Miller Whitehouse-Levine

The passage of the European Union’s new licensing regime for crypto companies is a major pivot point in the industry.



While the EU has taken a cautious, but open-minded, approach toward crypto, the United States has lately taken a divergent path, becoming increasingly antagonistic toward the industry in recent months.&nbsp;



The US has made similar mistakes in the past, prioritizing reactionary policies at the expense of long-term technological competitiveness.&nbsp;



Take just one example: <a href="https://www.cato.org/blog/highlighting-catos-work-foreign-dredge-act">the Foreign Dredge Act of 1906</a> prohibiting non-US ships from working to expand the nation’s ports. Even though this law was enacted over a literal century ago, and foreign-built ships today could make a huge difference in expanding US ports, efforts to repeal the law have failed — demonstrating just how hard it is to dislodge bad policy that has obviously run its course.&nbsp;



The US is setting itself up for the same policy failures in crypto.&nbsp;



Lurching about in response to the failures and frauds of 2022, the country is on the verge of shutting itself off from a technology and an industry that will change the global economy this century.&nbsp;



<h2>US regulators take a stand</h2>



Even though the EU’s Markets in Crypto-Assets (MiCA) has drawbacks and leaves important questions unanswered, it stands in depressing contrast to the approach of American regulators in recent months.



SEC Chair Gary Gensler’s actions reveal that he has unilaterally decided on behalf of the country to try to ban crypto; he’s even bragged <a href="https://twitter.com/GaryGensler/status/1648054096300056577?s=20">recently</a> about the number of enforcement actions the agency has brought (many of those against crypto companies).&nbsp;



The glee is akin to a fire department chief highlighting the number of fires his company responded to in the past year. Should we seek to prevent fires or seek to put out as many fires as possible? Why haven’t we focused on rules to make safer, less fire-prone buildings?&nbsp;



Senator <a href="https://blockworks.co/news/elizabeth-warren-crypto-web3" target="_blank" rel="noreferrer noopener">Elizabeth Warren also</a> recently noted her aim to raise an “anti-crypto army” as a central plank in her reelection campaign: Alongside the reintroduction of her <a href="https://www.warren.senate.gov/imo/media/doc/DAAML%20Act%20of%202022.pdf">anti-money laundering bill</a> that unfairly targets US crypto miners and validators, it’s clear the US is on its way to an all-out war on crypto.



The antagonistic approach of these powerful figures, contrasted with the patient and deliberate approach of the EU, is beginning to have an impact on <a href="https://fortune.com/crypto/2023/04/18/kraken-digital-asset-license-ireland-vasp-crypto-abroad-crackdown/">where</a> crypto companies are being formed, funded or relocated. In the first quarter of 2023, venture capital investment in EU crypto companies <a href="https://www.bloomberg.com/news/articles/2023-04-20/eu-s-mica-crypto-regulations-clear-final-parliament-vote?sref=stSNJKdM#xj4y7vzkg">accelerated</a>, gaining share over US allocation and overtaking American investment for the first time.&nbsp;



Coupled with recent data showing the US <a href="https://www.developerreport.com/developer-report-geography">steadily losing its lead</a> in the number of developers working on crypto in the country, we can see that the federal government’s approach to the sector is driving away investment and jobs.&nbsp;



<h2>Setting an example</h2>



There is still time to right the ship, and the EU’s approach, while imperfect, is a good-faithed yet careful embrace of crypto.&nbsp;



Importantly, the framework intentionally focuses on centralized actors, and EU policymakers have committed to taking the time to properly study DeFi and NFTs before deciding whether to push forward another comprehensive package.&nbsp;



However, MiCA also includes requirements for issuers and grants significant power to the European Securities and Markets Authority (ESMA), which could result in a centralized regulatory approach that may not be well-suited for the rapidly evolving crypto market.&nbsp;



The next year and a half is critical in the battle for which jurisdiction will win out in the race to properly embrace crypto as a durable economic and technological force.&nbsp;



While the EU has a major head start, MiCA’s regulations don’t take effect immediately, instead allowing for a 12-18 month grace period of design and implementation.&nbsp;



Congress should use this opportunity to follow suit and pass legislation to manage centralized stablecoins and exchanges with a comprehensive, national framework.&nbsp;



<hr class="wp-block-separator has-alpha-channel-opacity"/>


<div class="wp-block-post-author-biography">With oversight from the DEF’s grants committee, Miller has overall strategic and operational responsibility for the execution of the organization’s mission and goals. Prior to joining the Fund, Miller led the Blockchain Association’s policy operation and worked at Goldstein Policy Solutions on a range of public policy issues, including crypto. Miller holds a B.S. in international politics and a minor in Mandarin Chinese from Georgetown&#8217;s School of Foreign Service.</div>


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Don’t Drive Crypto Into the EU’s Open Arms

Sebastian Sinclair

As the US 2024 presidential election slowly advances, several candidates are turning to the crypto industry in a bid to pick up additional votes ahead of next year’s race.



Nine candidates have so far filed with the Federal Election Commission to run for office, with three Democrats to the Republicans’ six, according to data from <a href="https://ballotpedia.org/Presidential_candidates,_2024">Ballotpedia</a>.



