Launchy Regulatory Roundup #2 - Kamala Crypto Stance

Trump Points Lutnick | Binance Re-enters India

Marco Manoppo & Muhammad Reynaldi Ariananda Arkiang
August 18, 2024

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Good Morning.

Welcome to our second edition of the regulatory roundup. If you know anybody who would benefit from this content, please help us spread the word!

US presidential candidates keep swaying and love-bombing the crypto community. Let’s not get baited by their sweet talk and wait for a crypto-specific economic policy agenda. Once we get clarity on this, Polymarket will see another surge in bets.

So, choose your pills 🔵 🔴

In Today's Edition:

Headline: Kamala Harris's crypto stance 🧍‍♀️
Global Legal Roundup: IMF, FTC, Tether, and more
Case Study: Should Oracle-like tech be patented? 🤔

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HEADLINE

Will Kamala Harris Continue Crypto Crackdown or Lead a Surge?

Bloomberg - Alex Thorn

State of play: Kamala Harris is reportedly working with Brian Deese and Bharat Ramamurti, key anti-crypto officials from the Biden administration who opposed the Clarity for Payment Stablecoins Act of 2023.

Harris’ choice of economic advisers may indicate her plan to continue the Biden administration’s tough crypto regulatory stance.
Alex Thorn identifies Deese and Ramamurti as key architects of the Biden administration's anti-crypto agenda, including Chokepoint 2.0.
Fortune has called Ramamurti the “White House’s top crypto critic,” who served as National Economic Council Deputy Director until October 2023.

Meanwhile, Crypto4Harris, a group of Democrat-leaning crypto advocates, held an online town hall on Thursday to discuss the path forward, inviting industry leaders and enthusiasts to support the Harris for President campaign.

The confirmed speaker list includes figures such as Senate Majority Leader Chuck Schumer, Mark Cuban, Anthony Scaramucci, and crypto lobbyists like Sheila Warren and Justin Slaughter from Paradigm.
Chuck Schumer expressed optimism at the event, stating that passing crypto legislation this year could actually happen.
Crypto4Harris announced "grassroots" fundraisers starting in mid-September to raise money from the crypto community.

What’s Next: Harris will unveil her economic policy agenda, devised with Deese, Ramamurti, and others, in mid-August, potentially revealing her approach to crypto regulation.

Why it Matters: Both Harris's and Trump's campaigns are vying for crypto voters, but clarity on who will benefit crypto more will come with their economic policy announcements.

Our Take: While Trump is 'love-bombing' the crypto community, Harris is more composed. People start to realize that what matters is not sweet words but a real plan (economic policy agenda)—something that can be accounted for.

Trump once had a 70% odds (now 45%) of winning the presidential election on Polymarket, but now Harris is leading with 52%.

GLOBAL LEGAL ROUNDUP

🌐 IMF execs propose an 85% hike in electricity prices for crypto mining.

IMF execs suggest an 85% global tax on crypto mining electricity costs to significantly reduce carbon emissions. An IMF paper predicts crypto mining could contribute 0.7% of global carbon emissions by 2027.

A $0.047/kWh tax could align crypto mining emissions with global targets, according to IMF officials Shafik Hebous and Nate Vernon-Lin.
If considering miners' local health impact, the tax would increase to $0.089/kWh, the IMF officials stated.
Hebous and Vernon-Lin stated that an 85% electricity price hike for crypto miners would generate $5.2B in annual revenue and cut emissions by 100M tons yearly.

🇺🇲 FTC New Rules: Fake Followers, Views and Likes Could Face Fines

Crypto influencers using fake followers, views, and likes may face fines from the US Consumer Protection Agency under new FTC rules against fake reviews.

The new regulations were passed unanimously and will take effect 60 days after being posted to the Federal Register.
The rules prohibit “selling or buying fake social media indicators,” including bot-generated followers or views.
The ban targets those who knowingly buy fake social media indicators to misrepresent influence for commercial gain.
It also prohibits AI-generated reviews from those without real experience, restricts insider reviews, and enforces new rules for review websites.

🇺🇲 Tether vs Celsius in $3.3B Litigation

Tether is set to fight a $3.3B lawsuit filed by bankrupt Celsius, which alleges that Tether fraudulently secured itself in a loan agreement and made "preferential and fraudulent transfers" of Bitcoin during the 2022 market crash.

Celsius is seeking the return of 57,428.64 BTC or its present value, along with $100M in damages for breach of contract.
Celsius claims that in June 2022, Tether sold its Bitcoin at an average price of $20,656.88, below the June 13th market closing price of $22,487.39.
Tether, calling the lawsuit a "baseless shakedown," claims that Celsius consented to the Bitcoin liquidation and that Tether token holders will not be affected, even in the worst-case scenario.

