Regulation
Deadline for Biden to Veto SAB 121 Repeal Delayed
The delivery of H.J. Res 109 to President Joe Biden has been delayed, granting him an extended deadline until June 3rd to decide on the repeal of Staff Accounting Bulletin (SAB) 121.
This resolution, which aims at reversing an SEC rule that regulates cryptocurrency custodial services, passed the Senate with the support of both Democrats and Republicans.
Deadline for Biden to Veto SAB 121
H. J. Res 109, the resolution to repeal SAB 121, was passed in the Senate last week with a 60 to 38 vote with 11 Democrats, 1 Independent, and 48 Republicans supporting the measure. The resolution is aimed at the SEC’s rule that would make banks report customer-owned digital currencies as their own assets on balance sheets, an initiative which has received much opposition from the banking and cryptocurrency industries.
Update on #SAB 121 process. We received confirmation that Congress did not send over H.J Res 109, Resolution to repeal SAB 121, to Biden until last night.
That changes 10 day window. @POTUS now has until June 3rd to veto the Resolution (10 day window excluding Sundays). https://t.co/b9RHs8hS7a
— Cody Carbone (@CodyCarboneDC) May 23, 2024
The bill, proposed by the House Majority Whip Rep. Tom Emmer (R-Minn. ), focuses on the financial privacy and aims to curb overreach of government through financial transactions.
After the Senate vote, the resolution was not immediately transmitted to President Biden, altering the standard ten-day veto period to June 3rd. This delay is critical because it occurs during the congressional recess, thus affecting the possibility of a pocket veto and allowing the President ample time for the decision-making process while Congress is in its pro-forma sessions.
Presidential Decision Awaits
President Biden now faces three options regarding the Joint Resolution: He can approve it and sign it into law, he can reject it and veto it, or he can do nothing and it will become law. Initially, President Biden threatened a veto in the Statement of Administration Policy on May 8th arguing about financial regulation and supervision.
Nonetheless, the precedents of previous veto threats show that the first threats do not necessarily lead to the application of the veto, which means the outcomes can be different.
However, the SEC’s rule has been under criticism with critics claiming that it would frustrate innovation and encroach on personal business through the regulation of personal finances.
Industry Reaction and Regulatory Context
The move by the Senate to repeal SAB 121 has however received the backing of the cryptocurrency industry, and particularly Ripple’s Chief Legal Officer, Stuart Alderoty who considered the repeal as a victory against overregulation. SEC Commissioner Hester Peirce, who is often referred to as “Crypto Mom,” also expressed similar sentiments while discussing her concerns about the SEC’s stance on digital asset regulation.
At the same time, Michael Saylor, the CEO of MicroStrategy, has welcomed the Senate’s move, stressing the importance of defending the rights of digital currency holders and avoiding excessive regulation that could undermine the US’s standing in the global financial industry.
Amid this tension, today, Sen Cynthia Lummis restated the growing support for crypto assets in Congress following recent wins of the Senate’s decision to repeal SAB 121 and passage of FIT 21.
Read Also: Crypto Market Correction: $120B Liquidated As BTC, ETH, XRP, Altcoins Price Tumble
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Regulation
Alabama grants Transak a Money Transmitter License (MTL)
- Transak secures its first Money Transmitter License (MTL) in Alabama.
- The license boosts security, speed, and compliance for US cryptocurrency services.
- Transak targets further state licenses as it enhances its Web3 payments infrastructure.
On October 3, 2024, Transak USA LLC achieved a significant milestone by securing its first Money Transmitter License (MTL) from the Alabama Securities Commission.
This regulatory approval positions Transak as a fully licensed financial institution in the state, a key step in its mission to provide secure and accessible cryptocurrency services across the United States.
Transak expanding its foothold in the US
The Alabama MTL solidifies Transak’s commitment to regulatory compliance, underscoring the company’s efforts to build a secure and transparent infrastructure for crypto transactions in the US.
With cryptocurrency purchases already enabled in 46 states, the company is actively working to secure additional licenses across the country. This proactive approach highlights Transak’s determination to make cryptocurrency widely accessible and compliant with stringent financial regulations.