<h2>Kennedy Jr.</h2>



Democratic candidate Robert Kennedy Jr. <a href="https://www.nbcnews.com/politics/2024-election/robert-kennedy-jr-make-campaign-debut-bitcoin-conference-rcna83123">announced</a> last week he would make his first appearance as a presidential hopeful at the Bitcoin Conference in Miami later this month.&nbsp;



The nephew of former President John F. Kennedy has labeled crypto, including bitcoin, a “major innovation engine,” according to a tweet <a href="https://twitter.com/RobertKennedyJr/status/1653808786577010697?s=20">thread</a> last week. The environmental activist, lawyer and author first announced his bid on April 5.



“It is a mistake for the US government to hobble the industry and drive innovation elsewhere. Biden’s <a href="https://blockworks.co/news/bitcoin-mining-tax-biden">proposed 30% tax on cryptocurrency mining</a> is a bad idea,” he tweeted.



<h2>Biden and Williamson</h2>



The two other Democratic candidates include incumbent President Joe Biden — who announced his re-election bid late last month — as well as 2020 presidential candidate Marianne Williamson.



Following his <a href="https://blockworks.co/news/biden-signs-crypto-executive-order-promoting-responsible-innovation">executive order</a> in March of last year, President Biden believes the US has a chance to “reinforce American leadership in the global financial system” while recognizing the need for regulatory guardrails to protect consumers in crypto.



On paper, Biden’s order instructs multiple government agencies, including the <a href="https://blockworks.co/tag/federal-reserve">Federal Reserve</a>, to investigate the potential dangers and benefits crypto presents.&nbsp;



In practice, the order also opens the door for the exploration of a <a href="https://blockworks.co/tag/cbdc">centralized digital dollar</a>, to which some presidential candidates are vehemently opposed, namely Kennedy Jr.&nbsp;



Read more: <a href="https://blockworks.co/news/fednow-cbdc-save-us">FedNow Will Save the US From a CBDC</a>



Williamson, a lecturer and author of more than a dozen books, has been less vocal on the emergence of digital assets.&nbsp;



Last year, she <a href="https://twitter.com/marwilliamson/status/1494531491904335874?s=20">tweeted</a> “Canada, are you okay…?” in response to a video posted by local media True North outlining a statement from Deputy Prime Minister Chrystia Freeland.&nbsp;



In the video, Freeland discusses actions taken by the Royal Canadian Mounted Police to <a href="https://blockworks.co/news/government-crypto-powers-in-spotlight-after-canadian-trucker-protest-is-disbanded">freeze accounts associated with individual entities and crypto wallets</a> suspected of illicit activities.



While Williamson’s reaction could indicate some opposition to Canada’s decision to freeze crypto wallets, her take is more likely associated with what some have called an oppressive approach to anti-vaccine activists.



Williamson’s office did not immediately respond to Blockworks’ request for comment.



<h2>Haley, Elder, Hutchinson, Ramaswamy, Stapleton</h2>



Larry Elder, a conservative talk radio host who announced his candidacy on April 20, has not made any public statements regarding digital assets to date. Candidate Nikki Haley, former United Nations ambassador and South Carolina governor, has not provided any public statement on digital assets either.



Asa Hutchinson, Arkansas’s former governor who announced his bid on April 2, and Corey Stapleton, former Montana secretary of state, have also not provided any definitive policy, or public statements on the nascent asset class.



Blockworks attempted to contact Elder, Haley, Stapleton and Hutchinson, but has so far received no response.



In February, Vivek Ramaswamy, an entrepreneur and political commentator, also announced his campaign. Ramaswamy&#8217;s platform includes advocating for free speech, minimizing the federal government&#8217;s scope, challenging China, rejecting affirmative action policies, and opposing environmental, social and corporate governance initiatives.



Ramaswamy <a href="https://twitter.com/VivekGRamaswamy/status/1635604533526052864?s=20">tweeted</a> in March “Every GOP candidate needs a clear answer to CBDCs: hell no.”



<h2>Trump</h2>



Former US President Donald Trump announced his candidacy for a second attempt at a second term as president on Nov. 15, 2022. Trump previously <a href="https://twitter.com/realDonaldTrump/status/1149472282584072192?s=20">tweeted</a> he is “not a fan” of bitcoin and crypto, going so far as to dismiss their value as highly volatile and “based on thin air.”



“Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity,” he tweeted in July 2019.



“We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable. It is by far the most dominant currency anywhere in the World, and it will always stay that way. It is called the United States Dollar!”



Trump’s campaign media department did not immediately return Blockworks’ request for comment.



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Here’s What US Presidential Hopefuls Are Saying About Crypto

Darren Kleine

When it comes to crypto and how governments are dealing with legal issues around it, two distinct approaches seem to exist: America’s and the rest of the world’s.



Europe’s recent passage of its <a href="https://blockworks.co/news/eu-parliament-passes-mica-vote">MiCA (Markets in Crypto Assets) legislation</a> was a prime example of these different regulatory approaches to the crypto industry.



The legislation, which could potentially <a href="https://blockworks.co/news/mica-could-get-crypto-banked">open up more banking services to crypto firms</a> in the EU, passed by a large margin, with European members of parliament voting overwhelmingly in its favor. In America, the legislative progress is fragmented, with different proposals to regulation popping up all over the country <a href="https://blockworks.co/news/crypto-fraud-needs-order">in a piecemeal manner</a>.



