Ripple Gets Trickle Of SEC Docs From Privilege Challenge

By Dean Seal

Ripple Labs won access to only a small portion of a trove of U.S. Securities and Exchange Commission documents the agency claimed are privileged, as discovery in the most closely watched enforcement case in the crypto industry enters its final month.

A New York federal magistrate judge on Thursday ordered the SEC to give Ripple a selection of handwritten notes agency staffers took during certain meetings with third parties unrelated to Ripple, as well as an emailed draft of a 2018 speech in which a former SEC official said that sales of mainstream cryptocurrencies Bitcoin and Ether were not subject to securities laws.

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The Year In Review: Crypto Is Here. Get Used To It, Washington.

By Roslyn Layton

After more than a decade of dismissing the revolutionary potential of blockchain technology, Washington finally woke up in 2021. As the total market cap of all blockchain-enabled cryptocurrencies surpassed $3 trillion, the Beltway bandits realized the bigness of the crypto market: big taxation, big regulation, and big campaign donations.

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Crypto executives urge light touch as Congress mulls new regulation

By Pete Schroeder and Katanga Johnson. December 8, 2021. (Reuters).

WASHINGTON – Top executives from six major cryptocurrency companies including Coinbase and Circle on Wednesday urged Congress to provide clearer rules for the booming $3 trillion industry, but warned that overly tough restrictions would push it overseas.

The U.S. House of Representatives Financial Services Committee hearing marked the first time the industry’s senior leaders have explained their businesses to U.S. lawmakers amid growing concerns cryptocurrencies may pose systemic risks and hurt investors.

Crypto executives repeated calls for careful, bespoke rules rather than forcing the industry to comply with existing regulations.

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Who Will Protect Investors From The SEC?

By Roslyn Layton. December 5, 2021. (Forbes).

Last Wednesday, the current and previous chairmen of the Securities and Exchange Commission (SEC) shared what was billed as a “fireside chat” to open the Digital Asset Compliance & Marketing Summit. Gary Gensler and Jay Clayton spoke, took no questions, and agreed that the multi-trillion dollar crypto innovation space is a dark, menacing threat that legitimate crypto entrepreneurs must follow opaque rules or face crippling SEC lawsuits. Gensler made it clear that there is no difference between “fraudsters” and “good-faith actors” in crypto – both are lawbreakers endangering the public.

Many in the audience of crypto industry leaders, just maligned as crooks, were stunned. Gensler repeatedly said that “platforms need to come in and get registered,” as if everyone knew what he was talking about. Perianne Boring, the head of the Digital Chamber of Commerce tweeted, “People in the room are looking around and asking, “register as what?””

It’s a fair question given that the exchange Coinbase – the only crypto company to have gone public on the stock market – tried “going in”. Upon sharing to share its lending platform information, the SEC slapped Coinbase with a subpoena and the threat of what Gensler affectionately calls “the enforcement tool.”

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Biden and Trump S.E.C. Chiefs Trade Tips on How to Regulate Crypto

By Ephrat Livni. December 2, 2021. (The New York Times).

Regulators on the left and right rarely agree on policy. Yet, when it comes to cryptocurrency, two men who have led the Securities and Exchange Commission are remarkably aligned: The technology and offerings may be new, but old rules still apply.

Jay Clayton, the Republican S.E.C. chairman under President Donald J. Trump, interviewed Gary Gensler, the current S.E.C. chief in the Democratic Biden administration, on Wednesday at the Digital Asset Compliance and Market Integrity Summit in New York.

Mr. Clayton now advises crypto companies, and Mr. Gensler taught crypto classes as a professor at the Massachusetts Institute of Technology before joining the agency. When Mr. Clayton asked his successor whether the S.E.C. intended to regulate crypto, Mr. Gensler replied, “I don’t think you mind if I would quote you back to you.”

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Waging War on Cryptocurrency Would Be a Mistake for Democrats

By Former Rep. Albert Wynn (D-MD). November 30, 2021. (Bloomberg Law).

When innovation brings change to an industry, the government’s role is to observe first and then manage the change as necessary. The government should not be an obstacle to progress. The Democratic Party has long been a champion of inclusionary innovation, smoothing the disruption to families and workers while spreading the benefits as widely as possible throughout the economy.

I fear, however, that with the fintech revolution rising through decentralized finance and blockchain technology, some in our party are mobilizing for a war on cryptocurrencies that could be futile and economically costly to the country.

There is wide agreement that regulation is needed for digital assets. There must be strict protections against money laundering and fraud in coin offerings and the financial products emerging in this $2 trillion asset space.

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SEC Chair Gensler’s War On Crypto Is About His Resume

By Roslyn Layton. October 29, 2021. (Forbes).

Securities and Exchange Commission (SEC) Chair Gary Gensler’s crusade against cryptocurrencies has surprised many. His three-year stint as a senior advisor at the Massachusetts Institute of Technology (MIT) Media Lab’s Digital Currency Initiative before leading the SEC suggested that he would bring an enlightened approach to crypto. No such luck.

Gensler’s foray into cryptocurrencies appears to be more a professional resume builder than a coherent regulatory vision for the innovation that can democratize finance. Along the way, he’s been happy to play along with the SEC’s word games on whether crypto is a currency or security, as long as it moves him to center stage. It’s part of the DC playbook: the regulatory white knight confirmed on the premise to make things right, implements some industry-friendly policy marketed as pro-consumer, and then takes the next plumb job.

Many misread Gensler. His MIT perch conferred the appearance of academic expertise on blockchain. It turns out there is little record of him writing or speaking about the technology until the school hired him in 2018. His few academic presentations were co-authored by the driving force of the school’s crypto program, Media Lab director Joichi Ito. Gensler’s MIT speeches and interviews were not about the substance of blockchain but rather commentary curated to make him look like a policy expert.

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Congress Needs To Provide Guardrails for the Cryptocurrency Revolution

By Josh Hammer, Opinion Editor. October 21, 2021. (Newsweek).

The Chinese Communist Party poses the most comprehensive 21st-century threat to the American nation, the American people and the American way of life. The first half of this century will be defined by how the U.S. meets the Chinese challenge across the full spectrum of economic, national security, geopolitical and cultural issues. And an easily neglected aspect of our new great-power competition with our Far East arch-foe now cries out for diligent and prompt attention: safeguarding the fruits of the nascent, but ascendant, cryptocurrency revolution.

Last month, China effectively banned all cryptocurrency trading and mining, which the Communist Party increasingly views as a threat to its planned “digital yuan” sovereign digital currency, which may be released as early as 2022. The People’s Bank of China, the Chinese central bank and Federal Reserve equivalent, barred international exchanges from providing cryptocurrency services to Chinese investors and speculators. It also banned financial institutions and digital exchanges from facilitating domestic crypto transactions.

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Clayton, Gensler behind looming over-regulated crypto disaster

By Charles Gasparino. October 17, 2021. (New York Post).

A private meeting between then-Securities and Exchange Commission Chair Jay Clayton and a newly minted professor at the MIT business school named Gary Gensler appears to have set the stage for the misguided course of crypto-regulation we see today. 

Gensler, of course, would go on to take Clayton’s job after Joe Biden’s 2020 presidential victory. It’s unclear if the hyper-ambitious Gensler was actually prepping for that outcome by asking for the meeting. What is unmistakable: his intention to shape regulatory policy for crypto that has increasingly become a disaster.

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