Crypto execs meet with Biden administration over regulatory crackdown concerns: CNBC Crypto World

Crypto execs meet with Biden administration over regulatory crackdown concerns: CNBC Crypto World

today micro strategy shares jump after the self-proclaimed Bitcoin holding company announces a stock split former president Trump will speak at the Bitcoin 2024 conference in Nashville later this month plus Kristen Smith the CEO of the blockchain association and Sheila Warren the CEO of the crypto Council for Innovation discussed what was addressed at a meeting yesterday between crypto Executives and Biden Administration officials [Music] welcome to cnbc’s crypto world I’m McKenzie sigalos major cryptocurrencies are pretty flat after new data out this morning revealed that inflation dropped slightly in June compared to the month before and that helps with the case for the FED to start cutting rates as of no Eastern Bitcoin dipped by half a percent holding study above $57,000 ether fell slightly trading above $3,100 salana however dropped nearly 2% now taking a look at crypto Focus stocks micro strategy shares jump more than 22% as of midday after the company which is the largest corporate holder of Bitcoin announced a 10 for one stock split this morning now shortly after markets opened the stock Rose more than 99.5% micro strategy said that the shares will be split into class a common stock and Class B common stock to make it stock more accessible to investors and employees the move comes amid a lull for the price of Bitcoin which has been stuck in a tight range for about 4 months but which many investors expect to Rebound in the second half of this year okay let’s talk about the top stories crypto exchange bitmex pleaded guilty to one count of violating the bank secrecy act the US attorney’s office for the southern district of New York announced yesterday that bitmex admitted to violating the act by willfully failing to establish Implement and maintain an adequate anti-money laundering program now in a statement us attorney Damen Williams said that the crypto exchanges Founders and a long time employee first admitted in federal court in 2022 that the company operated in the US without any meaningful AML program as required by law Williams went on to say that as a result bitmex which was one of the leading crypto derivatives Platforms in the world from 2015 until 2020 opened itself up as a vehicle for large-scale money laundering and sanctions evasion schemes posing a serious threat to the Integrity of a financial system at one count of viol viting the bank secrecy act carries a Max sentence of 5 years in prison and a fine next FTX bankruptcy lawyers are pushing back against a claim that would make the state liable for nearly $264 million now for some context tyo Shan is a subsidiary of jump trading and it reportedly invested in serum a decentralized crypto exchange back in 2020 which became defunct about 2 years later following the collapse of its backers FTX and alamer research now in this objection filed yesterday FTX lawyers argu that osan’s purported valuation of its claim is quote baseless the subsidiary of jump trading alleges that Alam FTX is Sister hedge fund agreed to lend them 800 million serum tokens but that the tokens were never received in the filing FTX lawyers argue that since Alam failed to deliver the loan never commenced it goes on to say that Alam has the right to terminate the master loan agreement at any time which would also terminate without damages the loan at issue which never commenced now the filing also alleges that Tai mosan may be liable to the debtors for fraudulent transfers last up former president Trump is scheduled to deliver a speech at the Bitcoin conference in Nashville later this month now recently the presumptive Republican nominee has been pretty vocal about his Rising support of the digital asset industry in fact the Trump campaign announced in May that it would start accepting crypto donations this week the Republican Party officially adopted a new policy platform that would seek to support crypto Innovation Bitcoin 2024 is scheduled to take place July 25th through the 27th with Trump scheduled to speak on the last day meantime crypto Executives met with the Biden Administration in Washington DC yesterday to voice their concerns tied to the administration’s regulatory Crackdown on the industry Democratic Congressman Rana hosted the meeting his staff confirmed all right sticking with that meeting for our main story Kristen Smith the CEO of the BL blockchain Association was in attendance and I spoke with Smith about what was discussed and whether the industry’s concerns were addressed by the Biden Administration Kristen thank you so much for being here now you were at a round table led by Democratic Congressman rokana it included several industry players and members of Biden’s Administration as well walk me through this meeting and what you brought to the room and can you also weigh in on how many groups were there yeah no it was a really productive meeting uh that was held uh across the street from the White House yesterday with I think there were probably about 25 to 30 uh people within the crypto industry as well as a handful of folks from the administration uh Senator gilbran uh was there as well um but R Conor really deserves