Adeyemo Advocates for More Crypto Oversight

The Breakdown First Five - Wednesday, April 10, 2024

Welcome back to The Breakdown First Five — the 5 most interesting and/or important stories in bitcoin, crypto, and markets to start your day.

5. Lummis: Fear of Bitcoin

Senator Lummis spoke at a DC event to warn that this administration fears Bitcoin because they can’t control it. She said this is driving policy decisions, adding that “they know its potential.” Lummis noted that the positive impact of Bitcoin mining in grid stabilization and methane capture is being noticed in Congress. Looking to the election, she highlighted Sherrod Brown’s tight re-election and urged crypto supporters to get him on the record during public events. 

4. Warren: Stablecoin Risky

Elizabeth Warren sent a letter to House financial services committee leaders to warn about the risks of passing stablecoin legislation. The unsubtle letter was also delivered to Politico in time to make their morning newsletter. Warren claimed that stablecoins are increasingly used in illicit finance and could present a financial stability risk.  Warren is clearly pulling out all the stops to block stablecoin legislation, but it’s unclear how much support she has in the Senate. 

3. McHenry: Still Hopeful on Stablecoins

Patrick McHenry still thinks there’s a chance to pass stablecoin legislation this year, but acknowledges that the window is closing. Negotiations are still underway with his Democrat counterpart, Maxine Waters. The main sticking point is still the use of state regulators to provide oversight. A counterpart bill will be introduced in the Senate later this week by Senators Gillibrand and Lummis. 

2. Immutability Will Keep You Out of Jail

Coin Center Research Director Peter Van Valkenburgh has suggested that developers should make their smart contracts immutable if they don’t want to “end up in jail.” This is the state of regulation in the US, where any ability to modify dApps could leave developers liable for hacks and other damages. He suggested the recent Uniswap lawsuit laid out the legal status, the writers of computer code are not liable for third party use as long as the contract is immutable. 

1. Treasury’s Adeyemo: Need More Crypto Tools

Deputy Treasury Secretary Wally Adeyemo appeared before the Senate banking committee to renew his calls for more crypto tools. The focus was on clarifying sanctions power, but Adeyemo was supportive of Senator Warren’s proposal which forces compliance on crypto infrastructure. The appearance fell a little flat, with Senator Tim Scott calling crypto reforms a scapegoat for broader failures of this administration to tackle illicit finance in the tradfi system.