https://theblockchainassociation.org/blockchainassociation-ceo-kristin-smith-statement-on-chairman-patrick-mchenry/

The following statement is attributed to Blockchain Association CEO Kristin Smith with regards to Chairman Patrick McHenry’s announcement he will not seek reelection:

“Chairman McHenry is a stalwart champion of innovation and the digital asset industry. His bipartisan approach to commonsense rules that improve the status quo and ensure that this technology develops on American soil is a prudent model for Congress as it considers future crypto-specific legislation. While we’re sad to see such an industry champion leave the House, we’re pleased to be able to work closely with the Congressman for another 13 months.”

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https://theblockchainassociation.org/blockchainassociation-celebrates-second-annual-policy-summit/

Lawmakers, Regulators, Industry Leaders Convene and Chart Future of the Crypto Ecosystem

Washington, D.C. (Nov. 30, 2023) – Blockchain Association concluded its second annual member-only Policy Summit, convening Congressional leaders, federal and state regulators, federal law enforcement agencies, and international luminaries to discuss the current and future state of the digital asset economy. 

Over a two day conference, a distinguished group of policymakers, elected representatives, and Blockchain Association members discussed crypto policy, major Constitutional questions related to digital assets and the Fourth Amendment, geopolitics and humanitarian aid, and the misunderstandings surrounding illicit finance in the industry.

A selection of highlights from the summit:

Deputy Treasury Secretary Wally Adeyemo provided the Treasury Department’s view on the role that crypto companies must play in curtailing the facilitation of illicit finance through digital assets. While he reiterated familiar warnings that crypto companies must do more, he took pains to note that Treasury’s recommendations shouldn’t be viewed as “targeting a technology.”

Chairman Patrick McHenry (R-NC) spoke at the Summit’s gala dinner and was presented with a Blockchain Association award recognizing his longstanding commitment to the crypto industry and American innovation.

Blockchain Association CEO Kristin Smith gave a keynote address, highlighting the industry’s work in building a robust advocacy apparatus over the past five years. She highlighted that the digital asset industry now has all the constituent parts that it needs to deliver long lasting policy and regulatory success. 

NYDFS Superintendent Adrienne Harris spoke on the important role that her agency has played in better operationalizing the BitLicense, noting that while the license’s standards remain rigorous, getting approval in an important state such as New York has real benefits for regulatory approval in other jurisdictions.

Rep. Sean Casten (D-IL) provided his view on the importance of robust disclosure and compliance procedures for crypto in conversation with former acting director of FinCEN Michael Mosier.

Representatives Jim Himes (D-CT) and French Hill (R-AR) discussed the state of crypto regulatory legislation in the House of Representatives, expanding on the sources of collaboration between Democrats and Republicans, and what must be done to ensure crypto legislation can pass both houses of Congress. 

Senators Kirsten Gillibrand (D-NY) and Cynthia Lummis (R-WY) talked through their work designing comprehensive crypto legislation, their efforts to collaborate with the Treasury Department on technical details of their bills, and working with House members to find common ground to produce language that could pass both the House and Senate.

Complete roster of summit speakers:

• Wally Adeyemo, U.S. Department of the Treasury
• Stu Alderoty, Chief Legal Officer, Ripple
• Marvin Ammori, Chief Legal Officer, Uniswap Labs
• Paul Balzano, Senior Professional Staff – House Committee on Agriculture
• Allison Behuniak, Staff Director, Subcommittee on Digital Assets, Financial Technology, and Inclusion, House Committee on Financial Services
• Marta Belcher, President & Chair – Filecoin Foundation / Filecoin Foundation for the Decentralized Web
• Oleksandr “Alex” Bornyakov, Deputy Minister of Digital Transformation of Ukraine
• Rep. Sean Casten (D-IL)
• Paul D. Clement, Partner, Clement Murphy; 43rd Solicitor General of the United States (2005-2008)
• Christos Efthymiopoulos, Assistant Director, Supervision (FinTech), The Bermuda Monetary Authority
• Rep. Tom Emmer (R-MN), Majority Whip
• Adrienne A. Harris, New York Department of Financial Services
• Seth Hertlein, Global Head of Policy, Ledger; BA Board Member 
• Rep. French Hill (R-AR) Chairman, Subcommittee on Digital Assets, Financial Technology, and Inclusion, House Committee on Financial Services
• Rep. Jim Himes (D-CT) Ranking Member of the House Permanent Select Committee on Intelligence
• Bill Hughes, Senior Counsel and Director of Global Regulatory Affairs, ConsenSys
• Candace Kelly, Chief Legal Officer, Stellar Development Foundation
• Sen. Kirsten Gillibrand (D-NY)
• Rob Grant, VP, Global Policy, Ripple
• Paul Grewal, Chief Legal Officer, Coinbase
• Kristin Johnson, Commodity Futures Trading Commission
• TuongVy Le, Partner and Head of Regulatory and Policy, Bain Capital Crypto
• Sen. Cynthia Lummis (R-WY)
• Rep. Patrick McHenry (R-NC), Chairman, House Financial Services Committee
• Cleve Mesidor, Executive Director, Blockchain Foundation
• Taylor Monahan, Lead Product Manager, MetaMask
• Michael Mosier, Former Acting Director, FinCEN
• Dritan Nesho, CEO, HarrisX; Co-Director, Harvard CAPS/Harris Poll
• Michael Nydegger, Global Head of Tax, Kraken
• Kevin O’Connor, Section Chief – Virtual Assets and Emerging Technology, FinCEN, U.S. Department of the Treasury
• Jessica Peck, Attorney, Computer Crime and Intellectual Property Section (CCIPS), U.S. Department of Justice
• Hester Peirce, Securities and Exchange Commission
• Georgia Quinn, General Counsel, Anchorage Digital
• Joshua Rivera, Operating Partner & General Counsel, Blockchain Capital
• Craig Salm, Chief Legal Officer, Grayscale
• Marco Santori, Chief Legal Officer, Kraken
• Kristin Smith, CEO Blockchain Association
• Jason Somensatto, Head of North America Public Policy, Chainalysis
• Julie Stitzel, VP, Public Policy, DCG
• Rep. Ritchie Torres (D-NY)
• Amanda Tuminelli, Chief Legal Officer, DeFi Education Fund
• Vera Tzoneva, COO, CoinTracker
• Peter van Valkenburgh, Research Director, Coin Center
• Christopher Wong, Special Agent, FBI
• Lawrence Zlatkin, Vice President, Tax, Coinbase

