Seeds of Wisdom RV and Economic Updates Sunday Morning 1-26-25
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CRYPTO ADVOCATES FOCUS ON CONGRESS AS GOP TAKES CONTROL OF US GOV'T
The Republican Party now has total control over the United States Senate, the Executive Branch, and the House of Representatives.
Following the re-election of President Donald Trump in the United States, crypto advocacy groups have shifted their focus to key players in both chambers of Congress, which advocacy groups have characterized as the most pro-crypto Congress in history.
Ron Hammond, the senior director of government relations at the Blockchain Association, told Cointelegraph editor Jesse Coghlan that the Senate Banking Committee and the House Financial Services Committee will play pivotal roles in shaping pro-crypto policies.
Congressman French Hill was selected as chairman of the House Financial Services Committee in December 2024 and is highly critical of the regulatory approach under the previous administration.
Following the appointment, Hill said introducing a crypto market structure bill within the first 100 days of the legislative session was a priority for the GOP leadership.
On January 24, the House Committee on Oversight and Government Reform launched an investigation into Operation Chokepoint 2.0 and sent letters to crypto industry leaders and advocacy groups requesting input.
The Senate Banking Committee
Senator Tim Scott, chairman of the Senate Banking Committee, is pro-crypto and promised sweeping regulatory reform for digital assets prior to the 2024 United States elections.
Speaking to an audience at the Bitcoin 2024 conference, Scott said the former leadership at the Securities and Exchange Commission (SEC) was preventing pro-crypto policies and promised change to US voters.
“We have to get rid of the folks who are in the way,” Scott told pro-Bitcoin voters in the Summer of 2024. Scott also promised Bitcoin voters:
“The one thing I will absolutely guarantee will be done is watching your legislation get a vote, pass the Banking Committee, and we’re going to fight to make it a law in the United States of America.”
Following Scott's pronouncement, Republicans won an electoral sweep in November 2024, securing both chambers of Congress, the Presidential election, and the popular vote.
Senator Lummis appointed chair of the Senate Banking Subcommittee on Digital Assets Wyoming Senator Cynthia Lummis was appointed by Scott to chair the Senate Banking Subcommittee on Digital Assets in January 2025.
Lummis said the primary goals of the subcommittee included passing comprehensive digital asset legislation and preventing overreach by government regulatory agencies.
The Senator added that legislative initiatives would include a comprehensive market structure bill, stablecoin regulations, and provisions for a Bitcoin strategic reserve.
Challenges and looking ahead
Stand With Crypto, a crypto advocacy and voter education group, told Cointelegraph that the current Congress has a "mandate" to pass comprehensive crypto regulatory reform. The group said:
"The 52 million crypto users and innovators across America elected a historic pro-crypto Congress in 2024 — sending 278 pro-crypto candidates to the House of Representatives and 20 to the Senate."
Despite this, challenges remain, as crypto regulations may take a backseat to more pressing political issues or pushback from anti-crypto politicians.
Industry executives and the crypto community have accused Democrats of being anti-crypto and stifling the regulatory process.
Some of crypto's most vocal political opponents include Democrat Senators Elizabeth Warren, Dick Durbin, and California Rep. Brad Sherman — all of whom are still in office after being re-elected in 2024.
Joe Doll, the general counsel for NFT marketplace Magic Eden, also told Cointelegraph that Republicans likely have only two years to pass crypto legislation before midterm elections take place.
Historically speaking, midterm elections tend to see the political pendulum swing the other way and change the balance of power in Congress, Doll said.
The attorney said that Republicans already have a slim majority in the US House of Representatives, which has narrowed to only three seats since Doll spoke to Cointelegraph in December 2024.
According to Doll, a gridlocked government would impede the passage of pro-crypto legislation in the United States.
@ Newshounds News™
Source: CoinTelegraph
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SEC REVOKES CRYPTO ACCOUNTING RULE FOLLOWING PRESIDENTIAL TRANSITION
While crypto advocates cheer the SEC’s decision, skeptics like Jacob King warn that the industry’s shift toward bank custody contradicts Bitcoin’s original vision of decentralization.
▪️In a dramatic policy shift, the SEC has revoked a crypto regulation that once shackled banks and custodians, marking a fresh start under the new administration.
▪️The controversial rule, introduced in 2022, had drawn fierce criticism from industry leaders who saw it as an unnecessary hurdle for financial institutions dealing with digital assets.
▪️Under Biden’s SEC, crypto firms found themselves entangled in legal battles, with enforcement actions reaching record highs before tapering off in the final months of Gensler’s tenure.
In a significant policy reversal, the United States Securities and Exchange Commission (SEC) has rescinded Staff Accounting Bulletin No. 121 (SAB 121), a controversial accounting guideline that mandated companies holding digital assets for clients to record these holdings as liabilities on their balance sheets.
The revocation came shortly after President Donald Trump’s inauguration, signaling a shift in the regulatory approach toward the emerging economy.
Background and Industry Reaction
Enacted during President Joe Biden’s administration in March 2022, SAB 121 aimed to enhance transparency and risk management in the burgeoning crypto sector.
However, industry stakeholders criticized the rule for imposing burdensome reporting requirements, complicating the custody of digital assets, and increasing compliance costs.
The banking sector also expressed concerns, noting that the rule hindered their ability to serve as secure custodians for digital assets.
The recent revocation has been met with approval from crypto advocates. SEC Commissioner Hester Peirce, known for her pro-crypto stance, celebrated the decision by posting on X (formerly Twitter):
“Bye, bye SAB 121! It’s not been fun.”
Criticism from Outside the Crypto Industry
Despite the positive reception within the crypto community, the repeal has faced criticism from some financial analysts. Jacob King, CEO of WhaleWire, claims the crypto advocates are wrong for believing the revocation would allow banks to custody Bitcoin BTC for customers.
In response, Carl Horton countered the tweet, noting that many still want loans using their BTC as collateral:
“Some people, like children and the elderly, need custodians. Others want smooth inheritance transfers and others want loans using their BTC in custody as collateral. BTC is freedom money and you can interact with it any way you want.”
Previous SEC Actions Against the Crypto Industry
Meanwhile, under the leadership of former SEC Chair Gary Gensler during the Biden administration, the SEC adopted a stringent regulatory stance toward the cryptocurrency sector.
The agency initiated numerous enforcement actions against crypto companies, alleging violations such as fraud and unregistered securities offerings. While these measures were intended to protect investors and maintain market integrity, critics argued that the aggressive approach stifled innovation and created an uncertain regulatory environment.
A report by Cornerstone Research highlighted that the SEC’s crypto-related enforcement actions declined by 30% in Gensler’s final year, with 33 actions initiated compared to 47 the previous year.
Despite the decrease, monetary penalties reached a record high, underscoring the agency’s continued focus on regulating the crypto industry.
The recent policy changes, including the revocation of SAB 121 and the establishment of a crypto task force under the new administration, suggest a potential shift toward a more balanced regulatory framework that fosters innovation while ensuring investor protection.
@ Newshounds News™
Source: CoinSpeaker
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