institute — “a global crypto-native think tank grounded in evidence-based research”. 

The joint U.S.-EU Trade and Technology Council will collaborate on the research and development of technology to track carbon emissions, and will look at blockchain technology as a potential tool for measuring and utilizing lifecycle greenhouse gas (GHG) assessments.

DeFi Weekly Roundup

May 13, 2022

Federal 

• A decline in the  price of cryptocurrency prompted Treasury Secretary Janet Yellen on Tuesday to reiterate calls for Congress to authorize regulation of stablecoins.
• Speaking with The Block, Democratic members of the Banking Committee are criticizing Republicans for downplaying risks that stablecoins pose. 

State 

• Below is a summary of the latest legislative developments that have occurred this past week. Our master state legislative tracker can be found here. 
  • Five states issued emergency orders on Wednesday requiring a metaverse casino with alleged Russian ties to immediately halt the sale of its NFTs, citing fraud, deceit and registration violations.The five states are Alabama, New Jersey, Texas, Kentucky and Wisconsin.
  • Colorado: SB 22-025 –  Would require the state treasurer to study the feasibility of using security token offerings for state capital financing. The bill was passed on Tuesday and now will go to the governor to be signed. 
  • Missouri: HB 2672 – Defines an open blockchain token as intangible personal property and requires creators of such tokens to identify themselves to the state prior to launch. The bill entered committee on 5/13.
  • New York: S 9275 – Requires certain disclosures by a developer of virtual tokens in advertisements. The bill was introduced on 5/12.
  • Louisiana: HCR 104 – Would prompt the Dept. of Revenue to study and report on the feasibility of accepting virtual currency as a form of payment of taxes, licenses, fees, penalties, and interest due to the state. The bill entered committee on 5/9.

International

• A joint body tasked with coordinating crypto regulation globally is sorely needed and could become a reality within the next year, according to Ashley Alder, chair of the International Organization of Securities Commissions, an association of market regulators.
• The European Commission is considering hard curbs on the ability of stablecoins to become widely used in place of fiat currency..
• Israel’s central bank said on Monday it had received public support for its plans to issue a digital shekel on grounds it would help the economy by supporting innovation.

Industry 

• Binance on Wednesday named Joshua Eaton, a former Deputy U.S. Attorney in the Northern District of California, as the deputy general counsel of the world’s largest cryptocurrency exchange.

Mining Capital Coin CEO and founder Luiz Capuci Jr. was indicted this week and accused by the DOJ of allegedly running a $62 million global investment fraud scheme. He’s the latest of severalcrypto company heads who have recently been similarly charged.

DeFi Weekly Roundup

May 8, 2022

Federal 

• The U.S. Securities and Exchange Commission is hiring another 20 enforcement staff for the unit focussed on crypto scams and cyberthreats. With the additions, the number of staff dedicated to probing securities law violations in fields like coin offerings, lending, NFTs and DeFi is 50.
• Both Republican and Democratic candidates in Ohio have made strong commitments to support the crypto industry in the wake of the primary election there on Tuesday. 

State 

• Below is a summary of the latest legislative developments that have occurred this past week. Our master state legislative tracker can be found here. 
• New York: A. 7389C – Would ban crypto proof of stake mining for two years. Passed the House on 4/26 and moved to the Senate.

• California Gov. Gavin Newsom issued an executive order Wednesday on cryptocurrencies, laying out a road map for regulatory and consumer protections and examining ways the state can take advantage of blockchain technologies and digital assets.
• Fairfax County, Virginia, is considering putting some of its pension fund money in two crypto funds that use a yield farming strategy.  

International

• The European Union’s financial services commissioner, Mairead McGuinness, has called for a new “global agreement on crypto” to protect investors and limit the environmental impact of bitcoin mining.
• Nine out of 10 central banks around the world are exploring CBDC’s, according to the results of a survey conducted by the Bank for International Settlements.
• European states were urged to clamp down on crypto-enabled money laundering by the Council of Europe’s MONEYVAL committee in a report published Wednesday.
• Uzbekistan has created a cryptocurrency regulatory framework which will require exchanges, mining pools, and crypto custodians operating in the Central Asian republic to be registered locally.
• Many Cubans are turning to cryptocurrency to avoid sanctions, starting next month the Central Bank of Cuba will issue licenses to virtual asset service providers.

Industry 

• Nvidia Corp. agreed to pay federal securities regulators a $5.5 million penalty over allegations that the chipmaker failed to adequately disclose revenue from crypto mining.
• Gucci has rolled out the crypto payment mechanism at its flagship stores in the U.S.

DeFi Weekly Roundup

May 1, 2022

Federal 

• U.S. lawmakers have reintroduced the Digital Commodity Exchange Act of 2022, a bill that would give the Commodity Futures Trading Commission a greater role in overseeing companies issuing or letting people trade digital tokens. 
• The Blockchain Association along with The Mortgage Bankers Association have disclosed that they are lobbying against The Russian Digital Asset Sanctions Compliance Act of 2022, introduced by Senator Warren and designed to curtail the use of cryptocurrency as a way to evade sanctions.
• Peter Thiel protege Blake Masters is using his Republican primary campaign for Arizona Senate to evangelize for cryptocurrency, vowing to fight regulatory efforts on digital currency.
• ​​Labor Department officials believe Fidelity Investments’s plan to allow investors to put bitcoin in their 401(k) accounts risks the retirement security of Americans. 

State 

• Below is a summary of the latest state legislative developments that have occurred this past week. Our master state legislative tracker can be found here. 
  • Missouri: H.B. 2571 –  Would add cryptocurrency to state laws concerning money laundering. Passed first reading and was scheduled for public hearing on 4/26.
  • Colorado: H.B. 22-1053 – Would implement the design, development, and deployment of an online program for agricultural producers to learn about the use and benefits of implementing new digital, data-driven systems to facilitate trade in agriculture. Passed the House on 4/24 and is now in the Senate. 
  • New York: A. 7389C – Would ban crypto proof of stake mining for two years. Passed the House on 4/25 and moved to the Senate.
  • Hawaii: H.B. 2108 – Establishes a program for the licensure, regulation, and oversight of digital currency companies. Passed both houses and is now in reconciliation to comply with amendments from both chambers as of 4/29.

International

• Binance announced on Thursday that it has closed several accounts associated with relatives of Russian officials, following last week’s announcement that the exchange was limiting services in the country.
• The European Banking Authority’s Joana Neto has said that new proposals outlined by the EU to monitor large transactions involving unhosted wallets are “very resource intensive” for exchanges and questioned what regulators would do with the collected data. 
• The Central African Republic has adopted bitcoin as legal tender, the president’s office said Wednesday, becoming the second country in the world to do so behind El Salvador.

Industry 

• Goldman Sachs Group Inc. offered its first ever lending facility backed by Bitcoin, in a significant step for a major U.S. bank that accelerates Wall Street’s embrace of cryptocurrencies.
• Fidelity plans to begin allowing 401(k) savings to be allocated toward crypto currency later this year for millions of investors.