Two U.S. senators have urged U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler to refrain from approving additional crypto exchange-traded fund (ETF) applications. The lawmakers cautioned: “However vulnerable bitcoin may be to fraud and manipulation, markets for other cryptocurrencies are far more exposed to misconduct.” Lawmakers Say SEC Should Not Approve Spot Crypto ETFs […]
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US Senators Slam SEC for Operating in ‘Unethical and Unprofessional Manner’ in Debt Box Case
Five U.S. senators have expressed their concerns to the chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, regarding the agency’s enforcement action against crypto firm Debt Box. The court found that the SEC made “materially false and misleading representations.” The lawmakers stressed: “We are greatly concerned by the Commission’s conduct in this […]
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US Senators Introduce Bill ‘to Combat Illicit Use of Crypto Assets’ Through Public-Private Partnership
U.S. lawmakers have introduced a bill “to combat the illicit use of crypto assets.” The Preventing Illicit Finance Through Partnership Act “will allow federal regulators to work with the private sector to gain insight into the often-misunderstood world of crypto to weed out bad actors without crushing an entire emerging industry,” Senator Cynthia Lummis described.
Preventing Illicit Finance Through Partnership Act 2024
U.S. Senators Bill Hagerty (R-TN) and Cynthia Lummis (R-WY) introduced the Preventing Illicit Finance Through Partnership Act of 2024 on Wednesday. Hagerty and Lummis are members of the Senate Banking Committee.
The bill seeks to “establish an information-sharing pilot program to combat the illicit use of crypto assets,” according to the bill’s text. The legislation targets illicit finance through enhanced communication between federal law enforcement agencies and private companies. Senator Lummis opined:
There are bad actors in every industry and crypto assets are no exception but make no mistake — crypto itself is not the problem.
“The Preventing Illicit Finance Through Partnership Act will allow federal regulators to work with the private sector to gain insight into the often-misunderstood world of crypto to weed out bad actors without crushing an entire emerging industry,” the lawmaker from Wyoming described. “This public-private partnership will help inform regulators about the use cases for crypto assets and clear the way to establishing federal rules of the road that will keep the industry in America and solidify crypto’s role as the next frontier of financial innovation.”
The announcement provides some details of the pilot program to be established by the Preventing Illicit Finance Through Partnership of 2024, stating:
The program would be chaired by the Attorney General and composed of 20 voluntarily participating money services businesses and cryptocurrency companies.
Ten of the 20 participants will be money services businesses and the other 10 will be private sector entities from the crypto industry. The pilot program shall terminate after five years of the date of enactment of the bill.
There are other efforts aimed at addressing crypto’s illicit use, including Senator Elizabeth Warren’s Digital Asset Anti-Money Laundering Act. However, critics have dubbed Warren’s bill a “crypto ban” bill. This perception has fueled counter efforts like the “Stop the Crypto Ban” petition on Change.org. In addition, Warren, alongside 100 other lawmakers, sent a letter in October last year urging the Biden administration to tackle the role of crypto in illegal activities and terrorism. “Congress and this administration must take strong action to thoroughly address crypto illicit finance risks before it can be used to finance another tragedy,” the letter reads.
However, the volume of illicit activities in crypto transactions pales in comparison to those in traditional finance. Blockchain data analytics firm Chainalysis said Thursday that “2023 saw a significant drop in value received by illicit cryptocurrency addresses.” The firm noted: “Our estimate for the share of all crypto transaction volume associated with illicit activity also fell, to 0.34% from 0.42% in 2022.”
What do you think about the Preventing Illicit Finance Through Partnership Act 2024? Let us know in the comments section below.
7 Senators Urge Treasury and IRS to Rapidly Implement Crypto Tax Reporting Rule
Seven U.S. senators have called on the Treasury Department and the Internal Revenue Service (IRS) to “implement the proposed crypto broker reporting rule as rapidly as possible.” The lawmakers stressed: “We are alarmed by the self-inflicted two-year delay for the rule’s implementation.”