🇺🇲 Coinbase Re-Enters Hawaii as State Eases Regulations

Coinbase is re-entering the Hawaii market after the state lifted longstanding restrictions on cryptocurrency exchanges.

The state had required exchanges to hold one-to-one fiat reserves for all crypto, leading Coinbase to exit in 2017.
Recent regulatory changes have removed the need for a state-issued money transmitter license, allowing Coinbase and other exchanges to operate without separate state regulations.
Coinbase praised Hawaii's new approach as innovative and responsible.

🇮🇳 Binance Resumes India Operations After 7-Month Ban

Binance has returned to India's Google Play Store and Apple App Store after a seven-month ban for noncompliance with local regulations.

On August 15, Binance made its website and apps available again, having registered as a reporting entity with India’s Financial Intelligence Unit (FIU-IND).
The ban was initially imposed in January when Binance and eight other exchanges failed to register with the FIU-IND.
Binance's reentry marks its 19th global regulatory milestone, with the exchange now implementing anti-money laundering and counter-terrorism financing policies in India.

🇨🇦 Canada Tightens Stablecoin Rules for Investor Protection

Canadian regulators are tightening stablecoin rules to prioritize investor protection, according to Suzanne Lasrado, VP at the Canadian Investment Regulatory Organization (CIRO).

Speaking at the Blockchain Futurist Conference, Lasrado emphasized that the Canadian Securities Administrators (CSA) introduced these regulations to ensure fair disclosure and protect investors.
The 2023 CSA rules require crypto platforms to obtain written consent before allowing stablecoin transactions, which has led some firms to exit the Canadian market.
Crypto trading platforms in Canada are currently operating under interim measures and are moving toward full registration as investment dealers.

🇦🇺 ASIC Sues ASX Over Misleading Blockchain Project Statements

ASIC (Securities and Investment Commission) has sued ASX Limited for allegedly making misleading statements about the progress of its blockchain project to replace the Clearing House Electronic Subregister System (CHESS).

ASX had claimed the project was on track but later cancelled it in November 2022 after significant design challenges were identified.
ASIC alleges these statements were deceptive, leading to a potential penalty of over A$500M.
ASX is reviewing the allegations, with criticism directed at the ASX Board and senior executives for their role in the project’s failure.

🇦🇪 Dubai Court Approves Crypto as Valid Salary Payment

The Dubai Court of First Instance has recognized cryptocurrency as a valid form of salary payment under employment contracts, marking a significant shift in the UAE's legal approach to crypto.

This ruling contrasts with the court's 2023 stance, where a similar claim was denied due to a lack of clear valuation of the crypto.
The case involved an employee suing for unpaid wages, including payment in EcoWatt tokens.
The court's 2024 decision to enforce the crypto payment without converting it to fiat reflects a broader acceptance of digital currencies in the UAE's legal and economic framework.
This ruling is seen as a positive precedent for further integrating crypto into everyday financial transactions in the UAE.

More Regulatory Updates:

ezBtc guilty of gambling away $9.5M in user funds.
3AC liquidators file $1.3B claim against Terraform Labs.
Texas Blockchain Council endorses Ted Cruz for US Senate.
HK court orders financial disclosures in Mantra Chain dispute.
New York regulator hunts crypto and AI specialist for policy unit.
Exchanges gear up crypto advocacy in Canada as elections loom.
Kamala Harris campaign engages with Circle CEO on crypto policies.
SEC charges promoters of alleged $650M NovaTech crypto pyramid scheme.

CASE STUDY

Should Oracle-Like Tech be Patented?

Patent Cancellation Petition - Amanda Tuminelli

State of play: In September 2023, DeFi Education Fund (DEF) petitioned the US Patent & Trademark Office to cancel a patent related to oracle-like technology owned by True Return Systems (TRS).

On Aug. 12, DEF announced that all disputes concerning this patent had been resolved.
DEF has successfully purchased the TRS patent, which was previously used to sue MakerDAO and Compound
DEF dedicated this patent to the public, effectively ending the lawsuits against MakerDAO and Compound and ensuring that similar legal actions will never be filed in the future.
DEF stated that “Patenting technology that is widely used, like Oracle technology, goes against the very principles of open source software development.”

Our Take: In open-source communities (re: crypto), there is strong resistance to patenting technologies that are widely adopted as such patents can stifle innovation and limit access to essential tools or technologies.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our comprehensive database of crypto regulations around the world👇

NOTEWORTHY READS & MEME

Florian’s read on software license for DeFi.
Circle’s paper on risk-based capital for stable value tokens.
Coin Center’s blog on their win on the crypto tax reporting scheme.

I've been writing a song a day for 16 years and 211 days.
Today, I’m suing the SEC.
(Yes, this is real)
— 16 years of song a day (@songadaymann)
4:24 PM • Jul 29, 2024

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.