FedNow is Here

Plus the NYT publishes excerpts from the Alameda CEO's diary

Author

Nathaniel Whittemore
July 21, 2023

The Breakdown First Five - Friday, July 21 2023

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

/imagine prompt cinematic movie still of federal reserve chairman jerome powell with sunglasses and a leather jacket at dusk, lens flare --ar 16:9

5. Crypto bill introduced without McHenry

The McHenry/Thompson draft Crypto bill has been formally introduced without McHenry as a key sponsor. The bill keeps SEC registration for tokens and a pathway to decentralization but now excludes many of the tokens that make DeFi work from its digital assets definition. While the bill retains many of its positive attributes, but some are calling it a backdoor DeFi ban.

4. Dear Diary

The DOJ has accused SBF of leaking Caroline’s dairy. The diary was written up by the NYT on Thursday, but prosecutors say the documents were illegally leaked from evidence in the criminal trial. They are seeking an explicit prohibition on further public statements from witnesses, saying that the leak could prejudice a fair trial.

3. Where’s the money?

The FTX estate is seeking the repayment of over a billion dollars from former executives. The new lawsuit alleges that FTX assets were squandered on luxury homes and political donations by SBF and others. In addition, $725M in equity was distributed without payment. Caroline Ellison is alleged to have received a $22.5M bonus at the height of the crisis last November. Sprinkled amongst things that were claimed in previous litigation was one off the wall allegation.

2. Coin Center dismissed

Coin Center’s lawsuit against the US Treasury regarding tax code 6050I has been dismissed. The lawsuit challenged changes introduced last summer that would require Crypto users to report the details of their counterparty to the government. Coin Center claimed the provision violated the 4th amendment which prohibits unreasonable searches. Decision will be appealed, with the Court saying that a lawsuit could not go ahead before the measures begin in January.

1. FedNow Launches

The Federal Reserve’s instant payment network has gone live with 51 partner banks and service providers. The system offers near instant transactions between bank accounts with immediate access to funds. Concerns that the system was related to a CBDC were dismissed by the Fed, who insisted this was just a faster form of existing payments infrastructure. Announcements lacked any requirement to eat the bugs.

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Thanks for reading -NLW