Senators Want Crypto Tax Reporting Rule Implemented Swiftly
Senators Elizabeth Warren, Angus King, Richard Blumenthal, Gary Peters, Bernie Sanders, Sheldon Whitehouse, and Brian Schatz sent a letter to Treasury Secretary Janet Yellen and Internal Revenue Service (IRS) Commissioner Daniel Werfel on Oct. 10 concerning cryptocurrency taxation. “We write regarding the Treasury Department and Internal Revenue Service’s (IRS) recently proposed rule concerning tax reporting requirements for crypto brokers,” the letter begins.
“We are alarmed by the self-inflicted two-year delay for the rule’s implementation, which would contravene the requirements of the bipartisan Infrastructure Investment and Jobs Act, disadvantage law-abiding Americans, and cause the federal government to lose out on billions of dollars in tax revenue,” the lawmakers emphasized, adding:
We urge your agencies to limit this troubling delay and implement the final rule as swiftly as possible, while maintaining the rule’s substance in the face of industry attacks.
The reporting rule requires brokers to “provide crypto users with the information they need to file their taxes through a modified 1099 form” and “provide the IRS with income information from crypto trades so that would-be tax avoiders are easier to track down,” the senators explained. Moreover, the rule defines “brokers” to include “any party who facilitates crypto sales while in a position to know the identity of the seller and the nature of the transaction,” the letter clarifies.
“Limiting any further delay in the implementation of the Administration’s proposed rule would combat industry efforts to evade regulation, provide clarity to law-abiding taxpayers, and generate billions in tax revenue from a chronically tax-avoidant industry,” the lawmakers noted, adding:
Accordingly, we request that the Treasury Department and IRS implement the proposed crypto broker reporting rule as rapidly as possible and ask that you provide an update by October 24, 2023 on your efforts to do so.
What do you think about the senators asking the Treasury and the IRS to implement the proposed crypto tax reporting rule as rapidly as possible? Let us know in the comments section below.
US Senators Press Biden Administration for Measures to Counter ‘Serious National Security Threats’ Linked to North Korea, Crypto
U.S. senators have pressed the Biden administration for measures to counter “serious national security threats” posed by North Korea’s dependence on cryptocurrency. According to the lawmakers, North Korea is using crypto “to evade harsh sanctions and support its ambitions to project geopolitical power through nuclear weapons and ballistic missiles.”
US Lawmakers Concerned About ‘Serious National Security Threats’ Linked to North Korea, Crypto
U.S. Senators Elizabeth Warren (D-MA), Tim Kaine (D-VA), and Chris Van Hollen (D-MD) have pressed the Biden administration for measures to counter crypto-related national security threats.
In their letter, dated Aug. 3, to Brian E. Nelson, Treasury Department’s Under Secretary for Terrorism and Financial Intelligence, and Jake Sullivan, the White House’s National Security Advisor, the lawmakers wrote: “We write to express concern about the national security threat posed by North Korea’s reliance on digital assets to circumvent international sanctions and embargoes and fund its illegal weapons programs.”
The letter cites several sources detailing North Korea’s illicit use of crypto, including White House Deputy National Security Advisor for Cyber and Emerging Technology Anne Neuberger who stated that about half of North Korea’s missile program has been funded by “cyberattacks and cryptocurrency theft.” The senators stressed:
Given the pressing nature of this threat, we ask the Administration to provide details on its plan to stop North Korea … from using digital assets to evade harsh sanctions and support its ambitions to project geopolitical power through nuclear weapons and ballistic missiles.
The lawmakers concluded their letter with five questions concerning the Treasury’s “plans to address the serious national security threats posed by North Korea’s dependence on cryptocurrency.” The senators requested the answers be delivered to them no later than Aug. 16.
A United Nations report revealed in February that North Korea stole more crypto assets in 2022 than in any other year. Blockchain analytics firm Chainalysis similarly found that North Korea-linked hackers, such as the members of the Lazarus Group, were particularly active last year. They stole an estimated .7 billion worth of cryptocurrency across several hacks, according to the data firm.
What do you think about the U.S. senators probing the Biden administration for a plan to address the threats posed by North Korea’s crypto dependence? Let us know in the comments section below.
US Senators Reintroduce ‘Accountability for Cryptocurrency in El Salvador (ACES) Act’
U.S. Senators Jim Risch and Bob Menendez have reintroduced the “Accountability for Cryptocurrency in El Salvador Act,” known as the “ACES Act,” for discussion in the Senate. The piece of legislation seeks to examine the level of adoption of bitcoin as a legal tender in El Salvador and how this might affect the financial stability of the country.
