This week was a big week in crypto markets as debate raged over a section and two proposed amendments to Biden’s $1 Trillion Infrastructure Bill (more links below).
The Bill itself is more than 2,000 pages long which leads one to wonder just how many of our representatives have read it. If we generously were to assume that over 50% have, I wonder how many actually understand it in its entirety? It’s simply too massive for any one representative to grok.
The specific language in question for the crypto industry broadly defines developers of open source code as brokers, making them liable for any breach of securities laws that might happen on the networks they create. I’m not an expert on the matter, but I believe there were some landmark cases in the 1990s that protected code under the First Amendment to the US Constitution (the one on free speech). There are some other issues with the bill regarding crypto including the exclusion of ‘proof of work’ miners but not ‘proof of stake’ validators from stringent securities and anti-money laundering laws. Interesting to note that proof of stake has a much smaller impact on the environment than proof of work, so this seems counter to the majority of the ESG language in the proposed bill.
$100 donation to every Congressman/woman who can tell me what SHA-256 is.
Nonetheless, watching the crypto industry rally to “educate” (lobby) representatives has been both exciting, fascinating, and disheartening. On the one hand, it’s great to see an industry of outsiders and miscreants come together to influence a key piece of legislation. On the other, it gives us all a deeper perspective on how the sausage is made. If our representatives are this clueless on this tiny industry they have decided will pay for the $1 Trillion spendings, what other nonsense likely comes from this 2,000 page Frankenstein impacting industries that most of us barely understand.
If nothing else, this battle has shown just how mature the crypto industry has become. While conversations in our favorite forums like Twitter and Telegram still skew toward trolling by anonymous Frogs, some very serious industry leaders rallied in the eleventh hour to fight some dangerous regulation. We showed crypto is not anti-regulation per se, but pro “thoughtful” regulation. The bill will offer much-needed guidance on certain issues that have remained in limbo for years. This certainty will help larger institutions gain comfort on crypto and help grow the space.
Whether that aligns with the origins of Bitcoin and its crypto-anarchist creator(s) is unclear, but in many ways, our industry has “grown-up,” and learned how to play the game in order to survive.
Excited to see what happens next.
What I’m Reading
Ideas
The Digital USD Could Change the Fate of America, Tascha Che
Markets
White House Extends Student Loan Repayment Pause Until January 31, 2022
Metaverse, NFTs, and Digital Collectibles
Kain Warwick, Creator of Synthetix, on Why NFTs will be Bigger than DeFi
Cryptopunk Explorer wins Upshot Hackathon
OpenSea Trading Volume Goes Parabolic, Passing $60M per day
Crypto (Seems like a Regulatory Week)
Janet Yellen Lobbying Against the Wyden-Lummis-Toomey Crypto Amendment, Coindesk
Senator Cynthia Lummis Infra Bill Update, August 8
Senator Pat Toomey on his Proposed Amendment to Infrastructure Bill, August 7
Binance US CEO, Brian Brooks, Quits Citing ‘Strategic Differences’
Gary Gensler Remarks to the Aspen Security Forum on Cryptoassets (Transcript)
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