About Blockchain Association: 

Blockchain Association is the collective voice of the cryptocurrency industry. Our members include the sector’s leading investors, companies, and projects, working together to support a future-forward, pro-innovation national policy and regulatory framework for the crypto economy. Find us at theblockchainassociation.org. Follow us @BlockchainAssn.

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https://theblockchainassociation.org/blockchainassociation-files-second-amicus-brief-in-office-of-foreign-assets-control-lawsuit-against-tornado-cash/

Washington, D.C. (Nov. 20, 2023) – Blockchain Association announced today that it has filed an amicus brief in the 5th Circuit appeal of Van Loon v. Treasury regarding OFAC’s sanctions against the privacy-protecting software known as Tornado Cash. OFAC’s sanctions mark the first time that OFAC has sanctioned computer software, rather than the individuals or entities that misuse such tools. We argue that OFAC’s actions are unlawful, exceed their statutory authority, and are arbitrary and capricious, running contrary to the Constitution. This amicus brief in the Fifth Circuit follows an earlier district court brief filed in April of this year.

The following statement is attributed to Blockchain Association Senior Counsel Marisa Coppel: 

“OFAC’s action sets a dangerous new precedent that drastically exceeds their authority and jeopardizes law-abiding Americans’ right to privacy. OFAC must see Toronado Cash for what it is: a tool that can be used by anyone. Rather than sanctioning a tool with a lawful purpose, OFAC should remain focused on the bad actors that misuse such tools. We’re encouraged the Fifth Circuit will have the chance to weigh in on this critical case.”

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https://theblockchainassociation.org/former-u-s-military-members-intelligence-officers-national-security-professionals-send-letter-to-congress-to-address-role-of-digital-assets-in-illicit-finance/

Washington, D.C. (Nov. 15, 2023) — Today, a coalition of digital asset industry companies and entrepreneurs with U.S. military and national security backgrounds sent a letter to members of the Senate Banking Committee and the House Financial Services Committee to address and clarify misperceptions about illicit finance and money laundering.

Since the outbreak of war between Israel and Hamas on Oct. 7, several major media stories have greatly exaggerated and oversimplified the role that digital assets play in global illicit finance. While the claims referenced in this reporting have been challenged, these stories continue to be used to push legislation that would be counterproductive to U.S. national security interests. 

On Tuesday, Nov. 28, a group of these signatories will visit Capitol Hill to offer their expertise to policymakers and answer questions about the true extent of illicit finance related to digital assets as well as solutions that will enhance U.S. cybersecurity without forcing the digital assets industry to jurisdictions beyond American control.

The following statement is attributed to Kristin Smith, CEO of Blockchain Association:

“It’s clear that there is a mismatch between the assumptions about the role that digital assets play in global financial transfers and the facts on the ground. The signatories state clearly that no amount of money, whether it be gold, dollars, or digital assets should be used to fund illicit activity, but we must also be able have a reasonable conversation about the latter when it comes to proposed solutions to the problem. We hope that expert voices from the digital assets industry will help balance the conversation and lead to real solutions that respect the technology and allow it to continue to grow in the United States.”

Please find the full text of the letter sent to the Senate Banking Committee and House Financial Services Committee members here.

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https://theblockchainassociation.org/blockchainassociation-submits-comment-in-response-to-irs-proposed-rulemaking-on-reporting-for-digital-asset-transactions/

Washington, D.C. (Nov. 13, 2023) – Today, pursuant to the Internal Revenue Service’s Proposed Rulemaking REG-122793-19, the Blockchain Association submitted comment in response to the proposed regulations concerning reporting requirements for digital asset transactions.

