A little clarity, please
Laughs with Gary Gensler
Welcome back. Is memecoin season upon us again? Last week’s hype around PEPECoin sure makes it seem that way. But whether the self-described “most memeable memecoin in existence” can push the (predominantly dog-themed) incumbents off of their throne remains up for debate.
Today: Gary Gensler gives crypto a good time (for once), Coinbase thinks about moving, and Taylor Swift’s due diligence pays off. Let’s go.
The Grilling of Gary Gensler
If politics are theater, the grilling of SEC Chair Gary Gensler in a congressional hearing last week was Shakespeare. Let’s unpack what happened.
What was the hearing about? Tuesday’s five-hour interrogation marked the House Financial Services Committee’s first oversight hearing of the SEC under Gensler’s leadership. Apart from his agency’s handling of the crypto sector, Gensler testified on new policies on environmental disclosures, SEC staff turnover, and more.
Oversight hearings are usually a snoozefest, but this one had crypto Twitter flooded with comical clips. The highlights:
Gensler weaseled out of answering the (increasingly exasperated) Committee Chair’s questions on whether ETH classifies as a security—despite having expressed that he deems "everything other than Bitcoin" a security in the past. The verbal duel quickly went viral.
Gensler was called an “incompetent cop on the beat” for allowing investors to fall victim to FTX under his watch.
He was also accused of intentionally driving crypto firms offshore, “ignoring the lessons learned” from FTX, and punishing U.S.-registered crypto companies like Paxos and Coinbase.
What this means for crypto: Gensler remained steadfast in his belief that U.S. securities laws are crystal clear and that the SEC is simply doing its best to enforce them. Crypto Twitter begged to differ.
Gensler (ridiculously) claims that there is clarity about which crypto's qualify as securities, but he can't say whether $ETH is one.
My opinion: This performance by @GaryGensler will make it very difficult for the SEC to ever win a case claiming that ETH is a security.
— MetaLawMan (@MetaLawMan)
Apr 18, 2023
Big picture: It’s a hopeful sign that U.S. lawmakers are considering crypto regulation. But oversight hearings alone are a far stretch from providing much-needed regulatory clarity—Congress will need to pass crypto-specific laws for U.S. crypto companies to move past the SEC’s regulation-by-enforcement approach.
At last week’s UK Fintech Week, Coinbase CEO Brian Armstrong indicated that the exchange might consider moving offshore. "I think in a number of years if we don't see that regulatory clarity emerge in the U.S. we may have to consider investing more elsewhere in the world," Armstrong said.
Where might “elsewhere” be? In general, Coinbase appears to be bullish on Europe as an emerging global crypto hub. With the EU pioneering the crypto licensing game and the UK's commitment to introducing a new regulatory regime for crypto assets, the region offers the regulatory clarity that U.S.-based crypto businesses can only dream of. Bermuda—where Coinbase received its license to operate last Wednesday—is another option.
Great meeting today with UK Economic Secretary and City Minister @griffitha.
The UK is moving fast on sensible crypto regulation to both drive economic growth AND consumer protection. Excited to keep investing in the UK. 🇬🇧
— Brian Armstrong (@brian_armstrong)
Apr 17, 2023
Zoom out: The global conversation around crypto regulation is transforming into a geopolitical one. As the U.S. regulatory landscape becomes increasingly complicated, other jurisdictions are looking to snag some of the U.S. crypto market share.
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Taylor Knew FTX Was Trouble
Victims of the FTX fraud are pointing their fingers at celebs who shilled the failed exchange in a billion-dollar class action lawsuit. Defendants include Tom Brady, Steph Curry, and Larry David.
The latest celeb to get served? Basketball legend Shaquille O'Neal, who was served last week after a somewhat dramatic chase during which the superstar was “hiding and driving away” from attorneys for the past three months.
Not on the list? Taylor Swift. She turned down a $100 million sponsorship deal with FTX last year by reportedly asking FTX reps some simple questions—like whether FTX sold unregistered securities. Doing your due diligence pays off…
(Can we still get a song about SBF though?)
In other news:
MiCA, the EU’s landmark crypto licensing regime, is set to take effect in 2024.
Forbes unveiled the Kingdom of Bhutan as a true crypto degen.
Ethereum’s Shanghai upgrade spurred institutional investors’ interest in staking.
OPNX, the bankruptcy claim exchange launched by 3AC founders Kyle Davies and Su Zhu, identified its investors—who denied any affiliation with the controversial project.
A $10 million Ethereum hack targeting OG crypto users has security experts baffled.
Crypto Job Board
And that's what you need on your radar today in crypto. Which meme do you want to see tokenized next? Shoot me a reply with your favorite contenders. Catch you back here next week!