‘Accountability for Cryptocurrency in El Salvador (ACES) Act’ Reintroduced in U.S. Senate
U.S. Senators Jim Risch and Bob Menendez have reintroduced the “Accountability for Cryptocurrency in El Salvador Act,” also known as the “ACES Act,” to be discussed in the U.S. Senate. The piece of legislation, that was previously presented to Congress on March 23, 2022, seeks to examine the process applied to make bitcoin legal tender in El Salvador, as well as its effect on the economy of the country.
When reintroducing the ACES Act, U.S. Senator Jim Risch reinforced the perceived need to assess the possible effects of using crypto as legal tender. He stated:
We must seek greater clarity on how the adoption of bitcoin as legal tender may impact El Salvador’s financial and economic stability, as well as El Salvador’s capacity to effectively combat money laundering and illicit finances.
Elements of the Act
If enacted, the act would compel the Secretary of State and the Secretary of the Treasury to produce a report about the adoption of bitcoin and legal tender in El Salvador. This would include an assessment of the legislation that allowed it, the impact it is having on the personal economy of Salvadorans, and also the gaps that this implementation could create regarding compliance with the guidelines issued by the Financial Action Task Force (FATF) on money laundering and terrorism financing activities.
The report should also include how the introduction of bitcoin could affect the relations of El Salvador with multilateral finance organizations, like the World Bank and the International Monetary Fund, as well as its international financial stability.
Finally, it must also examine how bitcoin adoption might influence the remittance flow between El Salvador and the U.S., and how it might undermine the usage of dollars in the country.
Salvadoran President Nayib Bukele had expressed his disbelief on the text of the ACES Act before, stating:
Never in my wildest dreams would I have thought that the U.S. Government would be afraid of what we are doing here.
What do you think about the reintroduction of the “Accountability for Cryptocurrency in El Salvador (ACES) Act” in the U.S. Congress? Tell us in the comments section below.
Elizabeth Warren Blames ‘Crypto Risk’ for Silvergate Bank’s Liquidation, Critics Dismiss Senator’s Claims as ‘Terribly Misinformed’
After Silvergate Bank announced its voluntary liquidation, U.S. senator Elizabeth Warren is attributing the financial institution’s downfall to “crypto risk.” According to Warren, she had previously warned about Silvergate. However, some critics are dismissing Warren’s opinion as “terribly misinformed” and claim that she is “tossing out egregious accusations.”
Crypto Proponents Offer Different Perspectives on Silvergate Bank’s Downfall After Elizabeth Warren Blasts So-Called ‘Crypto Risk’
Hours after Silvergate Bank announced its liquidation, U.S. senator Elizabeth Warren (D-MA) tweeted about the financial institution’s demise. Warren once again referred to cryptocurrencies as risky and expressed disappointment about Silvergate’s failure, which she deemed “predictable.”
On March 9, U.S. Senator Elizabeth Warren tweeted, “I warned of Silvergate’s risky, if not illegal, activity—and identified severe due diligence failures. Now, customers must be made whole & regulators should step up against crypto risk.” The Massachusetts senator’s statement was met with criticism almost immediately after its publication. “You caused a bank run with spurious accusations and are now claiming you predicted it—Olympic-level mental gymnastics,” one individual responded to Warren’s tweet.
The individual’s comment about Warren starting the Silvergate bank run stems from the letter that Senator Warren, along with Senators Roger Marshall (R-KS) and John Kennedy (R-LA), wrote. The bipartisan letter contained numerous accusations as it requested information on a “massive crypto scandal.” In response to Warren’s tweet on Thursday, one person asked the politician if she had ever managed to “not be terribly misinformed while tossing out egregious accusations?”
Some critics argue that Warren is employing the age-old propaganda that blames objects rather than individuals and businesses for failure. This approach is akin to inanimate weapons causing violence on their own, a pencil writing a hateful letter autonomously, or cryptocurrencies causing harm to investors rather than the crypto business operators. Many critics on Twitter disagreed with senator Warren’s views on the matter. In response to her allegations, crypto CFA Ram Ahluwalia offered a different perspective on the Silvergate situation.