The proposed regulations reflect fundamental misunderstandings about the nature of digital assets and decentralized technology, more broadly. The proposal captures entities that do not align with the traditional understanding of who constitutes a “broker” and would improperly force centralization where it does not exist. The IRS has gone beyond their statutory authority in expanding the definition of “broker” beyond what Congress clearly intended in the 2021 Infrastructure Investment and Jobs Act. 

Given the impossible compliance obligations, developers would likely abandon the core decentralized technology that defines their project’s utility and value. If adopted, these regulations would drive all U.S.-based decentralized projects either out of existence or to non-U.S. jurisdictions.

The following statement is attributed to Kristin Smith, Blockchain Association CEO:

“The Treasury Department should take additional time to understand how damaging and impractical the expanded broker definition would be to developers of decentralized technology in the U.S. Not only that, but Treasury’s proposal constitutes an infringement on the privacy rights of individuals using decentralized technology. Needless to say, we cannot afford to push this entire, burgeoning technology to other jurisdictions. Doing so because of a misguided federal tax reporting requirement would be an unnecessary, ineffective, and self-inflicted blow.”

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https://theblockchainassociation.org/blockchainassociation-announces-agenda-and-speakers-for-second-annual-policy-summit-extends-open-invitation-to-members-of-congress/

Lawmakers, Regulators, Industry Leaders will Convene in Washington for Crypto Policy’s Can’t-Miss Event of the Year

Washington, D.C. (Nov. 8, 2023) – Blockchain Association, which represents more than 100 of America’s leading crypto companies, will hold its second annual Policy Summit in Washington, D.C. this Nov. 29-30. The event is held exclusively for BA member companies, policymakers, and members of the media.

Speakers
Policy Summit featured speakers include Sens. Kirsten Gillibrand (D-NY) and Cynthia Lummis (R-WY), Reps. Patrick McHenry (R-NC), Tom Emmer (R-MN), Ritchie Torres (D-NY), French Hill (R-AR), Jim Himes (D-CT), and Sean Casten (D-IL). The Summit will also feature Deputy Minister of Digital Transformation of Ukraine Oleksandr Bornyakov, along with CFTC Commissioner Kristin Johnson, SEC Commissioner Hester Peirce, and New York State Department of Financial Services Superintendent Adrienne A. Harris. 

Supervisory Special Agent for the FBI Christopher Wong and Attorney for the U.S. Department of Justice Jessica Peck will join the Summit for a session on illicit finance. And Staff Director of the Subcommittee on Digital Assets, Financial Technology, and Inclusion Allison Behuniak and Senior Professional Staff Member for the House Committee on Agriculture Paul Balzano will join the Summit on its members-only day. 

Agenda
This year’s Policy Summit features an impressive agenda with discussions on industry’s litigation efforts, international policy panels, and legislative deep dives. Featured sessions include “A View from the CFTC,” “Crypto Policy Abroad: Asia, Middle East, and Europe,” “Global Crypto Networks and U.S. National Security,” “The Fourth Amendment, Privacy, and Crypto,” and “Crypto Taxes and the IRS Broker Rulemaking.” 

Open Invitation to Members of Congress
This year, as crypto policy is on the forefront of lawmakers’ minds, Blockchain Association is honored to extend an open invitation to Members of Congress to attend this year’s Policy Summit. The Association welcomes an open dialogue between its more than 100 member companies and Washington. Please reach out to policysummit@theblockchainassociation.org to RSVP.

About Blockchain Association Policy Summit: Blockchain Association’s Policy Summit is an exclusive members-only event, featuring discussions with key policymakers, regulators, and industry leaders. Blockchain Association is proud to extend an exclusive invitation to its member companies. If you’re interested in applying for membership and joining this year’s Summit, please contact membership@theblockchainassociation.org to learn more.

About Blockchain Association: Blockchain Association is the collective voice of the cryptocurrency industry. Our members include the sector’s leading investors, companies, and projects, working together to support a future-forward, pro-innovation national policy and regulatory framework for the crypto economy. Find us at theblockchainassociation.org. Follow us @BlockchainAssn.

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https://theblockchainassociation.org/blockchainassociation-statement-on-gao-decision-on-sab-121/

Washington, D.C. (Oct. 31, 2023) – The following statement is attributed to Blockchain Association Senior Counsel Marisa Coppel: 

“Today, the Government Accountability Office determined that Staff Accounting Bulletin 121 is a rule under the Congressional Review Act, which largely adopts the definition of a rule under the Administrative Procedure Act. The Securities and Exchange Commission should have submitted the Bulletin to Congress prior to it going into effect. The SEC should not have deprived the public of their opportunity to be heard pursuant to the APA’s notice and comment procedures. 

“Not only did the SEC publish SAB 121 in contravention of both the CRA and APA, depriving stakeholders of their opportunity to be heard, SAB 121 is also illogical and only serves to unfairly harm market participants.

“We strongly encourage the SEC to rescind this harmful rule immediately.”

