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SEC court win over Terraform and Do Kwon opens door for UST investigation

Terraform Labs’ court loss over Mirror Protocol opens the doors for greater action on the collapse of stablecoin TerraUSD.  Yesterday, the Second Circuit Court rejected Terraform Labs’ appeal against the Securities and Exchange Commission, upholding an earlier decision from the Southern District of New York. The SEC served founder Do Kwon with a subpoena as he prepared to go onstage to speak at Messari’s MainNet event in Manhattan back in November.  In the attempted appeal, Kwon’s lawyers argued that the …

Grayscale hires Obama’s former Supreme Court lawyer for legal push against SEC

Grayscale, a leading crypto asset manager, has retained a heavy hitter from the Obama-era Department of Justice. The new legal counsel, Donald B. Verrilli Jr., was the solicitor general under President Obama. The role is a Department of Justice appointment that represents the US government in cases before the Supreme Court. Verrilli is currently a partner at Munger, Tolles & Olson.  Jennifer Rosenthal, Grayscale’s VP of communications announced the hire in a June 7 Twitter thread, noting the firm’s “unwavering …

Lawmakers introduce bill to include crypto in Congressional disclosures

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 lawmakers introduced the bill on May 20, when it was referred to the Committee on House Administration as the “Cryptocurrency Accountability Act.” The bill would amend the Ethics in Government Act, a 1978 law passed in the wake of the Watergate Scandal requiring public officials to disclose their financial and employment history and the history …

CFTC roundtable on FTX proposal highlights barriers in clearing of digital vs physical assets

Cotton or oil markets cannot settle like Bitcoin — a fairly obvious point, but the distinction between the two was at the center of a May 25 roundtable hosted by the Commodity Futures Trading Commission. The roundtable centered on the CFTC’s consideration of a proposal from crypto exchange FTX to disintermediate derivatives trading on its platform.  Stakeholders from the derivatives trading industry appeared in force, with representatives from exchange operators CME and ICE joined by others from Citi, Goldman, FTX, …

Ted Cruz: ‘I want Texas to be the oasis on planet Earth for bitcoin and crypto’

Senator Ted Cruz wants his home state of Texas to be at the center of crypto development.    “I believe in Bitcoin,” Cruz said. “I want Texas to be the oasis on planet Earth for bitcoin and crypto.”   Cruz, a Republican, was giving the keynote address at conservative think tank the Heritage Foundation at a May 23 event called “Bitcoin and the American Experiment.” He was referencing the recent expansion of cryptocurrency mining in Texas.    The event featured …

BitMEX founder Arthur Hayes avoids jail time, sentenced to six months of home detention

Arthur Hayes, one of the founders of crypto exchange BitMEX, avoided jail time Friday during his sentencing hearing in New York. Hayes was handed a sentence of six months of home detention as part of a two-year probationary period. He had previously pleaded guilty to violating the US Bank Secrecy Act (BSA). “I’m ready to turn the page,” Hayes said before the sentencing hearing. A representative for Hayes declined to comment following the hearing’s conclusion. The prosecution had asked for …

Terra disaster fuels work of Congress on stablecoin legislation

As Terra and Luna spiral, lawmakers are finding themselves pulled into the crypto orbit. Stablecoins have been a priority for US lawmakers since November. Following TerraUSD’s collapse this week, Congress is suddenly facing the issue of algorithmic stablecoins.  “This proves that algorithmic stablecoins are probably the riskiest of all,” Rohan Grey, a professor at Willamette University’s law school and author of several pieces of crypto legislation, told The Block.  Maxine Waters (D-CA), chair of the House Financial Services Committee, is …

Federal Reserve says stablecoins are ‘prone to runs’ in new financial stability report

The US Federal Reserve has spotlit the risk of market runs on stablecoins in a newly issued report. In a May 9 report on financial stability, the Fed emphasized stablecoins alongside certain money market funds and bonds as areas of risk in the current financial system, specifically funding.  “Some types of money market funds (MMFs) and stablecoins remain prone to runs,” the Fed’s report reads. “Funding risks at domestic banks are low, but structural vulnerabilities persist at some money market …

As Congress weighs digital wallet regulation, focus turns to electronic cash proposal

As Congress weighed US rules for digital wallets on Thursday, lawmakers were particularly keen on the roles of data privacy and consumer protections.  The hearing focused heavily on Representative Stephen Lynch’s (D-MA) new ECASH bill. Introduced at the end of March, the bill calls on the Treasury to put out digital hardware that offers a user experience that’s as much like cash as possible. In practice, this would mean full privacy, and woudl bar a ledger of any kind.  Lynch …

Congressman Emmer preps bill to put some stablecoins under the SEC’s authority

Representative Tom Emmer (R-MN) is preparing legislation addressing dividend-producing stablecoins, The Block has learned. A discussion draft of a bill obtained by The Block would allow “stablecoins that include a dividend component” to register under the Securities and Exchange Commission. More specifically, that term means: “a stablecoin that distributes all or part of the income made from the investment of the assets backing the stablecoin to the holders of the stablecoin.” It is The Block’s understanding that this definition is …