On a <a href="https://www.youtube.com/watch?v=JrNgus94mSA">recent episode of Empire</a>, chief policy officers Rebecca Rettig at Polygon Labs and Jake Chervinsky at the Blockchain Association spoke to Blockworks about the contrasting approaches to <a href="https://blockworks.co/tag/regulation">crypto regulation</a>.



In the United States, Rettig says, “it seems like all parties involved are very far apart from each other,” unlike Europe.&nbsp;



“There&#8217;s been a longstanding debate in DC about whether and how to regulate tech in terms of Big Tech generally,” Rettig says, “and it seems to be filtering over into crypto.”



“The US is very different from where the rest of the world is right now.”&nbsp;



Everywhere outside the United States, Rettig says leaders are “building out various types of regulation — both on the centralized crypto side, and then really studying the more nuanced, crypto-native, technological, innovative side of things — and thinking about whether and how to build out a regulatory scheme around that.”



<h2>Still a ways to go</h2>



<a href="https://blockworks.co/tag/mica">MiCA legislation</a> in Europe gives industry participants some regulatory certainty, Rettig observes, but not necessarily today. “Two other votes that have to happen that make it actionable,” she notes, with the framework not coming into “full force and effect” until 2024.



The details will take years to be sorted, Rettig says, but MiCA is a good jumping-off point, allowing businesses to think ahead about how to build legally in the EU.



“There are a lot of hoops to jump over and a lot of restrictions, but you know what they are.”



“The great thing about <a href="https://blockworks.co/tag/mica">MiCA</a>,” Chervinsky says, “is it is a genuine attempt to actually tell the industry what the rules are so they can figure out how to comply.”&nbsp;



The industry almost doesn&#8217;t care what the rules are, he says, as long as there is a way to comply with them. “We&#8217;re a bunch of really smart lawyers and professionals in the industry. We can figure out how to comply.”&nbsp;



“Just tell us what the rules are.”



Plenty of details have to be worked out, Chervinsky adds, with lots of open questions about how rules will be designed. He admits the process in Europe is “somewhat opaque.”&nbsp;



“It&#8217;s kind of hard to know what&#8217;s going on and how it&#8217;s going to come out.”



<h2>Achieving clarity</h2>



“But I think it&#8217;s a huge step forward and frankly, it&#8217;s a little bit sad for those of us here in the US to have to say Europe is leading the way and the US is falling behind. It&#8217;s very rare that we&#8217;re in that situation, but that&#8217;s definitely where we are.”



Rettig agrees with Chervinsky regarding the opacity of legal process in Europe, but says she observed a high level of engagement in discussions.



“There is still a lot of willingness to engage and they actually do care how the technology works because they want to get it right.”



Chervinsky says it’s all about achieving clarity. “If you have rules, then you can hire a law firm and say to them, ‘Here&#8217;s what we want to do. Here&#8217;s the business that we want to launch. Here&#8217;s the service that we want to put into the market.’”



<iframe loading="lazy" frameborder="0" height="200" scrolling="no" src="https://playlist.megaphone.fm/?e=BWG7755058582" width="100%"></iframe>







“And then they will tell you, ‘Okay, fine. Here are the things that you need to do in order to be certain that you are complying with the laws and the jurisdictions where you&#8217;re operating.’”



<h2>Zero chance of certainty</h2>



“That&#8217;s not how it works in the US,” he says.&nbsp;



In the US, Chervinsky says, <a href="https://blockworks.co/news/coinbase-sec-rulemaking-petition">current vague guidelines</a> might allow a crypto business to mitigate the risk of a regulator showing up and cracking down on a violation, “but there is zero chance that you will ever have total certainty that you are complying with the law.”



With MiCA, even if you don’t love the rules, “at least you understand what the rules are,” and you can comply with them, he says, “without worrying that you&#8217;re gonna get a <a href="https://blockworks.co/news/sec-serves-coinbase-in-latest-alleged-crypto-securities-violation">Wells notice</a> and all of a sudden need to spend a few million extra dollars <a href="https://blockworks.co/news/coinbase-sec-rulemaking-petition">fighting the SEC</a> over something that you never thought would be an issue.”



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Is the World Leaving America Behind on Crypto Regulation?

Michael Bodley

A trio of US House Republicans are on the offensive against federal cryptocurrency regulations efforts again, saying they are “demanding information related to potential coordinated efforts by the agencies to deny banking services to digital asset firms and the ecosystem as a whole.”



The broadside effort undertaken by Reps. Patrick McHenry, R-N.C.; Bill Huizenga, R-Mich.; and French Hill, R-Ark., marks one of the latest attempts at the US federal level to push for digital asset regulation this year. And it comes at a time when a growing number of prominent US-based crypto companies are <a href="https://blockworks.co/news/coinbase-abu-dhabi-bermuda-derivatives">establishing outposts overseas</a> — or going as far as saying they’ll move their headquarters outside of the US altogether.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><a href="https://twitter.com/hashtag/NEW?src=hash&amp;ref_src=twsrc%5Etfw">#NEW</a>: Chairmen <a href="https://twitter.com/PatrickMcHenry?ref_src=twsrc%5Etfw">@PatrickMcHenry</a>, <a href="https://twitter.com/RepFrenchHill?ref_src=twsrc%5Etfw">@RepFrenchHill</a>, and <a href="https://twitter.com/RepHuizenga?ref_src=twsrc%5Etfw">@RepHuizenga</a> are demanding information on prudential banking regulators&#39; efforts to de-bank the digital asset ecosystem. ⬇️ Read more on their letters 🔗 <a href="https://t.co/IjbxDEapzj">https://t.co/IjbxDEapzj</a> <a href="https://t.co/GInBcOCm90">pic.twitter.com/GInBcOCm90</a>&mdash; Financial Services GOP (@FinancialCmte) <a href="https://twitter.com/FinancialCmte/status/1651324120888377346?ref_src=twsrc%5Etfw">April 26, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