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https://theblockchainassociation.org/blockchainassociation-celebrates-five-year-anniversary-and-record-member-growth/

Washington, D.C. (Sept. 13, 2023) – This month, Blockchain Association celebrates its five-year anniversary. Over the past half decade, we’ve grown to become the leading, fastest-growing trade association dedicated to the crypto and digital asset industry. Though we have continued to grow along with the ever-changing crypto landscape, our mission remains the same – and more critical than ever: advance the future of crypto in the United States, promoting the potential of blockchain technology and shaping policy that ensures its success.

Along with our five-year anniversary, we celebrate another milestone – a record 114 member companies. This summer, we welcomed Coinbase, CoinFund, Endaoment, Hiro, Horizen Labs, Matter Labs, Multicoin Capital, North Island Ventures, Pantera Capital, RISC Zero, Room40, and Variant. Along with our membership, our staff has grown, expanding significantly in the past two years to 18 full-time employees. 

The following statement is attributed to Blockchain Association CEO Kristin Smith: 

“Blockchain Association – and our more than 110 members – sits at the intersection of crypto and policy in Washington. This nascent industry is making its presence known and advocating for the next generation of the internet. As the collective voice of the industry, we’re speaking in our nation’s capital clearly and with purpose that crypto is here for good. 

“I’m deeply proud of the work Blockchain Association’s team has done in Washington over the past five years, as well as the dedication and engagement our members have shown on the thorniest policy and regulatory questions facing our industry. We’ve made sustained progress in raising the level of awareness of and appreciation for the promise of digital assets, though many challenges remain. I look forward to cracking those challenges, with the support of BA’s members and team, over the next five years.”

Senior Director of Industry Affairs Dan Spuller added, “Our record growth not only reflects the industry’s trust in our advocacy but underscores a distinct difference between us and those that merely follow. As we look to the future, we remain dedicated to pioneering policy, championing the potential of blockchain, and ensuring that crypto’s voice in Washington, D.C., resonates louder and clearer than ever before.”

This fall, our members will convene for Blockchain Association’s second annual Policy Summit – a members-only event featuring discussions with key policymakers, regulators, and industry leaders. The Summit comes at a critical moment in Washington with multiple crypto-specific bills working their way through Congress. 

We’re honored to count the industry’s best companies among our members, and we look forward to a strong and hopeful future, together.

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https://theblockchainassociation.org/blockchainassociation-responds-to-senate-committee-on-finances-request-for-information/

Washington, D.C. (Sept. 8, 2023) – Today, Blockchain Association submitted a letter in response to the Senate Committee on Finance’s Request For Information (RFI) seeking policy input on the taxation of digital assets. The Association offered the following recommendations:

• Congress Must Create Symmetry Between the Tax Treatment of Digital and Non-Digital Assets where appropriate. While digital assets differ from traditional financial assets, and Congress should recognize their unique characteristics, digital assets should receive the same treatment under the tax code in some instances.

• Clarity is Needed Regarding the Timing and Source of Income Earned from Staking and Mining. Most digital assets rely on a consensus mechanism to validate transactions, with different digital assets running on networks that use different consensus mechanisms. Tax compliance clarity from the IRS with respect to miners and stakers is needed.

• De Minimis Gains and Losses Should be Excluded from Tax Accounting. Congress should research and propose a de minimis threshold under which gains or losses on digital asset transactions may be excluded from tax reporting. 

• Congress Must Delineate Tax Exempt Treatment for Digital Assets. Congress should clarify how digital assets are treated for purposes of tax-exempt activities.

• Congress Should Decline to Enact the Digital Asset Mining Excise Tax Proposal. The Biden Administration’s 2024 “Green Book” proposal to impose a digital asset mining energy excise tax should be opposed.

• Congress Should Pass the Keep Innovation in America Act. Congress should adopt the bipartisan Keep Innovation in America Act, which seeks to reverse certain provisions of the Infrastructure Investment and Jobs Act that creates barriers to the development of the digital asset industry.

The Association appreciates the work of Senate Finance Committee Chairman Ron Wyden and Ranking Member Mike Crapo and their commitment to learn more about ways to improve the tax treatment of digital assets. The Association remains ready as a resource for Congress on behalf of industry to ensure clarity for the United States digital asset ecosystem.

About Blockchain Association: Blockchain Association is the collective voice of the cryptocurrency industry. Our members include the sector’s leading investors, companies, and projects, working together to support a future-forward, pro-innovation national policy and regulatory framework for the crypto economy. Find us at theblockchainassociation.org. Follow us @BlockchainAssn.

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https://theblockchainassociation.org/blockchainassociation-ceo-kristin-smith-statement-on-proposed-irs-rules/

Washington, D.C. (August 25, 2023) – The following statement is attributed to Blockchain Association CEO Kristin Smith: 

“It’s critical to ensure that participants transacting with digital assets pay their taxes. If done correctly, these rules could help provide everyday crypto users with the necessary information to accurately comply with tax laws. However, it’s important to remember that the crypto ecosystem is very different from that of traditional assets, so the rules must be tailored accordingly and not capture ecosystem participants that don’t have a pathway to compliance. 

