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Gensler Wants More Money to Regulate Through Enforcement

Plus a new Senate DeFi bill

Author

Nathaniel Whittemore
July 20, 2023

The Breakdown First Five - Wednesday, July 20 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 political cartoon of a giant pile of money and bitcoin in front of the capitol building in Washington D.C.

5. Telsa bag holding

Once again Tesla announced that they were holding onto their Bitcoin. Tesla hasn’t bought or sold any Bitcoin over the past four quarters after dumping the majority of holdings last year. Their financial report was otherwise mildly positive, with a small beat on earnings. A doge comment and rumors of Bitcoin payments suggest Elon’s relevance to Crypto will continue.

4. Nasdaq bails on Custody

Nasdaq has abandoned its plans to build out a Crypto custody product citing “the shifting business and regulatory environment in the U.S." The product was first announced in September last year when it looked like the Crypto industry could expect clarity instead of Wells notices. The exchange operator will still look to play a role in “supporting the evolution of the digital asset ecosystem”, primarily through attempting to list the Blackrock ETF.

3. FTX COO joins Sino Global

Former FTX COO Constance Wang has joined crypto fund Sino Global Capital as its head of gaming. Want was described as SBF’s “right hand” during fundraising drives and was at the firm from the early days in 2019. She reportedly lived in the notorious luxury penthouse along with other senior FTX executives. Wang has been subpoenaed by FTX creditors but was not dragged into any of the criminal cases.

2. Senate DeFi bill

A Senate bill would place strict AML & KYC requirements on DeFi protocols. The bipartisan bill would bring DeFi compliance up to a similar level as banks and casinos. In dealing with who would be held accountable for decentralized networks, the bill essentially looked to whoever was most convenient. If no one controls the protocol, then investors with over $25M committed to development would have to deal with enforcement action.

1. Gensler’s big ask

SEC Chair Gary Gensler appeared before the Senate Appropriations Committee to ask for a massive funding bump. Gensler wants to fund 170 new roles to bring total headcount firmly above 5,000. Senators from both sides criticized Gensler’s approach, but mainly pushed for tougher and earlier enforcement of fraud. Sen. Kennedy said SBF was obviously deficient, saying he looked like “the fourth runner up in a John Belushi look alike contest.”

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Thanks for reading -NLW