In a joint <a href="https://financialservices.house.gov/news/documentsingle.aspx?DocumentID=408737">statement</a>, the US politicians referenced recent letters they sent to the Board of Governors of the Federal Reserve, as well as Federal Reserve Chair Jerome Powell; plus FDIC Chair Martin Gruenberg. Michael Hsu, who holds the title of acting comptroller of the currency in the US, also received a letter this week.



All of the coordinated communications appear to be the latest Republican attempt to ramp up pressure against US crypto oversees to get legislation done on industry oversight this year.&nbsp;&nbsp;



“Today, we are seeing the resurgence of coordinated action by the federal prudential regulators to suppress innovation in the United States,” the joint statement said. “There is no clearer example than in the digital asset ecosystem.”



Even Coinbase CEO Brian Armstrong has entered the political and regulatory fray this year. Armstrong at one point in 2023 said he’d consider moving the domicile of his US-based and publicly traded exchange outside of the country.&nbsp;



The <a href="https://blockworks.co/news/could-coinbase-leave-us">industry consensus has been mixed on</a> whether Armstrong would seriously consider doing so. Some have referred to the move as a political gambit. Efforts driven at the state level in the US, including legislation drafted in Montana, have been<a href="https://blockworks.co/news/montana-mining-bill-passes-house"> largely met with greater progress so far this year.</a>&nbsp;



<h2>Europe crypto industry moves in the cards?</h2>



Amid all of the US federal turmoil and congressional infighting, industry participants based in the US say they’re paying close attention to ongoing crypto regulatory developments in Europe and other regions this quarter.&nbsp;



It’s unclear whether Republican efforts to advance stablecoin legislation <a href="https://blockworks.co/news/republican-stablecoin-bill-wont-survive">have a chance of succeeding</a>, for example, this year.



During an interview with Blockworks on Thursday, Ilya Volkov, CEO and co-founder of YouHodler, noted a growing trend of influential figures in the industry looking to set up shop in his home base of Switzerland.&nbsp;



Volkov has been involved in efforts to shore up the presence of crypto firms in the EU via <a href="https://blockworks.co/tag/mica">MiCA</a>, the region’s ongoing effort to establish its own regulation and jurisdiction over digital asset operators.&nbsp;



Though Volkov’s firm has no presence in the US and no customers based in the region, he said, they’re still “monitoring the developments in the US, just because they’re much connected to everything happening on the global level, and it [has always been] like that.”



He said that crypto companies, such as stablecoin issuer Circle, have been recently exploring opportunities to expand their presence in Europe. 



He also mentioned Circle&#8217;s <a href="https://www.benzinga.com/markets/cryptocurrency/23/03/31440302/france-goes-crypto-friendly-as-stablecoin-giant-circle-sets-up-shop-in-paris">plans</a> to open a new office in Paris, which started circulating about a month ago. The firm’s representatives, Volkov said, started to consider paying a visit Zurich, Switzerland, a couple of weeks ago in an effort to keep “continuing some presence here” on the continent.



Update: May 1 at 12:13pm. Clarifies the timing of Circle&#8217;s plans to open an office in Paris, as well as the intention of the firm&#8217;s executives to visit Zurich, Switzerland. 



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As US House Efforts to Push Crypto Oversight Ramp Up, EU Move in Cards?

Casey Wagner

The United Kingdom is seeing faster crypto revenue growth, but the United States is still on top, according to market data provider Statista.&nbsp;



Crypto industry revenue is expected to more than double in both the UK and the US in 2023, data providers estimate.&nbsp;



The UK is on track to grow its crypto revenue by 125%, Statista <a href="https://www.statista.com/outlook/dmo/fintech/digital-assets/cryptocurrencies/united-states">said</a>. The market research firm includes revenue from “cryptocurrency networks, cryptocurrency exchanges, neobrokers, and neobanks,” to calculate these figures.&nbsp;



The US is projected to be the region with the highest crypto-driven revenue in 2023, with an expected $17.96 billion coming in this year, per Statista. This would be a 108% increase from 2022, where revenue clocked in at $8.63 billion, a decline from 2021’s $12.93 billion.&nbsp;



Globally, Statista said the number of crypto users will hit 99.65 million by 2027. The explosive growth Statista is calling for in the next few years comes after the first-ever down year for crypto revenue expansion.&nbsp;



While Statista analysts are confident there will be continued growth, regulatory pressures in the US have many in the space questioning how the crypto industry will continue to exist in the region. 



“The first advice you give, the first piece of advice you give somebody who’s thinking about a project, is don’t launch it in the US because the rules are unclear,” Stuart Alderoty, chief legal officer at Ripple, said <a href="https://blockworks.co/news/ripple-counsel-crypto-usa">in an interview with Blockworks last month</a>. “Go to a jurisdiction where the rules are clear, not light-touch, but clear.”