“Blockchain Association and its members are eager to provide comments and feedback on these rules to ensure that the final product is workable and encourages innovation here in the United States.”

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https://theblockchainassociation.org/blockchainassociation-files-amicus-brief-in-coinbase-v-sec/

Washington, D.C. (August 11, 2023) — Today, Blockchain Association (BA) and Crypto Council for Innovation (CCI) filed a joint amicus brief along with the Chamber of Progress and Consumer Technology Association in the Securities and Exchange Commission’s enforcement action against Coinbase. The joint brief highlights why the SEC’s interpretation of “investment contract” and regulation by enforcement strategy to asset jurisdiction over nearly all digital assets is a major question that requires Congress – instead of the SEC – to act.

The following statement is attributed to Marisa Coppel, Blockchain Association Senior Counsel:

“We are proud to support Coinbase in their dispute with the SEC, as the Commission attempts to hobble the American digital asset ecosystem through overzealous enforcement actions and vastly expand their own regulatory power without requisite approval from Congress. Deciding the limits of an agency’s authority as to decisions of great economic and political significance is a job for our elected representatives, not the SEC through its attempts to unilaterally expand its statutory powers.”

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https://theblockchainassociation.org/blockchainassociation-applauds-historic-votes-on-fit-act/

Washington, D.C. (July 27, 2023) – Today, the House Financial Services Committee and House Committee on Agriculture delivered on its promise to move forward smart, effective, bipartisan regulation for the American digital asset ecosystem. 

The following statement is attributed to Blockchain Association CEO Kristin Smith:

“Today is a landmark moment for our industry. Thank you to Chairman McHenry and Chairman Thompson for their leadership on this critical issue and willingness to work with, and accept feedback from, industry and our members. While not yet perfect, we applaud this historic bill and look forward to our continued work with both committees to ensure the United States remains the world-leader in digital asset innovation.”

Additionally, Blockchain Association encourages the House Financial Services Committee to consider the Clarity for Payment Stablecoins Act and the Keep Your Coins Act. 

The Clarity for Payment Stablecoins Act helps ensure the responsible growth of the stablecoin marketplace and protects investors and consumers. Bipartisan support is critical to pave the way for this bill to become law, and we urge members of the committee to vote in favor of this bill.

Congressman Warren Davidson’s Keep Your Coins Act, which affirms an individual’s right to privacy in their financial transactions involving digital assets, is another welcome bill. Removing intermediaries from day-to-day transactions is a hallmark of the digital asset industry – if you remove an individual’s’ ability to self custody, they’re inherently relying on an intermediary and it eliminates the reason for developing digital assets in the first place. We appreciate Congressman Davidson’s commitment to the core principles of digital assets and his long standing support of the industry.

About Blockchain Association: Blockchain Association is the collective voice of the cryptocurrency industry. Our members include the sector’s leading investors, companies, and projects, working together to support a future-forward, pro-innovation national policy and regulatory framework for the crypto economy. Find us at theblockchainassociation.org. Follow us @BlockchainAssn.

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https://theblockchainassociation.org/blockchainassociation-applauds-and-supports-the-blockchain-regulatory-clarity-act/

Washington, D.C. (July 25, 2023) – Blockchain Association is proud to support Congressman Tom Emmer’s bipartisan Blockchain Regulatory Clarity Act, cosponsored by Congressman Darren Soto, which would affirm that blockchain developers and other related service providers that do not custody customer funds are not – and should not be regulated as – money transmitters. 

The following statement is attributed to Blockchain Association CEO Kristin Smith: 

“Congressman Emmer’s bill ensures that entities such as cryptocurrency miners, validators, and wallet providers would not be subject to burdensome money transmission regulators. Without this clarification, these entities would likely seek to base their services offshore, where the regulatory regime is more clear. The Blockchain Regulatory Clarity Act ensures American digital asset innovations can continue to thrive here in the United States. We urge members of the committee to vote in favor of this bill.”

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https://theblockchainassociation.org/blockchainassociation-applauds-multi-front-congressional-effort-to-craft-a-regulatory-framework-for-digital-assets-and-supports-the-financial-innovation-and-technology-for-the-21st-century-act/

Washington, D.C. (July 25, 2023) – Blockchain Association applauds the efforts of House Financial Services Committee Chair McHenry and House Agriculture Committee Chair Thompson in working towards crafting an appropriate regulatory framework for digital assets. The Financial Innovation and Technology for the 21st Century Act being considered by the two committees this week has undergone substantial improvements since a draft was first circulated last month. 

The following statement is attributed to Blockchain Association CEO Kristin Smith: 

“A vote on the Financial Innovation and Technology for the 21st Century Act marks a significant milestone for the digital asset industry. Tomorrow’s markup demonstrates that Congress, not overzealous regulators, have the responsibility to craft U.S. policy on digital asset regulation. We’re grateful to Chairman McHenry and Chairman Thompson for putting pen to paper on these complex issues, considering industry feedback, and pushing this legislation forward in their committees. We encourage members of the committee to vote in favor of the bill so that we can continue to work on the language as it moves to the next stage of the legislative process.” 

