New Senate Bill Targets Stablecoins

The Breakdown First Five - Thursday, April 18, 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. Pre-Halving Jitters

Bitcoin dropped below $60,000 for the first time since early March, suggesting that traders are getting cold feet ahead of the halving. Analysts note that demand is strong below these levels, but $59,000 will still be a key level. Some are warning that the halving could be a sell the news event. Others point out that this 18% drawdown is still historically mild. 

4. SEAL Team Expands

The crypto security initiative launched by Paradigm’s Samczsun has expanded to offer an information sharing platform. So far, SEAL has provided expert advice and crisis management assistance. They now seek to log and share details on every crypto hack to help security experts connect the dots. 

3. Kraken Wallet

Kraken has joined rival exchanges in offering their own self custodial wallet. The past few years has seen a wallet become a core product for crypto exchanges, allowing customers to get on chain and try out crypto. Kraken’s product is the first of these exchange wallets to open source their code, allowing for greater transparency. The wallet supports Bitcoin, Ethereum, Solana, Dogecoin and several Ethereum Layer 2s, including Base. Wen Kraken chain?

2. Register “All the Stuff”

Former SEC head of crypto litigation Ladan Stewart has appeared on her first public panel since leaving the agency. Although she acknowledged that tokens aren’t securities, Stewart claimed the investment contract is the token plus “all the stuff around the token.” She noted that firms can’t register “all the stuff” so should probably just register the token. Other panelists were bewildered, with Lawyer Lewis Cohen pointing out that “It’s impossible, it’s not hard.”

1. New Stablecoin Bill

Senators Cynthia Lummis and Kirsten Gillebrand have published a new stablecoin bill. This is a completely separate effort to the McHenry/Waters bill working its way through the House. The new bill would ban algorithmic stablecoins, possibly including DAI. It has the standard liquid reserve requirements and compliance measures, but seeks to force large stablecoin issuers to register as limited purpose banks and submit to oversight from bank regulators.