credit for pulling all of this together it was a really productive conversation I think you know for a long time the crypto industry has felt like they haven’t been treated fairly by the Biden Administration and I think that um you know this was a really important step towards increasing the um uh dialogue between the agencies and um we’re really excited to be a part of the discussion so we’ve seen a lot of momentum toward crypto in Washington in recent weeks how much of that do you attribute to voters that hold or believe in crypto is that a real Force out there even if it might just be one in five voters like a recent poll placed it yeah no it turns out the crypto voter is real it’s it’s really remarkable to see it’s stronger than I even would have thought it would have been yes as you noted there was a poll from about two months ago that said in one in five swing state voters considers cryptocurrency an important issue in the upcoming election uh very interestingly there was another poll that came out yesterday that said of the Republican voters who were not planning to vote for Donald Trump 133% of them are considering doing so because of his new Pro crypto stance and so this is an incredible um powerful force I think you know if you look at what crypto is it really represents a better future it represents an alternative to Big Tech or to traditional finance and I think people have this sense around the country that some institutions have failed them and they see crypto as an alternative so it turns out to be a very very powerful issue and one that is driving uh voter interest um uh in the polls and and and probably ultimately in November now as I mentioned this event was put on by a democratic congressman which you know the Democrats have faced criticism that they aren’t as crypto-friendly as Republicans do you see that tide turning and is it feeling more bipartisan in general this topic of crypto yeah no well cryptotech is nonpartisan and and so I think the interestes in crypto um is bipartisan we do have a couple of people on the Democratic side mostly Elizabeth Warren and Gary Gensler who have been very anti- crypto but we have a lot of members of the House and Senate on the Democratic side of the aisle that are very proc crypto and I think that this I was saying before the issues and values of crypto align very well with those values of the democratic party it’s a very democratizing uh technology and so you know I think as we particularly head into next Congress that we should um you know we should have uh fairly strong bipartisan support in the house and the Senate and the White House regardless of which party is in charge and we are seeing more bills moving through Congress obviously fit 21 there’s an attempt to overturn Biden’s veto on Sab 121 do you feel like there’s momentum on your side is crypto’s messaging getting across here yeah well I think the most promising legislative discussions right now are happening around Market structure um this is a market regulatory framework for the crypto industry uh as you noted fit 21 was The house’s version of this Market structure legislation and it was uh passed with overwhelming bipartisan support earlier this spring uh the ball is now in the Senate’s Court there’s a lot of discussions going on in a bipartisan fashion to try to figure out how they can get a vote in the Senate agriculture committee which would oversee uh the cftc which might regulate crypto um as well as potentially even moving that bill to the floor so there’s certainly a pathway for activity this year uh it is obviously a very narrow pathway there’s only about 45 legislative days left this year but we’re very um you know engaged and and hoping that that we make some progress because even if we don’t get all the way done this year that will be a better Foundation uh to start from when the new Congress convenes in January and what are the progress would you like to see from Capitol Hill on either side of the aisle yeah well in addition to Market structure I think getting something done on stable coins is important the president’s working group both in this Biden Administration and the Trump Administration last time identified this as an area where there is no appropriate Federal regulator and so what we need um is for to step in and pass a regulatory framework and the house uh looked at doing legislation on this already um the Senate uh has also expressed some interest so those conversations are are ongoing and that’s something else we would also love to see get across the Finish Line this year Sheila Warren the CEO of the crypto Council for Innovation was also at that meeting with the Biden Administration and I spoke with her as well to get her take on how the meeting went and what was accomplished Sheila thank you for taking the time now you were in Round Table led by Rana which included members of the Biden Administration and many crypto focused groups what was the most important point that you were trying to get across officials in the room well I was trying to reinforce first of all what all of us were saying which is that this Administration has not been particularly friendly when it comes to crypto especially not in recent years but also to really land the point this is the global technology other countries have not waited for the