“Silvergate, the first crypto bank, faced a bank run that led to its downfall,” Ahluwalia wrote. “Despite facing allegations around AML, it was not these issues that ultimately caused the demise of [Silvergate Bank]. The responsibility for bank supervision lies with the Executive Branch, but this process was cut short. A senator’s letter, amplified by social media, undermined public trust in Silvergate, ultimately leading to a crisis of confidence.”
Upon reviewing Warren’s Twitter thread, there appears to be little to no support for her commentary in the post, despite the fact that the tweet has received 942 likes and was seen more than 724,000 times. Most of the responses to Warren’s tweet express disgust for her statements on the matter. As usual, criticism of the politician’s actions likened them to politicians breaking legs to sell crutches.
“This is why I hate political self-elevation at the expense of others,” one person told Warren. “Crypto [and] blockchain solves many issues. Unfortunately, it doesn’t solve posturing, self-serving interests, and fear-mongering by elected officials. Thanks for making it harder for honest, hardworking people.”
What are your thoughts on Senator Warren’s views on cryptocurrencies and their role in the downfall of Silvergate Bank? Do you believe her accusations were justified, or do you think they were misguided and harmful to the institution? Share your opinions in the comments below.
Democratic Senators Push Against Meta’s Idea of Bringing the Metaverse to Teens
Meta, the social network company, is getting some pushback on its plan to market and bring Horizon Worlds, its flagship metaverse app, to teens. Democratic senators Ed Markey and Richard Blumenthal directed a letter to the company to halt these actions, citing concerns about the interactions that teens could have in Meta’s virtual worlds.
Meta Sees Opposition to Metaverse Adoption Plans for Teens
Two Democratic senators have written a letter asking Meta to stop its recently reported plan of opening its metaverse world to teens. Ed Markey and Richard Blumenthal, Democrat senators from Massachusetts and Connecticut, criticize the idea of opening Horizon Worlds, Meta’s flagship metaverse app, to teens 13 years and up, citing diverse factors that might endanger them through the interactions available in this virtual world.
The letter differentiates between standard virtual reality experiences and Horizon Worlds, explaining that “the cumulative set of immersive virtual reality experiences a teenager would confront on the socially-driven Horizon Worlds are distinct from their use of a virtual reality headset to, for example, play a specific single-player game. Inviting young teens into this environment, therefore, poses serious risks.”
Markey and Blumenthal call for halting the plan to protect the health of these young users and their privacy in the metaverse, calling out the company for its previous mistakes involving this demographic.
Meta’s Teen Adoption Push
The Wall Street Journal reported on Meta’s plan of including teens in its metaverse on Feb. 7. According to an internal memo obtained by the news outlet, the company’s new strategy included opening the Horizon Worlds experience to teens aged 13 years old and up. This would constitute a change from the current policies of the app, which only allows users from 18 years old to roam the virtual world.
According to WSJ, Meta’s memo reinforces the need of pushing these services to young users in order to keep growing. Horizon Worlds VP Gabriel Aul reportedly stated:
Today our competitors are doing a much better job meeting the unique needs of these cohorts. For Horizon to succeed we need to ensure that we serve this cohort first and foremost.
While Horizon Worlds experienced rapid growth in its initial stages, growing its user base tenfold soon after release in Decemeber 2021, the app has been criticized for its buggy state even by Meta’s own employees. In October, VP of Metaverse Vishal Shah acknowledged that the issues present in the app hampered the experience for its users and that even employees of the company were not spending much time using it.
What do you think about the opposition that Meta is experiencing regarding bringing Horizon Worlds to teens? Tell us in the comments section below.
US Senators Probe Crypto Exchange Binance About ‘Potentially Illegal Business Practices’
Three U.S. senators have asked crypto exchanges Binance and Binance US for documents and answers pertaining to “potentially illegal business practices.” The lawmakers told Binance CEO Changpeng Zhao (CZ): “Your actions have called into question the legitimacy of your business and the safety of your customers’ assets.”
