Regulation
How New Jersey’s Potential NFT Regulation Can Set Poor Precedent
For the first time, we’re seeing an individual U.S. state (in this case, New Jersey) pursue NFT-specific regulation in what is bound to be a messy situation.
A state bill, titled the ‘Digital Asset and Blockchain Technology Act,’ has already passed assembly and is on its way to the Senate – where speculators have largely expressed belief that it will pass.
Let’s dive into all you need to know regarding this bill and it’s potential implications on NFTs and crypto.
New Jersey: No Stranger To Crypto Enforcement
New Jersey is not foreign to the concept of ‘cracking down on crypto.’ There’s a variety of examples of this, but one recent memory surrounds the now defunct CeFi platform, Celsius. Celsius was based in New Jersey, and the state was one of the first to put the clamps on Celsius’ operations. Several other states, such as Alabama and Texas, followed suit, and less than a year later, Celsius operations closed and the company was chalked up as another 2022 bear market domino to fall.
Now, state regulators are back again, this time looking to establish a “Nationwide Multistate Licensing System” for NFT issuers. At it’s face, should this bill pass, it looks to be little more than an unnecessary, unenforceable piece of regulation that will serve little good to independent creators and collectors in the state.
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What It Means For Crypto Users
Crypto users that are based in the state of New Jersey, according to the language in the proposed bill, will not be able to “engage in a digital asset business activity” as a business or individual in the state without registering for a license. The licensure oversees anything from custodial services to “issuing a digital asset” – i.e., something as simple as minting and selling an NFT.
Crypto and NFTs are littered with nuance, making regulation a near necessity but simultaneously, a massively difficult task. While custodial services that are managing processes around tokens on behalf of customers is undoubtedly an area that deserves regulation, that regulation should not encompass works from an independent visual designer who wants to mint an NFT collection. It’s unfortunate that New Jersey legislators are not working to establish terms that differentiate these two worlds.
Furthermore, there is plenty to be said for enforcing this sort of regulation. While enforceability against major firms, like the aforementioned Celsius, is much more manageable, the feasibility of enforcing this bill is unclear – and the legislation leaves us with more questions than answers.
Crypto communities are notorious fans of anonymity and living ‘internet-first,’ where geographical bounds are far from essentially and less identity-defining than ever before. It leaves us with the belief that for the general public, it will be difficult – if not impossible – for regulators to manage.
At best, perhaps it can set guardrails for corporate entities engaging in the space.
- The US House Oversight Committee has announced its investigating cases of debanking of crypto companies.
- Uniswap, Coinbase, Kraken, a16z and Blockchain Association are among crypto companies and entities to receive a letter asking for information on the alleged debanking.
- The Senate Banking Committee is also set to hold a hearing on debanking in early February.
The U.S. House Oversight Committee is probing the issue of alleged debanking of crypto companies and individuals.
On Jan. 24, the committee sent a letter addressed to several crypto executives asking them to share information on the debanking claims. Apart from crypto companies, US First Lady Melania Trump also highlighted the issue.
Investigations are part of the new focus on crypto regulation following a largely negative four years under President Joe Biden’s government.
🚨 BREAKING 🚨
Chairman James Comer Investigates Apparent Politically Motivated Debanking of Thirty Tech Founders, First Lady Melania Trump
Chairman Comer is investigating recent reports of financial institutions debanking lawful American businesses and individuals based on… pic.twitter.com/X7tZlsz3NK
— Oversight Committee (@GOPoversight) January 24, 2025
Those to receive the letter are Uniswap Labs CEO Hayden Adams, Coinbase co-founder and CEO Brian Armstrong, a16z co-founder Marc Andreessen and Kraken CEO David Ripley. The letter also sought the input of Lightspark CEO David Marcus and Blockchain Association CEO Kristin Smith.
“The Committee seeks to understand whether this pattern of debanking stems from financial institutions themselves or from government actors,” the letter reads in part.
Senate Banking Committee to hold a hearing
Crypto debanking has also attracted the attention of the House Financial Services Committee and the Senate Banking Committee, both of which are looking to get to the bottom of this heavily criticised developments.
“The Committee is concerned about the chilling implications this overreach may have in silencing industries arbitrarily disfavored by regulators, driving consequential technological and financial innovation overseas, and preventing targeted businesses from making payroll and paying employees their wages,” the Oversight Committee’ letter continues.
The Senate Banking Committee has announced it will hold a hearing on crypto debanking on February 5, 2025. Committee chair Tim Scott said:
“Debanking is un-American – every legal business deserves to be treated the same regardless of their political beliefs. Unfortunately, under Operation Chokepoint 2.0, Biden regulators abused their power and forced financial institutions to cut off services to digital asset firms, political figures, and conservative-aligned businesses and individuals.”