Lawmakers and federal agencies are currently split on key issues impacting the sector, including how crypto tokens should be classified, <a href="https://blockworks.co/news/house-grapples-with-stablecoins">how stablecoins should be treated</a> and what know-your-customer and anti-money laundering rules exchanges should follow. 



“The ongoing turf war between the SEC and the CFTC over digital assets is also just unhelpful, but it’s also unsustainable,” Subcommittee on Digital Assets Chair Rep. French Hill said during a House <a href="https://www.youtube.com/watch?v=ti0CDUxTAWI">hearing</a> last week. 



“When we have two agencies contradicting each other about whether one of the most utilized stable coins in the market is a security or a commodity, we end up with uncertainty,” Hill added.



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Crypto Industry Revenue Expected to Double in 2023

Ben Strack

Bills in Arkansas and Montana that focus on crypto mining have passed in recent days, while legislation in other states remain in the ratification process.&nbsp;



While some of the proposed or passed pieces of legislation seek to protect the rights of crypto miners, others seek to put certain restrictions on companies operating in the sector.



<h2>Where do the bills stand and what’s in them?</h2>



Of the 7 states examined below, most have legislation that is still working its through their political systems, while one, New York, has a crypto mining bill already signed into law.



<h3>Arkansas&nbsp;</h3>



The Arkansas Data Centers Act of 2023, <a href="https://blockworks.co/news/arkansas-crypto-mining-bill">passed by the state’s House and Senate</a> last week, seeks to protect miners from discrimination.



The <a href="https://www.arkleg.state.ar.us/Bills/FTPDocument?path=%2FBills%2F2023R%2FPublic%2FHB1799.pdf" target="_blank" rel="noreferrer noopener">law</a> prohibits a local government from imposing requirements for crypto miners that differ from those applicable to data centers, such as rezoning areas to unfairly target such businesses. 



It also says the Arkansas Public Service Commission, which regulates the state’s utilities, is not allowed to establish “an unreasonably discriminatory rate” for crypto mining customers.



The act must be signed by Gov. Sarah Huckabee Sanders before it becomes law.



<h3>Montana&nbsp;</h3>



Montana’s House of Representatives <a href="https://blockworks.co/news/montana-mining-bill-passes-house">passed a similar bill</a> to Arkansas’s miner-friendly legislation on Wednesday.&nbsp;



It now heads to Gov. Greg Gianforte’s desk for final approval.&nbsp;



The bill allows industrial and at-home miners to conduct their business free from government interference, noting that crypto mining “provides positive economic value” for people and companies in the US.



Like the Arkansas law, Montana’s bill requires the government to treat crypto miners no different from data centers.&nbsp;



<h3>Missouri and Mississippi</h3>



Proposed laws in Missouri and Mississippi, like the bills in Arkansas and Montana, look to offer protection for crypto miners.&nbsp;&nbsp;



First proposed in January, the Missouri bill would similarly limit actions the state can take against such activities, such as prohibiting its Public Service Commission from setting discriminatory rates for a digital asset mining business.



It also looks to stop the state from prohibiting the running of nodes for crypto mining at private residences, according to a bill <a href="https://www.house.mo.gov/billtracking/bills231/sumpdf/HB0764I.pdf" target="_blank" rel="noreferrer noopener">summary</a>.



Mississippi&#8217;s proposed <a href="http://billstatus.ls.state.ms.us/documents/2023/pdf/SB/2600-2699/SB2603PS.pdf" target="_blank" rel="noreferrer noopener">law</a> brings up similar language to the Arkansas and Montana bills in that it would block the state from treating miners differently than data centers.



The Missouri bill was <a href="https://blockworks.co/news/missouri-protects-crypto-mining">passed by the state’s House</a> on March 7, but appears to have stalled.&nbsp;



The Mississippi bill passed the state Senate in February but <a href="http://billstatus.ls.state.ms.us/2023/pdf/votes/house/0650013.pdf" target="_blank" rel="noreferrer noopener">failed</a> to pass during a House of Representatives vote last month. 



<h3>Texas</h3>



Texas Senate Bill 1751 would prohibit tax abatements on certain bitcoin mining property and set limits on miners’ participation in demand response programs.&nbsp;



The type of demand response the Texas bill would impact is ancillary services — where bitcoin miners, in this case, sell the right to the Electric Reliability Council of Texas (ERCOT) to curtail miner load as it sees fit to balance the grid.



Riot Platforms, a miner operating in the state, <a href="https://blockworks.co/news/riot-dislikes-texas-mining-bill">called the bill “misguided”</a> and argued that it would lead to a more expensive and less reliable energy grid.&nbsp;



In a Wednesday <a href="https://mobile.twitter.com/SatoshiActFund/status/1646344816576593920" target="_blank" rel="noreferrer noopener">letter</a> to Lieutenant Governor Dan Patrick, leaders of the Chamber of Digital Commerce, the Texas Blockchain Council and the Satoshi Action Fund, wrote that the bill  would have “devastating impacts on Texas’ leadership role in the digital economy and could have unintended consequences on the state’s energy security.” 



Introduced last month, the Texas Senate voted to approve the bill on Wednesday. The bill now heads to the state’s House of Representatives.



