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As Congress Meets on Crypto, the Partisanship Gets Rancorous

Plus an INSANE tax bill for FTX

Author

Nathaniel Whittemore
May 11, 2023

The Breakdown First Five - Thursday May 11, 2023

5. House Hearing on Regulatory Gaps

Financial Services and Agriculture committees held a historic joint meeting to discuss gaps in Crypto regulation. With other global regulation like Europe’s MICA moving forward, Chairman McHenry made the point that “the purpose here is to make law”, but US crypto lawmaking has lagging. More hearings, but we appear no closer to firm legislative proposals.

4. Miladies are no meme

Getting into the spirit of memecoin season, Elon Musk tweeted a Milady meme, sending the price of the controversial NFTs skyrocketing. Sales are up 500% and the floor price has bumped up by 50%. Will Elon pump your bags next anon?

3. Arthur ordered to stop bullying Zhu

Crypto industry tough guy Arthur Hayes was ordered to stop picking on disgraced 3AC founder Su Zhu. Hayes has been tweeting at Zhu since 3AC blew up demanding the return of $6M he is allegedly owed. A Singapore Court issued a restraining order, telling Hayes to cut it out. I mean just the biggest friggin’ LOL in the world. Team Arthur.

2. Tax Wipeout

Between death and taxes, in this case death might be the call. The IRS has leveled a gigantic $44B tax bill against FTX group companies, primarily Alameda Research. The claim relates to partnership income taxes and payroll taxes that were supposed to be withheld. In a blow to FTX creditors, the taxman could step to the front of the line in bankruptcy, which could leave precious little to distribute if the claims are successful. Moar pain.

1. The Partisan Ship Has Sailed

Alongside yesterday’s hearing the Democrat talking points were leaked and they were, uh…aggressive. Parroting the message that the SEC has all the power they need and the law on their side, the note came down hard on the Republican view that additional clarity is beneficial to investors and entrepreneurs. Pro-Crypto legislation is apparently on the Republican docket for June, but not if the Democrats can do anything about it. Did Gary Gensler write this memo himself?!

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Thanks for reading -NLW