Sheehan Band

Senior Counsel, Litigation @MoonPay 🚀 | Not Your Lawyer | Posts, RTs not Legal Advice | Previous: @KattenLaw + @SkaddenArps

[Kristin Smith @KristinSmith]

1/ Here’s my recap on the last few weeks of crypto and policy in DC (and around the country) 🧵

[James Seyffart @JSeyff]

Okay everyone. Here are the details for the #Ethereum ETFs that we expect to launch next week. We are only missing details for Proshares's ETF. 7 of the 10 funds have fee waivers.

[BitMEX Research @BitMEX_Jon]

CSW will be required to publish on his website, on Twitter and on Slack, for 6 months, a notice with the main ruling (That CSW is not Satoshi)

However, CSW will not be required to take out a notice in The Times, Mellor judges that this is would be "somewhat vindictive"

[MoonPay 🟣 @moonpay]

Breaking news: MoonPay's Bitcoin on-ramp is now live on @bitkey, the new self-custody BTC wallet by the Proto Team at @blocks!

Together, we'll get Bitcoin into everyone's hands: https://t.co/jQeNUD9R82

[Paul Grewal @iampaulgrewal]

A busy, busy day ahead. First up: @Coinbase filed an Amicus Brief in support of @LEJILEX and the Crypto Freedom Alliance of Texas suit against @SECgov’s overreach and regulation by enforcement campaign towards the digital asset industry. 1/5

[Katherine Minarik @MinarikLaw]

Today @Uniswap Labs urged the SEC not to proceed with its proposed rulemaking that would dramatically and improperly expand the definition of an ‘exchange’ to include DeFi and more. 1/x

[Marisa Tashman Coppel @MTCoppel]

1/ Today @BlockchainAssn filed an amicus brief in the 10th Circuit in support of @custodiabank's case against the Fed. Our brief tells the story of “debanking” crypto and why it is crucial for industry participants to have safe banking options.

https://t.co/GVyoOSfGWb

[CryptoTaxGuy @CryptoTaxGuyETH]

CRYPTO BROKER REPORTING REGS FINALIZED

On Friday, June 28, Treasury and the IRS issued final regs under tax code section 6045 requiring custodial brokers to report dispositions of digital assets to the seller and the IRS on Form 1099-DA.

A summary 🧵 of key points (1/27) ...

[Justin Slaughter @JBSDC]

There’s been lots of news in the last 24 hours, but it’s possible that the most consequential event amidst all this will be the Supreme Court’s decision in a case known as Loper Bright.

Basically, it will trigger a sea change in all regulations.

Thread.

[MetaLawMan @MetaLawMan]

Just another day in "Regulation by Enforcement" Land

1. Judges Torres & Jackson disagree with Judges Rakoff & Failla on whether sales of tokens on secondary markets may be securities offerings.

2. Judge Jackson disagrees with Judge Rakoff on whether stablecoins are securities.

3. Judge Jackson rules that the Binance "Simple Earn" crypto lending program is NOT a security; while Judge Ramos ruled that the "Gemini Earn" program IS a security.

And on and on.

It is foundational to the whole notion of a society governed by the Rule of Law, that citizens are entitled to know what the law is before they are charged with violating the law.

But even experienced securities lawyers do not know from one day to the next what a given judge might rule in a crypto case.

How is the average citizen/entrepreneur supposed to know what is and what is not permitted in the USA?

It is a sad state of affairs.

Meanwhile, our friends in the EU see a huge influx of capital investment and intellectual capital as their MiCA regulations go into effect.

[Scott Johnsson @SGJohnsson]

Wow, big loss for the SEC in Binance re: secondary sales. I was expecting this type of analysis from Failla, but Berman seems to have given it instead.

[Bill Hughes @BillHughesDC]

A DEPARTURE FROM THE HOWEY FRAMEWORK

       “Insisting that an asset that was the subject of an alleged investment contract is itself a ‘security’ as it moves forward in commerce and is bought and sold by private individuals on any number of exchanges, and is used in any number of ways over an indefinite period of time, marks a departure from the Howey framework that leaves the Court, the industry, and future buyers and sellers with no clear differentiating principle between tokens in the marketplace that are securities and tokens that aren’t. It is not a principle the Court feels comfortable endorsing or applying based on the allegations in the complaint, particularly since the only term among the approximately twenty options included in the statutory definition of “security” that is being relied upon in this case is ‘investment contract.’”

- Judge Jackson re secondary sales claim in the strongest complaint the SEC will ever bring against a major crypto firm.

[Bill Hughes @BillHughesDC]

When it rains it pours.

IRS just dropped a final broker reporting rule on us - nice that they took it out with the Friday evening trash.

It does NOT finalize rules pertaining to unhosted wallets and related non-custodial software offerings. They say those offerings are still under review as possibly being brokers, and they will finalize their status later.

Hold fast, frens.

[Consensys.eth @Consensys]

ETHEREUM SURVIVES THE SEC.

Today we’re happy to announce a major win for Ethereum developers, technology providers, and industry participants: the Enforcement Division of the SEC has notified us that it is closing its investigation into Ethereum 2.0.

This means that the SEC will not bring charges alleging that sales of ETH are securities transactions.