Texas Blockchain Council President Lee Bratcher told Blockworks he believes Texas Senate Bill 1751 will “struggle to gain traction” in the House due to its “anti-competitive nature.”&nbsp;&nbsp;



Fred Thiel, CEO of crypto miner Marathon Digital, previously said he didn’t think the law would pass the House, noting he expects “sane heads will prevail.”&nbsp;



Analysts at Compass Point Research &amp; Trading wrote in an April 10 research note that even if the proposal passes the Senate and House, they believe Texas Gov. Greg Abbott would veto it.



<h3>Oregon</h3>



<a href="https://blockworks.co/news/oregon-weighing-crypto-miner-carbon-crackdown">An Oregon bill</a> introduced in January would require facilities with high energy use, including those involved in crypto mining, to reduce greenhouse gas emissions.



Amazon had lobbied against the bill from the start of discussions, the Washington Post <a href="https://www.washingtonpost.com/technology/2023/04/04/amazon-climate-energy-fuel-oregon/?email=467cb6399cb7df64551775e431052b43a775c749&amp;emaila=12a6d4d069cd56cfddaa391c24eb7042&amp;emailb=054528e7403871c79f668e49dd3c44b1ec00c7f611bf9388f76bb2324d6ca5f3&amp;utm_source=Sailthru&amp;utm_medium=email&amp;utm_campaign=04.05.23%20Energy%20%26%20Environment%20JB" target="_blank" rel="noreferrer noopener">reported</a> earlier this month, essentially killing it.



The tech giant “successfully nurtured fear that our energy requirements would drive away the development of data centers,” Oregon state Rep. Pam Marsh told the news outlet.



The bill would have set up specific emissions reduction targets in the years ahead — such as lowering emissions by 60% below their baseline current levels by 2027 — and required operators of such facilities to provide proof of compliance via annual reports to the Department of Environmental Quality.&nbsp;&nbsp;



Violations were to result in a $12,000 penalty per megawatt-hour in violation for each day not in compliance.



A public hearing related to the proposal was held on March 20. Those set to <a href="https://olis.oregonlegislature.gov/liz/2023R1/Downloads/CommitteeMeetingDocument/266037" target="_blank" rel="noreferrer noopener">testify</a> in support included leaders from Southern Oregon Climate Action Now and the NW Energy Coalition, while people from the Economic Development for Central Oregon and the Data Center Coalition were slated to speak in opposition of the measure.



<h3>New York</h3>



A <a href="https://blockworks.co/news/new-york-passes-bill-restricting-carbon-fueled-crypto-mining-operations">crypto mining-related bill in New York</a> is unique in that it is no longer pending.&nbsp;



The <a href="https://www.nysenate.gov/legislation/bills/2021/A7389" target="_blank" rel="noreferrer noopener">law</a>, which paused crypto mining operations that use proof-of-work methods to validate blockchain transactions, was signed by Gov. Kathy Hochul last November. 



The bill prevents the state from approving such operations that depend on carbon-based power for two years, noting that such crypto miners “impact compliance” with New York’s Climate Leadership and Community Protection Act.



Kristin Smith, executive director of Blockchain Association, had said before it was signed that the bill would have “a significant chilling effect on crypto mining in the state,” adding that it could send hundreds of jobs to other states.



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In US Crypto Mining Regulation, Where do the States Stand?

Bittrex is shutting down its US operations, the crypto exchange’s co-founder said Friday, citing “regulatory uncertainty” and an unwillingness by lawmakers to embrace innovation.&nbsp;



While Bittrex Global will continue to operate, Bittrex US is set to close on April 30. Customer funds are safe and can be withdrawn until then, Bittrex CEO Richie Lai said in a <a href="https://www.businesswire.com/news/home/20230331005339/en/Bittrex-Statement-on-U.S.-Operations">statement</a>.&nbsp;&nbsp;&nbsp;&nbsp;



“The sad reality is that while policymakers and regulators in jurisdictions around the world work with digital asset exchanges on shaping the future of the global economy, their US counterparts are seemingly committed to extinguishing the industry and sending it overseas,” Lai added.



Bittrex Global remains regulated in Bermuda and Liechtenstein, the CEO said, noting that it would look to continue growing that business.&nbsp;&nbsp;



The company’s decision to wind down its US arm comes as regulators in the country have initiated a string of enforcement actions against crypto firms in recent weeks and months.&nbsp;



Bittrex itself had faced regulatory hurdles before, <a href="https://blockworks.co/news/bittrex-crypto-exchange-fined-30m-for-us-sanctions-violation">agreeing to pay $24.3 million</a> to the US Treasury last October for allegedly violating US sanctions.



A company spokesperson said at the time the company was “pleased to have fully resolved this matter with OFAC and FinCEN on mutually agreeable terms.”&nbsp;



More recently, the SEC <a href="https://blockworks.co/news/sec-serves-coinbase-in-latest-alleged-crypto-securities-violation">issued Coinbase a Wells Notice from the SEC</a> last week. The same day, the commission <a href="https://blockworks.co/news/sec-sues-justin-sun">launched a suit</a> against Tron network founder Justin Sun for allegedly selling unregistered securities. Coinbase said it doesn’t list securities, while Sun tweeted the complaint regarding Tron “lacks merit.”