United States to act and also this is about more than just Financial Services the opportunity is much broader it’s about really um architecting in the internet for everybody so making those points and connecting them together and how receptive has Washington been lately I mean we’ve obviously heard a lot about changing sentiment on Capitol Hill but what have discussions with lawmakers looked like for you at the crypto Council for Innovation well you know we’ve always taken the approach this is a bipartisan issue or nonpartisan truly like any technology actually is and for us I would say we have had more interest I think from folks who aren’t on the core committee so I would say most people who are on you know the Banking Committee Financial Services where this is really in their obvious perview or jurisdiction have been interested for quite some time but now we’re seeing folks in other compies of jurisdiction who are also expressing a lot of interest and I do think that that’s forward progress and movement that we’re happy to see what are the biggest challenges facing the industry in Washington specifically now we’ve you know had some progress on crypto legislation though it’s not finalized yet but what’s the work that needs to be done that you’re telling lawmakers about or I mean even the push back that you might have gotten in the room uh during this meeting yesterday well it’s it’s not just the lack of regulatory Clarity that the industry has been talking about for many years now which really hasn’t been changed or fixed it’s what that lack of clarity and the lack of congressional action has actually led to namely regulation by enforcement by the SEC so you have a very active and aggressive SEC and a chair and chair Gary Gensler who seems to have made it a personal mission to essentially really police this industry whether or not that is within his jurisdiction remains an open question according to the court so here we are and I think resolving that resolving that particular dilemma figuring out with this novel asset class this novel technology and opportunity where does the jurisdictional authority lie which agency or combination of agencies is the appropriate one to be having oversight here and I think until we land that it’s very difficult for Builders to know what to do and how to move so to go back to that round table for just one second I think that one of the points I saw you make was that it’s important to approach crypto in a nonpartisan manner is that getting harder when you see Republicans Garner this perception of being more crypto-friendly especially with uh their presumptive nominee Donald Trump set to speak at Bitcoin 2024 well look I don’t think there’s any question that rhetorically the Republicans are more supportive at this moment in time than the Democrats at a party level but you have to remember that as I noted most people in this space most Washington lawmakers have not been paying a lot of attention to this despite best efforts right because it just hasn’t fallen within the relevant Committee of jurisdiction they haven’t felt that it’s an important enough issue to frankly take a position on so we find that most people that we talk to are still quite open-minded and have been and are even more openminded now that this is getting again more attention more press it’s getting more prominences an issue space that is important so I don’t feel that we’ve ever been in a place where this technology is not nonpartisan or even by partisan it’s just that we haven’t had I think the traction that we’re getting in this election cycle to get folks that haven’t been paying attention to sit up and realize this is really important I better have a point of view last question for you real quick that Round Table meeting did anything surprise you in terms of what was said in the room not in the slightest I mean I have to say I knew most folks in the room I’ve known them for some time uh I was really pleased tonally with how it went on both sides I don’t think anybody held back in expressing frustration or some of the concerns that they have uh about the approach that some administrative agencies have taken for example the SEC but I felt that that was met with a lot of openness a lot of interest and eagerness and curiosity to learn more uh and I felt that it was a very productive and and constructive conversation looking forward to next steps okay that’s all for crypto world today but we’ll be back again tomorrow and we’ll see you then [Music]

CNBC Crypto World features the latest news and daily trading updates from the digital currency markets and provides viewers with a look at what’s ahead with high-profile interviews, explainers, and unique stories from the ever-changing crypto industry. On today’s show, Kristin Smith, CEO of the Blockchain Association, and Sheila Warren, CEO of the Crypto Council for Innovation, discuss what was accomplished at a meeting with crypto executives and officials with the Biden administration.

Chapters:
00:00 – CNBC Crypto World, July 11, 2024
0:33 – Bitcoin flat
1:34 – The headlines
4:39 – Blockchain Association’s Kristin Smith
9:56 – Crypto Council for Innovation’s Sheila Warren

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Crypto execs meet with Biden administration over regulatory crackdown concerns: CNBC Crypto World