U.S. Lawmakers Probe Binance
U.S. Senators Elizabeth Warren (D-MA), Chris Van Hollen (D-MD), and Roger Marshall (R-KS) sent a letter to Binance and Binance US on Wednesday, calling for the crypto exchanges to “provide transparency about potentially illegal business practices.”
The letter, addressed to Binance CEO Changpeng Zhao (CZ) and BAM Trading Services CEO Brian Shroder, asks for documents and answers concerning each crypto exchange’s “finances, risk management, and regulatory compliance as it faces investigations into potential crimes,” the senators detailed. Binance and its U.S. affiliate, Binance US, are two separate entities. BAM Trading Services is doing business as Binance US.
Citing various media reports claiming that Binance is facing multiple investigations by law enforcement and regulators following the collapse of crypto exchange FTX, the senators wrote:
Binance and its related entities have purposefully evaded regulators, moved assets to criminals and sanctions evaders, and hidden basic financial information from its customers and the public.
“Your actions have called into question the legitimacy of your business and the safety of your customers’ assets and raised concerns about the potential impact of these activities on the stability of the crypto market and the broader financial system,” the senators stressed.
The letter also notes that Binance hired French auditing firm Mazars to perform a proof-of-reserves (POR) audit on its bitcoin holdings. However, the auditing firm subsequently “deleted the webpage containing the report” and paused its activity relating to proof-of-reserves audits for crypto firms, the letter adds.
The senators concluded their letter by requesting “documents and answers” pertaining to a list of questions no later than March 16. The documents requested by the lawmakers include “complete copies of all Binance and Binance subsidiary balance sheets from 2017 to the present,” and their internal anti-money laundering (AML), countering the financing of terrorism (CFT), and know-your-customer (KYC) policies and procedures.
A copy of the senators’ letter was sent to Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC); Rostin Behnam, chairman of the Commodity Futures Trading Commission (CFTC); and Merrick B. Garland, U.S. Attorney General with the Department of Justice (DOJ).
What do you think about U.S. senators probing Binance and Binance US about “potentially illegal business practices”? Let us know in the comments section below.
US Senator’s Resolution Encourages Capitol Gift Shops to Accept Cryptocurrency
A U.S. lawmaker has introduced a resolution that encourages Capitol gift shops to accept cryptocurrency payments. He stressed that lawmakers “should increase accessibility and signal our support for the burgeoning cryptocurrency industry to those who visit Capitol Hill.”
US Senator Advocates Crypto Payments
U.S. Senator Ted Cruz (R-TX) announced Thursday that he has reintroduced the Adopting Cryptocurrency in Congress as an Exchange of Payment for Transactions (ACCEPT) Resolution. Cruz first introduced this resolution in November 2021. The senator from Texas said:
Cryptocurrency is generating new jobs, encouraging entrepreneurs to invent new values and creating new hedges against inflation, and presenting new opportunities. It is also increasingly being used as a secure form of payment for goods and services.
“This is precisely why we, here at the United States Capitol, should increase accessibility and signal our support for the burgeoning cryptocurrency industry to those who visit Capitol Hill,” he added.
Senator Cruz’ explained that his bill “would require the Architect of the Capitol, the Secretary of the Senate, and the Chief Administrative Officer of the House of Representatives to encourage Capitol gift shops to accept cryptocurrency as a form of payment.” They would also be required “to enter into contracts with vendors who accept cryptocurrency as payment for food service and in vending machines within the Capitol complex.”
Cruz further said:
An added advantage of using cryptocurrency as a form of payment in the Capitol is that it would provide foreign tourists who visit our nation’s capital each year with a safe and secure payment option without the need to pay unnecessary and often costly currency exchange fees.
The lawmaker has long been a pro-bitcoin senator. In May last year, he said he is “incredibly bullish” on bitcoin. “I have a weekly buy that’s an automatic buy every week of bitcoin because I believe in dollar-cost averaging,” he noted at the time.
Senator Cruz also introduced a bill in April last year to prohibit the Federal Reserve from developing a direct-to-consumer central bank digital currency (CBDC) “which could be used as a financial surveillance tool by the federal government, similar to what is currently happening in China,” Cruz noted.
What do you think about Senator Ted Cruz pushing for gift shops on Capitol Hill to accept payments in cryptocurrency? Let us know in the comments section below.