State Crypto Rights and the Influx of Digital Money into Analog Politics, Feb. 7-14.

Several scenarios that had been long in the making dominated last week’s news cycle in the cryptocurrency policy and enforcement department. The Russian government has taken another important step on the road to creating a bespoke regulatory framework for digital assets, unveiling its consolidated view that crypto should be treated like a currency rather than swept under the rug as a currency. general prohibition. While this move towards formal crypto legitimization is a welcome development, a host of questions persist regarding both the exact shape of the new regime and its enforcement.

The biggest law enforcement story of the week, and year so far, dates back even further to the Bitfinex heist of 2016. In what demonstrates the US government’s prowess at tracking money on a distributed ledger, the Department of Justice seized the A record $3.6 billion worth of crypto was allegedly siphoned off the platform.

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It’s Crypto Audience Season Again

Both houses of the U.S. Congress continued their educational forays into various corners of the digital asset space that have become a staple of late 2021. The Senate Agriculture, Nutrition, and Forestry Committee heard from the Chief of the Commodity Futures Trading Commission, Rostin Behnam, who outlined the limits of his agency’s mandate with respect to crypto assets and suggested that senators consider expanding the CFTC’s regulatory authority.

In the U.S. House Financial Services Committee, representatives were busy reviewing the December 2021 President’s Stablecoins Task Force Report. Under Secretary of the Treasury Nellie Liang was there to respond. to questions from lawmakers on topics ranging from whether stablecoin issuers should be regulated as banks to the geopolitical implications of the spread of private dollar-pegged digital currencies.

State rights over digital assets

A bill Rep. Jason Powell introduced in the Tennessee House of Representatives proposes to add non-fungible cryptocurrencies and tokens to the list of assets in which the voluntary state and its counties can invest. A separate bill Powell introduced the same day proposes forming a study committee to examine ways in which the state legislature can create a crypto-friendly environment in Tennessee.

A similar commission, with a mandate to investigate the current state of the digital asset industry and applicable laws, will be formed in the state of New Hampshire. Notably, the initiative does not come from a member of the state legislature, but in the form of an executive order from state governor Chris Sununu. Sununu cited New Hampshire’s “commitment to attracting high-quality banking and financial firms” as driving the state’s interest in crypto.

Digital money in mainstream politics

Much has been said recently about the growing presence of the cryptocurrency industry in the halls of power in the United States. One feature of this process is the lobbying and campaign spending that digital asset companies undertake to promote their long-term policy goals and those of the industry. A study based on data from nonprofit Open Secrets documented this trend, revealing a 116% annual increase in crypto lobbying spending in 2021.

Another organizational tool to convert money into political influence is to form a political action committee (PAC) to pool funds in favor of candidates or initiatives. With digital assets shaping up to be a hot topic in the 2022 midterm elections, expressly pro-crypto candidates have been popping up across the country in recent months. In November, these politicians will be eligible for financial support from the new Coinbase Innovation PAC.