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https://theblockchainassociation.org/blockchainassociation-ceo-kristin-smith-statement-on-crypto-asset-national-security-enhancement-act-of-2023/

Washington, D.C. (July 19, 2023) – The following statement is attributed to Blockchain Association CEO Kristin Smith:

“The Crypto-Asset National Security Enhancement Act of 2023, introduced today by Sen. Jack Reed (D-RI), is an unworkable solution and simply incompatible with digital asset technology.

“At present, illicit transactions represent a small fraction of total volume: only 0.24% of all digital asset transactions in 2022, far less than in traditional finance. Importantly, federal law enforcement agencies are already equipped with the tools and expertise to combat this relatively small but important issue, making the additional, punitive revaluations outlined in this bill redundant. 

“Blockchain Association supports efforts to keep bad actors out of the digital asset ecosystem, including an amendment to the National Defense Authorization Act that addresses anti-money laundering introduced by Sen. Cynthia Lummis (R-WY). Additionally, our members are focused on this issue and committed to stamping out all illicit activity by working with government and supporting efforts to track down bad actors. We continue to remain ready as a resource for Washington.” 

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https://theblockchainassociation.org/blockchainassociation-calls-for-investigation-into-sec-approval-of-prometheum-ember-capital-as-special-purpose-broker-dealer/

Washington, D.C. (July 12, 2023) – Today, Blockchain Association submitted a letter to the Securities and Exchange Commission’s (SEC) Office of Inspector General (OIG) requesting the OIG open an investigation into potential impropriety surrounding the approval of Prometheum Ember Capital (Prometheum) as a first-of-its-kind Special Purpose Broker-Dealer (SPBD) as well as the means by which Prometheum’s co-CEO, Aaron Kaplan, secured a seat to testify before the U.S. House Financial Services Committee in June.

Despite lacking a working product and clear plans to list digital assets, Prometheum obtained a SPBD license from the Financial Industry Regulatory Authority (FINRA) in May 2023. The license approval comes in the midst of SEC hostility toward the digital asset industry and at a time when other companies with legitimate business models have had their license applications denied or significantly delayed. Prometheum’s public position on the need for guidance from the SEC in the area of digital asset securities regulation also shifted over time. 

There are also concerns about SEC Chair Gary Gensler’s potential use of Prometheum and the SPBD licensure process to obstruct congressional efforts towards legislation. By spreading a false narrative that the law is already clear regarding digital asset securities, Chair Gensler may hinder necessary legislative developments and undermine market confidence. Since Prometheum’s licensure approval, it has been parroting a similar narrative. These facts raise questions as to whether Prometheum received favorable regulatory treatment stemming from undue influence by the SEC. 

Blockchain Association has also submitted a Freedom of Information Act request to the SEC to obtain relevant documents and communications related to this matter. 

The following statement is attributed to Kristin Smith, Blockchain Association CEO:

“While Congress is taking steps to provide guidance and answers to the American digital assets industry, Chair Gensler’s SEC continues to stand in the way by spreading a false narrative that the laws are already clear. The facts surrounding Prometheum’s SPBD licensure process raise questions as to the SEC’s involvement in offering Prometheum favorable regulatory treatment in the midst of hostility toward the digital asset industry. To better understand whether any impropriety existed during Prometheum’s licensure process, we urge the SEC OIG to initiate a thorough investigation. Blockchain Association — and the entire industry — eagerly awaits clarity and simply asks for a level playing field that ensures fair treatment for all participants.”

Please find the entire letter here.

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https://theblockchainassociation.org/blockchain-association-publishes-paper-outlining-legal-case-for-sec-chair-genslers-recusal/

Washington, D.C. (June 29, 2023) — Today, Blockchain Association published a paper explaining the legal argument for why Securities and Exchange Commission (SEC) Chair Gary Gensler must recuse himself from any decisions about the initiation or continuation of an enforcement action premised on the theory that a digital asset is a security. 

Chair Gensler has repeatedly asserted his public view that “everything other than bitcoin” is a security, a statement that creates, at minimum, the appearance that he would not approach this issue with an open mind. In repeatedly expressing this view, it is clear Chair Gensler has prejudged the central issue in digital asset-related enforcement proceedings. His vote as to whether or not to proceed with filing an action is therefore tainted with bias and violates investigation targets’ due process rights. Critical to due process, every SEC enforcement action must follow the “Wells process,” which gives the target of the enforcement action an opportunity to present evidence and arguments in their defense. If staff wish to proceed with filing an action at the end of the Wells process, they must present evidence to the Commissioners, who then vote on whether to proceed. Without an unbiased perspective, core questions that matter to the digital assets industry will not receive a fair assessment with Chair Gensler presiding.