A Coinbase <a href="https://www.coinbase.com/blog/new-report-shows-1m-tech-jobs-at-stake-in-us-crypto-policy">blog</a> published Wednesday argued a lack of crypto regulatory clarity in the US could cause its loss of developer share in the coming years “as web3 development moves overseas” — citing a<a href="https://blockworks.co/news/blockchain-developer-market-share-study"> report by Electric Capital</a>.



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Bittrex to Shut Down US Business Amid ‘Regulatory Uncertainty’

Jon Rice

Nexo, a digital assets platform which offers lending services and an exchange, said it will gradually phase out US operations as a direct result of a “dead end” in its attempts to gain clarity from US regulators.



In a statement, Nexo claimed it had engaged in “more than 18 months of good-faith dialogue with US state and federal regulators” — but, despite “rhetoric to the contrary,” it could not reassure customers that “regulators are focused on their best interests.”



Starting Tuesday, the company added, its flagship interest-bearing investment products will no longer be available to existing clients in eight more states: Indiana, Kentucky, Maryland, Oklahoma, South Carolina, Wisconsin, California and Washington. The yield-bearing offering had already ceased operations in New York and Vermont.



Lending platforms in the US have been under scrutiny by state regulators, especially following the collapse of <a href="https://blockworks.co/news/7-critical-events-in-the-celsius-bankruptcy-case" target="_blank" rel="noreferrer noopener">Celsius</a> and <a href="https://blockworks.co/news/qa-restructuring-expert-talks-voyager-bankruptcy" target="_blank" rel="noreferrer noopener">Voyager</a>. When Coinbase attempted to launch a lending program in 2021, the SEC issued a Wells notice — which informs the recipient that it intends to sue in court. Coinbase subsequently abandoned the Lend effort, with a terse note explaining the SEC decision: &#8220;We don’t know why.&#8221;



Nexo noted in its update that it took a variety of actions over the last couple of years to attempt to stay in compliance with US regulations, including registering its token sale with the SEC, exiting New York markets, and refusing new funds from US customers into its Earn Interest product when BlockFi — another crypto lender that recently <a href="https://blockworks.co/news/blockfi-bankruptcy-highlights" target="_blank" rel="noreferrer noopener">sought bankruptcy protection</a> — was ordered to undertake similar action, in February 2022.



Multiple crypto companies and mainstream finance stalwarts have expressed their frustration that US regulations remain unclear. At Money20/20 in October 2022 , May Zabaneh — the VP of PayPal&#8217;s blockchain and cryptocurrency division — said that &#8220;There has to be some clarity that comes out, some standards, some ideas of the dos and the don&#8217;ts and some structure around it&#8230; otherwise that mainstream adoption will really be inhibited.&#8221; 



Brad Garlinghouse of Ripple <a href="https://www.cnbc.com/2021/04/30/ripple-ceo-says-the-us-lacks-regulatory-clarity-on-cryptocurrency.html" target="_blank" rel="noreferrer noopener">told</a> CNBC last year that although in &#8220;markets like Singapore and even parts of Korea where there really has been a thoughtful government-led effort to define and have clear regulatory frameworks around cryptocurrencies&#8230; Ironically, here in the United States they have not provided that same clarity.&#8221;



Paul Grewal, the Chief Legal Officer at Coinbase, explained in a <a href="https://www.coinbase.com/blog/the-sec-has-told-us-it-wants-to-sue-us-over-lend-we-have-no-idea-why" target="_blank" rel="noreferrer noopener">blog</a> post referencing their doomed Lend product that &#8220;After our initial meeting, we answered all of the SEC’s questions in writing and then again in person. But we didn’t get much of a response. The SEC told us they consider Lend to involve a security, but wouldn’t say why or how they’d reached that conclusion.&#8221;



Blockworks has reached out to Nexo for comment.



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Nexo Crypto Lending Platform To Cease US Operations

<div id="highlights-block_62902d2faa1fe" class="highlights">
 <ul>
 <li>Three Republican senators have introduced a bill seeking to prohibit app stores from hosting apps that enable transactions in China&#8217;s digital yuan</li>
 <li>Senators Tom Cotton, Mike Braun, and Marco Rubio claim the issue is a matter of national and economic security</li>
 </ul>
 
</div>



Three Republican senators are attempting to prohibit platforms from hosting apps that enable transactions in China&#8217;s digital yuan over fears it could be used to spy on US citizens.



Senators Tom Cotton, Mike Braun, and Marco Rubio introduced the &#8220;Defending Americans from Authoritarian Digital Currencies Act&#8221; on Thursday with the aim of curbing China&#8217;s influence on US soil.



The <a href="https://www.cotton.senate.gov/imo/media/doc/ecny_bill.pdf" target="_blank" rel="noreferrer noopener">bill</a> seeks to prohibit US-based companies like Google and Apple from hosting apps on their app stores that would otherwise support or enable China&#8217;s digital yuan, also known as the e-CNY.



Blockworks attempted to contact both Google and Apple on the matter but did not receive a response by press time.



“The Chinese Communist Party will use its digital currency to control and spy on anyone who uses it,&#8221; said Cotton in a statement. &#8220;We can’t give China that chance—the United States should reject China’s attempt to undermine our economy at its most basic level.&#8221;



The e-CNY, which is designed to replace physical coins and notes, is unlike cryptos such as bitcoin or ether in that it is state-controlled and issued by a central bank.