[Ron Hammond @RonwHammond]

1) This week in Congress and crypto: If you're asking "what happened to the crypto bills?" you're not alone. After several policy wins, much of the work has been happening behind the scenes. With the election dominating everything, there are a few directions DC could go next:

[Amanda Tuminelli @amandatums]

That must be the page where the original 34 Act gives the SEC authority over “smart contract protocols.”

📸 from @CapitolAccount

[Eleanor Terrett @EleanorTerrett]

🚨NEW: @SECGov Commissioner Mark Uyeda told me he believes SAB 121 should be withdrawn when I asked his thoughts on @POTUS's veto of H.J. Res. 109:

"Issuing SAB 121 by regulatory edict rather than rulemaking under the Administrative Procedure Act effectively avoids judicial review, which undercuts our system of checks and balances against an over-reaching administrative state. The veto of H.J Res. 109 was unfortunate. SAB 121 ought to be withdrawn.”

[Ron Hammond @RonwHammond]

1) This week in Congress and crypto: Congress is back and in full election mode. The only thing worse than the flights out of Austin are the political takes on crypto. Biden's veto of SAB 121 was met with a lot of backlash, and where Congress goes next is pivotal. Let's dive in:

[Keith A. Grossman @KeithGrossman]

This is essentially Part 2 of my post from below as these past two weeks have been SURREAL within the larger Crypto Ecosystem.

Once again, it is important that my biases are clear: I love crypto. I am 100% biased!

So what happened over these past two weeks?

On the heels of SAB 121 passing the US Senate, @FortuneMagazine published an excellent piece titled, The Clock Is Ticking for Democrats on Crypto.

https://t.co/WvEB5ryMur

@politico also published a fascinating piece capturing the shift we have seen, titled, 'I wanted to send a message': Democrats break with Warren, Biden on crypto.

https://t.co/58UbghxvHE

“I wanted to send a message,” @CoryBooker, who was one of 11 Senate Democrats who supported the SEC rollback [of SAB 121], said in an interview. “I’m frustrated because we haven’t had a chance to debate any of the real [crypto] bills.”

"The rift may grow further next week when the House takes up sweeping, industry-backed legislation to incorporate crypto trading into federal financial regulations."

So what happened "next week when the House takes up sweeping industry-backed legislation?"

Well, the US House of Representatives PASSED the Financial Innovation and Technology for the 21st Century Act (FIT 21); and, by no small margin: 208 Reps and 71 Dems, including @SpeakerPelosi, voted to support this Bill as it now advances to the Senate.

This is not an easy bill to understand and, to be honest, if you are a parent, it is probably good bedtime reading for your children! However, FIT 21 does establish a comprehensive regulatory framework for digital assets, along with important consumer protections w/I the US, and the law firm @DavisPolkReg provides an excellent explainer should you be interested in diving deeper into it.

https://t.co/pAieZmYanD

Here was @GOPMajorityWhip (R-MN) statement prior to the vote:

"Today we have an opportunity to determine whether the next iteration of the internet will be designed by Americans, or if it will instead reflect the values of some other nation."

https://t.co/u1kJcTVZSR

And, here was Rep @RepAdamSchiff (D-CA) statement following the passing of the vote.

“This bill is a good first step towards creating a framework that will help safeguard consumers and their investments, provide the tools needed to go after bad actors, and ensure that the United States not only beats its competitors but continues to lead the way in fostering the entrepreneurial and digital economies."

https://t.co/rueFaO62Z2

Had only SAB 121 & FIT 21 passed that would have been a transformative shift in US Policy toward the Crypto industry, HOWEVER ... 

The SEC suddenly shifted its position on ETH ETFs and, by the end of the week, these too were approved! 

If anyone tells you they knew this would happen, they are lying! I am sorry to say that. It is true! Even the folks at @business were caught by surprise ...

From @EricBalchunas, Sr. ETF Analyst, Bloomberg:

https://t.co/YPNDvr9rkm

By Thurs evening, ETH ETFs were approved!

@business: US Paves Way for Ether ETFs in Test of Crypto Demand Beyond Bitcoin.

https://t.co/hsEvOtkGTu

@Blockworks published an excellent rundown as well, titled, With ether ETF decision imminent, a timeline of how we got here.

https://t.co/AtOPu3k5vE

@Politico then published another piece, titled, Crypto's 'huge moment' scrambling US politics.

https://t.co/vF6zntDrnj

And, I am omitting the fact that the House also PASSED the CBDC Anti-Surveillance Act from this rundown!

https://t.co/WYQ8nHfPKZ

On a personal note - and I have stressed this throughout all of my comms: 

Crypto should NOT be a partisan issue. It should NOT even be a political issue.

There are REAL issues facing the United States this election cycle.

The industry has shown, however, that it is no longer going to be bullied by a few extremists. That is why @moonpay donated to support the non-partisan, non-profit, @standwithcrypto, alongside our colleagues at @coinbase & others. 

https://t.co/vmZQcuX8Ja

[Paul Grewal @iampaulgrewal]

We just filed our reply in our request to file an interlocutory appeal with the 2nd Circuit. Unlike @SECGov, @coinbase’s position remains the same: To push for clarity for our industry and the 52 million Americans who own crypto, and against the SEC’s overreach beyond the authority it’s been given from Congress. 1/5