The SEC has lately ramped up its enforcement actions against leading digital asset companies, leading many to conclude that the agency is pushing for a de facto ban on digital assets in America. While this anti-crypto campaign has intensified, the SEC has let slide one of its fundamental tasks: public rulemaking and guidance that allow investors, entrepreneurs, and the public to know whether the securities laws apply to their products or services. Rather than clarifying whether and when a digital asset should be classified as a security, Chair Gensler’s actions have further muddied the regulatory waters, forcing lawful crypto companies to reconsider the status of their American operations.

The following statement is attributed to Jake Chervinsky, Blockchain Association Chief Policy Officer:

“It’s clear that the digital assets industry cannot expect a fair assessment from Chair Gensler. His steadfast view that all digital assets except bitcoin are securities means that he cannot approach enforcement decisions with a fair and impartial mind, as required by the SEC’s Wells process and federal law. The time has come for Chair Gensler to recuse himself from all decisions related to digital asset-related enforcement matters. If he refuses, then I expect enforcement targets will begin raising the matter of his recusal in SEC proceedings and in federal district courts.”

Jake Chervinsky and BA Senior Counsel Marisa Coppel published a paper explaining the legal case for why Chair Gensler must recuse himself from digital asset-related enforcement decision making. 

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https://theblockchainassociation.org/blockchainassociation-submits-additional-comments-to-sec-in-response-to-proposed-rulemaking-to-amend-the-definition-of-exchange/

Washington, D.C. (June 13, 2023) Today, pursuant to the Securities and Exchange Commission’s April 14, 2023 reopening of the comment period, Blockchain Association submitted additional comments to the SEC’s notice of proposed rulemaking to amend the interpretation of the definition of “exchange” in Rule 3b-16 under the Securities Exchange Act of 1934 (“Exchange Act”).

The SEC has proposed altering the definition of an “exchange,” expanding the concept so broadly that, if adopted, would potentially capture entities such as DeFi protocols that do not fit the definition of an “exchange” as Congress intended in the Exchange Act. The SEC’s proposal fits with the Commission’s recent anti-crypto stance, and expands the Commission’s authority to bring as many people, protocols, and projects under its oversight as possible. If this altered definition is enacted as designed, it would effectively ban DeFi in the U.S., capturing any individual or “group of persons,” that “act in concert,” even if those actions are “informal.” Needless to say, this wide-ranging and inexact formulation of an “exchange,” is not tenable. The SEC’s expansion of the definition of “exchange” extends beyond the statutory authority granted to them by Congress and the Proposal’s impact on DeFi raises major questions of economic significance. The SEC must receive additional congressional authority prior to finalizing this Proposal.

The following statement is attributed to Kristin Smith, Blockchain Association CEO:

“Instead of crafting fit-for-purpose rules that recognize the unique nature of decentralized protocols and related entities, the SEC expands its jurisdiction beyond the limits originally set by Congress, while raising serious constitutional and APA concerns. This is the latest step in the Commission’s campaign to ban crypto in the U.S.”

Please find the entire comment letter here.

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https://theblockchainassociation.org/blockchainassociation-ceo-kristin-smith-statement-on-sec-actions/

Washington, D.C. (June 6, 2023) – The following statement is attributed to Blockchain Association CEO Kristin Smith:

“The SEC doesn’t make the law – it only makes accusations – and we’re confident the courts will prove Chair Gensler wrong in due time.

“Contrary to what Chair Gensler says, there is no regulatory clarity for digital assets as evidenced by two House committee chairs circulating a comprehensive regulatory proposal just last week. The Digital Asset Market Structure discussion draft is a step forward to not only craft effective regulation for digital assets, but also reign in Chair Gensler’s relentless crusade against American innovation.

“Blockchain Association stands ready to advocate for our members – and the entire crypto industry – and fight back in Congress and the courts.”  

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https://theblockchainassociation.org/blockchainassociation-reacts-to-draft-market-structure-bill-announcement/

Washington, D.C. (June 2, 2023) – The following statement is attributed to Kristin Smith, Blockchain Association CEO:

“Building off the bipartisan hearings held over the past few months, we appreciate today’s efforts by the House Agriculture Committee and House Financial Services Committee to propose a new functional framework for today’s digital asset market. We look forward to reviewing the bill and providing feedback as Washington’s policymakers determine the best way for the United States to embrace digital asset innovation and protect consumers.”

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https://theblockchainassociation.org/blockchainassociation-files-amicus-brief-in-coin-center-v-treasury/

Washington, D.C. (June 2, 2023) – Blockchain Association (BA) announced today that it has filed an amicus brief in Coin Center v. Treasury regarding OFAC’s sanctions against the privacy-protecting software known as Tornado Cash. Today’s announcement follows BA’s April amicus brief filing in Van Loon v. Treasury regarding the same sanctions. 

The following statement is attributed to Kristin Smith, Blockchain Association CEO: 

“It’s critical to recognize that Tornado Cash is simply a tool – punishing the tool itself simply because it can be used by anyone, including bad actors, runs contrary to the values this country was founded upon. Blockchain Association stands with Coin Center, advocating for the responsible and lawful use of blockchain technology. Regulatory actions should only be targeted at bad actors who abuse this tool for illegal purposes.”