China has been pushing for wider domestic use of its digital currency. In early January, China’s largest messaging app – Tencent-owned <a href="https://www.cnbc.com/2022/01/06/chinas-digital-currency-comes-to-tencents-wechat-in-expansion-push.html" target="_blank" rel="noreferrer noopener">WeChat</a> – began supporting the digital yuan as political pressure over its use ratcheted up.



The digital yuan also made an appearance at the Beijing Olympic Winter Games earlier this year where it featured in an international trial among foreigners and athletes.



At the time, crypto proponent Senator <a href="https://cms.blockworks.co/china-debuts-digital-yuan-at-winter-olympics-amid-warnings-from-us-senator/" target="_blank" rel="noreferrer noopener">Pat Toomey</a> cautioned US policymakers to keep a watchful eye over the digital yuan&#8217;s potential to circumvent US sanctions and facilitate illicit money flows.



&#8220;The Chinese Communist Party’s digital yuan allows direct control and access to the financial lives of individuals,&#8221; Braun said in a statement. &#8220;We cannot allow this authoritarian regime to use their state-controlled digital currency as an instrument to infiltrate our economy and the private information of American citizens.&#8221;



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Senators Draft Bill to Ban Use of Digital Yuan in US-Based Mobile Apps

Sam Reynolds

<div id="highlights-block_6192e466f8324" class="highlights">
 <ul>
 <li>The relatively decentralized federalist system in the USA, which grants significant autonomy to the states, provides an inherently competitive system for market development, which in turn accelerates the adoption of crypto</li>
 <li>Compared to the US, inflation is much more tame in the UK, a macro factor which also inhibits the adoption of crypto</li>
 </ul>
 
</div>



Digital Asset Summit 2021, London — The UK is in the education phase of crypto adoption, where people are beginning to think of it as a legitimate asset class, but the structure of the nation’s government is holding back ambitious crypto entrepreneurs, panelists said during an event at Blockworks’ Digital Asset Summit in London. 



During a fireside chat between Peter McCormack, <a href="https://cms.blockworks.co/podcasts/what-bitcoin-did/" target="_blank" rel="noreferrer noopener">host of What Bitcoin Did</a>, and Oliver von Landsberg-Sadie, CEO of BCB Group, the two discussed how the US’ style of federalism and differences in macroeconomic factors is creating a gulf in crypto adoption between the two countries. 



“With the US federal system, states such as Wyoming, Florida and Texas have seen this as an opportunity to bring business into their states,” McCormack said, pointing out that many firms have migrated to these states. But, in the UK, the Bank of England’s position, according to McCormack, is that bitcoin is a “potential systemic risk.”



<div class="wp-block-image"><figure class="aligncenter size-full"><img decoding="async" loading="lazy" width="600" height="400" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/11/IW5_2640.jpg" alt="" class="wp-image-11215" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/11/IW5_2640.jpg?w=600 600w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/IW5_2640.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/IW5_2640.jpg?w=386 386w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/IW5_2640.jpg?w=392 392w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/IW5_2640.jpg?w=329 329w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/IW5_2640.jpg?w=80 80w" sizes="(max-width: 600px) 100vw, 600px" /><figcaption>Peter McCormack; Source: Ian Walton for Blockworks</figcaption></figure></div>



Brexit is also a weight on the industry in the UK, as banks need to focus on becoming re-licensed and compliant with EU rules and regulations. That’s a burden and inefficient, said the panelists, and also a missed opportunity argued McCormack, who would prefer to see the UK adopt crypto-friendly rules, to be a “leading beacon” for the world.



<blockquote class="wp-block-quote">“We are really behind the US here in ambition, investment, and education,” he said. “On every single measure we are behind, and it’s really depressing to see it,&#8221; said McCormack.</blockquote>



<h3>Macro differences driving adoption</h3>



BCB Group’s von Landsberg-Sadie pointed out that the differences in monetary policies between the US and UK, where money had been printed “far more freely”, is also accelerating crypto adoption on the western side of the Atlantic that doesn’t exist in the same way within the UK.&nbsp;



“The UK has been a little more steady handed in that space, as has the EU,” he said, arguing that if inflation jumps from 3.2% to 6.2% there will be significantly more capital accumulation in bitcoin.



<blockquote class="wp-block-quote">“The retail adoption of crypto in the US is an appropriate response to inflationary concerns.”</blockquote>



But that’s not to say there’s not a “massive appetite for non-US dollar crypto products,” von Landsberg-Sadie said.&nbsp;



As Bloomberg analyst <a href="https://cms.blockworks.co/bloomberg-analyst-bitcoin-is-a-dollar-complement/" target="_blank" rel="noreferrer noopener">Mike McGlone wrote in an April note</a>, crypto enhances the dollar’s dominance in the world because the vast majority of stablecoins are dollar-denominated.



However, to get to that point in the UK and Europe, there still needs to be a “massive catch-up”, von Landsberg-Sadie said.



There’s no lack of factors to drive change, however, as von Landsberg-Sadie explained that the next major capital event will be when there’s a UK-approved treasury management system that allows for the “super juicy returns from DeFi” to be brought into the TradFi world on corporate treasury balance sheets. 



But perhaps that is only possible if the UK can catch up in crypto adoption first.



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