Asset managers Grayscale and Coinshares have both filed with the US Securities and Exchange Commission (SEC) to offer a Litecoin ETF. This makes them the second and third fund managers to do so after Canary Capital.
Grayscale And Coinshares File For Litecoin ETF
In an X post, the President of the ETF Store, Nate Geraci, revealed that Grayscale and Coinshares have filed with the US SEC to offer a Litecoin ETF. In Grayscale’s case, the asset manager filed a 19b-4 form to list and trade its Grayscale Litecoin Trust as an ETF.
Meanwhile, Coinshares filed an S-1 form with the Commission to offer an LTC ETF. These are the second and third applications for such ETF following Canary Capital’s filing last year.
This continues the flurry of crypto-related ETFs that have flooded in ever since US President Donald Trump took office and designated Mark Uyeda as the acting US SEC Chair.
Boluwatife Adeyemi
Boluwatife Adeyemi is a well-experienced crypto news writer and editor who has covered topics that cut across DeFi, NFTs, smart contracts, and blockchain interoperability, among others. Boluwatife has a knack for simplifying the most technical concepts and making it easy for crypto newbies to understand. Away from writing, He is an avid basketball lover and a part-time degen.
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.
In current-day Argentina inflation is no joke and prices change every day. That means it’s fertile ground for bitcoin and crypto adoption. “The central bank has warned repeatedly about the risk of investing in volatile digital currencies, and some adopters are taking it carefully,” says Reuters. Once in a blue moon, mainstream media reports on bitcoin and crypto in a relatively positive light, and Argentina inspired one of those rare articles.
According to Reuters, “crypto penetration in Argentina was 12%, around double the level of Mexico and Brazil.” The cause might be that the peso “has depreciated 14% this year against the dollar” and that “annual inflation rose to 58% in April and could go as high as 70% this year.” Not only that, Argentina is under “capital controls limiting foreign exchange to $200 monthly.” So, there’s a huge incentive to seek refuge in bitcoin and stablecoins.
From Argentina: The Cafe Owner
In the Buenos Aires port of Puerto Madero, the Crypstation cafe recently opened. Screens show “real-time cryptocurrency price quotes” and they accept bitcoin and crypto. Reuters quotes one of Crypstation’s founders, Mauro Liberman:
“The local environment is pushing people to protect their capital in cryptocurrencies and so we see growth speeding up. Throughout Latin America the growth potential is enormous. It is an avalanche that won’t be stopped.”
From Argentina: The IT Specialist
Another interviewee is Victor Levrero, “an IT specialist in Buenos Aires province” who “puts his extra savings into stablecoin and bitcoin each month after using up his $200 quota to convert pesos to dollars.” He told Reuters that he doesn’t even bother with banks anymore:
“Basically, it’s because I lose less. With Argentine inflation of between 60-70%, and fixed terms paying 30-35%, it just doesn’t work.”
BTC price chart for 09/20/2022 on Bitstamp | Source: BTC/USD on TradingView.com
From Argentina: The Self-employed Computer Technician
Even though he’s in computers, Marcelo Vila only has “a small amount invested in bitcoin and Ether.” He’s proceeding with caution, as all newcomers should:
“The idea is to expand the proportion of funds invested in crypto. But until I get to know the crypto market, I can’t put a lot of money into it.”
From Argentina: The Home Miner
The fourth subject is Sebastian Carsorio, who comes from a poor neighborhood and “is looking to dig himself out of poverty using a home-made cryptocurrency mine he assembled with recycled computer parts from his work.” Impressive.
“I repaired the things and put it together in a computer,” he told Reuters at his home, where he had screens showing how the mining is going. He started with Ethereum and then bitcoin – which allowed him to buy some land and go back to school.
“I’ll keep mining because it’s a good way of saving,” Carsorio said, explaining that he gets a better exchange rate for pesos than he would on the street. “When money has been tight, mining has saved me many times.”
How many Argentinians could say something similar? Bitcoin and crypto are taking hold in the country because people need them. The deal the government signed with the FMI that specifically demanded for them to discourage the bitcoin industry in Argentina can only do so much. People need a refuge from inflation and cryptocurrencies provide it, it’s as simple as that.
In recent news that reflect crypto adoption, Bitfarms recently started the engine on their brand new bitcoin farm in Argentina. For their part, the government of the wine-producing region of Mendoza announced that they will accept tax payments in cryptocurrencies.
Featured Image by Pexels from Pixabay | Charts by TradingView
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