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https://theblockchainassociation.org/blockchainassociation-responds-to-proposed-sec-custody-rule/

Washington, D.C. (May 8, 2023) – Today, Blockchain Association submitted a letter responding to the SEC’s Proposed Rule regarding Safeguarding Advisory Client Assets. The proposed rule significantly curtails an investment adviser’s ability to provide digital asset-related services to their clients, and also imposes insurmountable burdens on custodians who wish to custody digital assets. The impact of this rule would be detrimental to the digital assets industry and its participants, entrepreneurs, and developers by reducing the amount of capital available to continue innovating in the U.S. 

The following statement is attributed to Kristin Smith, Blockchain Association CEO: 

“The SEC’s proposed custody rule would severely restrict American investors from investing in digital assets through their registered investment advisers, a result that directly violates the SEC’s mission by making investors less safe and discouraging capital formation. Blockchain Association – on behalf of our more than 100 member companies – submits this response to argue why this proposed rule is bad policy and should be rewritten.” 

Blockchain Associations submits a letter, alongside several of its members.

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https://theblockchainassociation.org/blockchainassociation-celebrates-record-membership-growth/

Crypto industry’s fastest-growing trade association continues to grow, reaching record membership numbers

Washington, D.C. (April 24, 2023) – Blockchain Association is pleased to announce it has increased its membership to 107 of the American crypto economy’s foremost companies, investors, and projects. 

“We are immensely proud to have grown the Association’s membership to a new high. At a time of upheaval and increasing scrutiny from federal regulators, it is more important than ever that crypto has a strong and dedicated voice in Washington, D.C.”

The growth of the Association comes at a moment of escalating enforcement actions, reflecting a renewed desire from the crypto ecosystem to educate our policymakers and elected officials about the true nature and potential of crypto. While anti-crypto forces have coalesced in the wake of industry turmoil over the past two quarters, pro-crypto voices must continue to consistently engage on the substantial questions of crypto’s potential and who it helps most. 

The Association is proud to work with our members to forcefully and consistently answer those questions, advancing the adoption of crypto as a new standard for digital identity, commerce, and culture.

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https://theblockchainassociation.org/blockchainassociations-jake-chervinsky-to-testify-before-house-financial-services-committee-subcommittee-on-digital-assets-financial-technology-and-inclusion/

Washington, D.C. (April 18, 2023) – On Wednesday, April 19, Blockchain Association’s Chief Policy Officer Jake Chervinsky will testify before Congress during the House Financial Services Committee Subcommittee on Digital Assets, Financial Technology, and Inclusion’s hearing, “Understanding Stablecoins’ Role in Payments and the Need for Legislation.” Chervinsky will explain why tailored stablecoin legislation will unleash enormous benefits for the United States, including revolutionizing our payment system and reinforcing the primacy of the U.S. dollar worldwide. 

Blockchain Association is committed to educating policymakers and regulators in Washington to guide sensible legislation that fosters the growth of this nascent technology. By testifying before Congress and working hand in hand with legislators, the Association remains confident that crypto will strengthen the United States’ strategic position in global finance and technology. 

This hearing will be streamed live on the Committee’s website.

Read the written testimony.

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https://theblockchainassociation.org/blockchainassociation-reacts-to-illinois-assembly-bill-hb3479/

Washington, D.C. (April 17, 2023) – Today, Blockchain Association published a letter sent to Senator Laura Ellman and Representative Mark Walker of the Illinois Assembly stating industry opposition to HB 3479. 

The following statement is attributed to Kristin Smith, Blockchain Association CEO: 

“Illinois Assembly Bill HB 3479 would effectively outlaw crypto in the state, forcing crypto innovation to more welcoming jurisdictions. This bill imposes an onerous, uncertain, and likely expensive licensing regime. And intended or not, it would outright ban certain critical and exciting parts of crypto markets. We strongly urge the Illinois Assembly to reconsider this bill.”

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https://theblockchainassociation.org/blockchainassociation-submits-additional-foia-and-foil-requests-to-further-investigate-de-banking-of-crypto-firms/

Washington, D.C., April 14, 2023 – Following last month’s Freedom of Information Act (FOIA) requests to investigate the possible de-banking of crypto firms, today, Blockchain Association (BA) submitted additional FOIA and Freedom of Information Law (FOIL) requests to the Federal Housing Finance Agency (FHFA) and New York Department of Financial Services (NYDFS), respectively. 

BA’s requests for information from NYDFS seek to understand whether the closure of Signature Bank was the result of the bank’s insolvency or a decision to send an anti-crypto message despite the bank being fully solvent. Additionally, BA is investigating whether the failure of Silvergate was the result of a politically-motivated decision by the Federal Home Loan Bank of San Francisco, which is overseen by the FHFA, to take the extraordinary and unusual action of pulling a loan made to Silvergate only months earlier.

BA continues to request that all impacted crypto industry participants come forward and submit their story confidentially to debanked@theblockchainassociation.org.

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