Hi. Ed here.

The Trump administration and Congress are moving swiftly to satisfy the agenda of an industry that wasn’t even a player in Washington a few years ago. 

On Thursday, Trump pulled the plug on the Biden administration’s  so-called DeFi broker rule by signing a bi-partisan legislation into law.

The rule would’ve forced crypto websites and digital wallets to record and maintain vast amounts of customer data the same way stock brokerages do. 

The idea was that the Internal Revenue Service would use the data to prevent tax evasion and help crypto users report their taxes, Aleks Gilbert reported.  

It’s a big win for the likes of MetaMask, which was facing the prospect of setting up a costly customer data management system at odds with crypto’s penchant for privacy. 

Then on Sunday, Senator Tim Scott, the chair of the influential Senate Banking Committee, said a key stablecoin bill was “stamped, done, and heading to the Senate floor.”

This is a major breakthrough for the industry. 

The Genius Act will lay out a statutory framework for stablecoins and potentially usher in a new era when traditional payments processing firms as well as banks ply customers with their own offerings. 

Should stablecoins become integrated into the payments processing infrastructure it would mark the first time a blockchain-based technology became a mass market staple. 

There is plenty of dissent. 

Senator Elizabeth Warren and Representative Maxine Waters, the ranking Democrats on their respective finance committees, have warned that the Genius Act and its House counterpart fail to protect the financial system or consumers from fraud. 

Yet it appears there’s enough Democratic support in the Senate to pass the Genius Act and it could soon be on Trump’s desk. 

Then there was the extraordinary memorandum released by the US Department of Justice last week that said prosecutors would cease pursuing many types of crypto crimes. 

The guidance drew a distinction between platforms that willfully allowed or facilitated fraud and other unlawful activity, and those that were simply used by bad actors.

The development was good news for Roman Storm, the Tornado Cash co-founder who is scheduled to go on trial in July on charges of facilitating money laundering. While the DoJ signalled the memo should not affect Storm’s case it probably would not have been brought under the guidance.

So, for all the angst in the markets, crypto is making strides on the policy front.

ICYMI

• Binance demands Nigeria drop $81bn case after prosecutors misspell lawyer’s name in email

  There’s a big difference between a dot and a dash. Perhaps as much as $81 billion of a difference. On Monday, lawyers for Binance asked a Nigerian judge to invalidate an $81 billion penalty the nation’s tax agency is demanding the crypto exchange pay for operating without a licence.

• New SEC crypto guidance drops as Peirce and Atkins steer post-Gensler reset

  Crypto’s regulatory recalibration is underway, and the Securities and Exchange Commission is starting to put down its first markers.

• Jack Dorsey’s Block fined $40m after Russian crime ring abused Cash App’s Bitcoin feature

  Compliance missteps inside Cash App have resulted in a hefty fine for its parent company, Block. New York’s Department of Financial Services imposed a $40 million penalty on the Jack Dorsey-founded fintech after identifying shortcomings in its anti-money laundering and know-your-customer protocols.

Story of the Week

Indicted Tornado Cash dev just got a boost from an unlikely source — US prosecutors

The Department of Justice this week said it would stop pursuing certain crypto crimes. And that could be good news for Tornado Cash co-founder Roman Storm, crypto attorneys say.

In a four page memo published Tuesday, the department said it no longer intends to pursue cases in which it charges crypto mixers “for the acts of their end users or unwitting violations of regulations.”

“The memo was as good as the Storm team could have probably hoped,” said Bill Hughes, the general counsel at MetaMask developer Consensys and a former Justice official.

Comment of the Week

Senate Republicans have moved swiftly to vote the landmark stablecoin bill, the Genius Act, our of committee and, according to Senator Tim Scott, it’s in the home stretch.

DL News is an independent news organisation that provides original, in-depth reporting on the largely misunderstood world of cryptocurrency and decentralised finance. From original stories to investigations, our journalism is accurate, honest and responsible.

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