As a registered Money Service Business with FinCEN, Transak’s new license is a significant trust signal for its users. It allows the company to provide enhanced security, faster transactions, and a more seamless user experience for crypto purchases in Alabama. The move also benefits decentralized platforms integrated with Transak’s services, enabling them to offer their users a smoother and more compliant crypto purchasing experience.
Bryan Keane, the Compliance Officer at Transak, remarked, “Obtaining the Money Transmitter License in Alabama showcases our commitment to compliance and our mission to make cryptocurrency accessible and secure for everyone.”
In the same breath, Sami Start, the CEO of Transak, emphasized the importance of the US market, stating, “Securing state licenses like this one is essential to delivering the best possible services here.”
With over 5.7 million users across 160 countries, Transak continues to expand its presence as the largest Web3 payments infrastructure provider. Headquartered in Miami, with additional offices and tech hubs globally, Transak remains focused on obtaining more state licenses in the US, ensuring its users enjoy an increasingly reliable and legally compliant crypto experience.
The Alabama MTL marks a major step forward for Transak as it strengthens its foothold in one of the world’s most regulated and lucrative markets.
Regulation
CFTC votes on allowing DLT-based collateral in commodities and derivatives trading
- CFTC’s subcommittee recommends using DLT-based collateral in trading.
- Approval could broaden access to digital assets for smaller market participants.
- Strong ETF inflows signal growing institutional interest in digital assets.
In a significant development for the digital assets market, the US Commodity Futures Trading Commission (CFTC) is reportedly considering a proposal that would enable the use of digital ledger technology (DLT)-based collateral in commodities and derivatives trading.
According to Bloomberg, a subcommittee of the CFTC’s Global Markets Advisory Committee recently voted to recommend this proposal, which, if approved, could streamline transactions and promote broader adoption of digital assets in traditional finance.
A step toward mainstream adoption
If the proposal receives final approval from the main committee, it could lead to a paradigm shift in how trading collateral is managed.
The adoption of DLT-based collateral would allow traders to settle transactions using digital assets with the same speed and efficiency that digital ledger and blockchain technology offers.
This change would enable brokers to accept tokenized assets, such as BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) token, through market-embedded systems.
While the use of blockchain-based assets as collateral is already gaining traction among major financial institutions like BlackRock and JP Morgan, the CFTC’s potential approval would catalyze broader adoption across the industry.
As it stands, only large firms have been able to utilize these innovative financial instruments, but this move could open the doors for smaller market participants to access similar benefits.
Uncertainty ahead
Despite the positive momentum surrounding the proposal, several steps remain before it can be formally submitted for CFTC approval. The main committee must first review and endorse the subcommittee’s recommendation, and there are no guarantees that the CFTC will approve the proposal in its current form.
Regulatory concerns may arise regarding which institutions and blockchains are permitted to participate, which could introduce potential restrictions that may limit the scope of the initiative.
Furthermore, the broader context of digital assets in traditional finance cannot be ignored. Recent trends, such as strong inflows into spot Bitcoin exchange-traded funds (ETFs), indicate a growing acceptance and interest in digital assets among institutional investors.
For instance, BlackRock’s Bitcoin ETF has recently outperformed its peers, witnessing the highest daily inflow of any fund on September 25, marking a five-day streak of inflows across all spot Bitcoin ETFs in the United States.
This surge in interest may influence the CFTC’s decision-making process as they consider the implications of allowing digital assets as collateral.
As this unfolds, stakeholders will be watching closely as the regulatory landscape continues to evolve, potentially paving the way for a more integrated future for digital assets in commodities and derivatives trading.
Regulation
Stuart Alderoty Slams US SEC As Ripple Weighs Cross Appeal
XRP Lawsuit: Ripple’s Chief Legal Officer, Stuart Alderoty, has voiced his frustration with the U.S. Securities and Exchange Commission (SEC) following the agency’s recent notice of appeal.
Ripple is now contemplating filing a cross-appeal, potentially targeting both Judge Analisa Torres’ ruling on institutional sales or the $125 million penalty imposed in August.
XRP Lawsuit: Stuart Alderoty Slams US SEC
In a recent X post, Ripple CLO Stuart Alderoty addressed the SEC’s decision to appeal parts of the court’s ruling. In this case, the company has until October 18 to let the court know if it will appeal the decision, as per Fox Journalist, Eleanor Terret. According to her, the aspects of Ripple’s appeal could be based on Judge Torres’ findings that the XRP sales to institutional investors were unlawful under securities laws and the $125 million fine.
If Gensler and the SEC were rational, they would have moved on from this case long ago. It certainly hasn’t protected investors and instead has damaged the credibility and reputation of the SEC.
Somehow, they still haven’t gotten the message: they lost on everything that… https://t.co/1hW7xVSL9b
— Brad Garlinghouse (@bgarlinghouse) October 2, 2024
The cross-appeal would be wrapped into the same case now heading to the U.S. Court of Appeals for the Second Circuit.
Alderoty stated that he was dissatisfied with the decision of the SEC to pursue the litigation, adding that the complaint was a complete embarrassment to the commission. He noted that the court dismissed allegations of negligence on the part of Ripple, as well as lack of fraud and harmed investors. As much as the US SEC has been adamant, Stuart Alderoty was insistent that Ripple would continue its defense and more so for the rest of the cryptocurrency companies.
Agency’s Appeal and Brad Garlinghouse Response
The SEC filing of its notice of appeal in the XRP Lawsuit is just days before the October 7 deadline, signaling its intent to challenge Judge Torres’ ruling from July 2023. In that ruling, the court found that while XRP’s programmatic sales through exchanges were not securities transactions, sales to institutional investors did violate securities laws. The reason to appeal to the Securities and Exchange Commission can therefore be either or both of these points though more details have not been confirmed yet.
In his response to the decision, Ripple CEO Brad Garlinghouse also stated that the SEC has continued to squander taxpayers’ funds on what they described as a “losing fight.” Garlinghouse further noted that the SEC had not served the interest of investors but instead harmed itself by stating “I’m not surprised. I’m pissed.” He also pointed out that XRP’s status as a non-security for programmatic sales remains unchanged despite the Securities and Exchange Commission’s appeal.
Alderoty also noted the timing of Gurbir Grewal’s resignation, the SEC’s Director of the Division of Enforcement, who stepped down one hour before the SEC filed its appeal on the XRP Lawsuit. Grewal’s departure has raised more questions on the future of the Securities and Exchange Commission and its leadership since Chair Gary Gensler has been under fire over the handling of cryptocurrency and enforcement.
Both Ripple CLO Stuart Alderoty, Brad Garlinghouse and the rest of leadership, have constantly lambasted the Securities and Exchange Commission for its handling of the case, accusing the agency of being in bad faith. This comes as Grewal departs from the agency, leaving room for speculations whether or not there will be changes to the US SEC’s approach to enforcing laws in the crypto space.
XRP Price Tanks Over 10% Post Appeal
After the US SEC notice of appeal on the XRP lawsuit, the token’s price has decreased significantly. At press time, XRP price was trading at $0.5331, an 11% decline from the 24 hour high.
Despite this dip, cryptocurrency commentator CredibleCrypto highlighted Bitwise’s recent filing for an XRP exchange-traded fund (ETF), signaling growing interest in the asset.
Yes, I’m aware of the SEC appeal on the @Ripple case, but at the same time in the last 12 hours (seemingly unbeknownst to a lot of crypto twitter) @BitwiseInvest just filed for an $XRP ETF.
XRP will be the next approved ETF after $BTC and $ETH imo.
As far as narratives go, I… https://t.co/CBwx6IT9nc
— CrediBULL Crypto (@CredibleCrypto) October 2, 2024
The analyst as a result suggested that XRP could be the next cryptocurrency after Bitcoin and Ethereum to receive ETF approval, despite the ongoing legal case. The appeal, according to CredibleCrypto, is unlikely to affect XRP’s market trajectory in the long term.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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