Bitcoin drops 1% to start the week, and Texas regulators oppose Voyager deal: CNBC Crypto World
S. We explain why the imfs chief says Banning crypto shouldnt be ruled out and the Final witness from the recent Senate Banking Committee hearing on crypto breaks down what she thinks about the secs enforcement action on the space Music. Welcome to cnbcs crypto world Im, Mackenzie sigalos crypto prices in the red to kick off the week as of noon. Eastern Bitcoin dropped about one percent ether dipped slightly, but stayed above. The 1600 Mark and Solana fell more than two percent this after the Solana, blockchain was hit by an hours, long Network slowdown and Tech issues over the weekend on Saturday Solana tweeted that an upgrade problem quote caused block finalization to slow significantly. The next day Network functions resumed. Okay, lets talk about the top stories. First, Texas Regulators are voicing their opposition to binance U.S, potentially buying Voyager the bankrupt. Crypto lender still owes Alameda research, which was Sam, Bateman Freeds hedge fund, about 445 million dollars, and Regulators in Texas argue that would reduce the amount of money paid out to voyagers creditors if the deal with Finance us ends up going through now. According to this court filing by the Texas department of banking and the Texas state Securities board, voyagers creditors might be better off if the company liquidated assets. The Texas Regulators also warned that binance us may be illegally offering Securities. Through its staking program, we reached out to binance us for comment, but we didnt immediately hear back according to the Friday filing.
If Alameda is successful in providing its administrative expense claim, recovery could be decreased from more than 50 to about 25 percent. Coindesk reported lawyers from the bankrupt crypto lender have said the binance USD has significant creditor support, but according to the Texas filing those creditors werent sufficiently warned about the risks associated with Alameda filings from last weeks show is States for Voyager and FTX reached an interim agreement On the disputed loan payments, where the bankrupt crypto lender will keep hold of the funds pending resolution by court order or final settlement next Illinois is trying to follow New York when it comes to state level, crypto regulations, a coordinated pair of bills have been introduced in Both chambers of the Illinois General Assembly, designed to protect residents in the state from fraud and established regulatory oversight of crypto. According to this news release, one of the bills requires crypto exchanges and other businesses to obtain a license to operate in the state similar to regulation. In place in New York and under consideration in the California legislature, the bill also establishes consumer protections, including investment disclosures, and would require companies to have plans for addressing risks like money laundering. Last up the international monetary funds Chief said over the weekend that banning crypto should not be taken off the table if digital assets begin to pose higher risks to financial stability. The comments come during the recent G20 meeting in India. The IMF managing director stressed the need for a quote very strong push regulation, noting that if regulation fails or it doesnt happen, quick enough thats when a crypto ban should be considered given the lack of Consumer Protections, U.
S treasury secretary, Janet Yellen, said that she hadnt suggested The outright Banning of crypto activities yet but stress the need to put in place a strong regulatory framework. All right on to our main story were hearing from the Final witness at the Senate banking committees. Discussion on why Financial system safeguards are needed for digital assets, crypto worlds, Talia Kaplan spoke with Linda Jing about the hearing shes a visiting scholar on financial technology at georgetowns, Institute of international economic law and a former regulator who also discussed the secs enforcement action on crypto. I want to point out that your former regulator, yourself, which you noted when you testified in front of the Senate Banking Committee and during the hearing you argued that there is an urgent need to establish formal Federal regulatory oversight and demonstrate the inadequacy of regulating solely by Enforcement, at a time when weve seen the SEC file more than 120 enforcement actions in the crypto space. So what kind of Regulation do you think would be more appropriate? Well, thank you for that question. The part of good governance is having public notice and comment rule making processes just like Congress cannot draft laws without public input. Similarly, Regulators, even though our Regulators have been stood up by Congress to be independent Regulators, they still need to involve the public in their policy. Making and so um what they have been doing so far has been inserting policies in regulatory actions, and that means its very difficult, almost impossible for the public to get involved, to provide input to provide comment to provide feedback on these policies.
What kind of rules would be helpful, regulatory Clarity that would provide Pathways for crypto participants to come into the regulatory for a perimeter. Currently, There is almost no clear pathway for crypto exchanges, for example, to become registered and regulated under the federal parameters, and this is something that we really need to fix during your testimony. You also pointed out that the SEC has not initiated any formal rulemaking process to update Securities laws that you note are decades old. You argue that an update is needed to account for The Unique attributes of digital assets that are determined to be Securities. Do you think the regulator will in fact consider an update, or do you think Congress needs to step in what is more realistic? We need to have at least one or the other, if not, both the uh regulations need to be drafted and promulgated with public input and if, if not that, then Congress needs to step in and adopt legislation and make The Regulators promulgate the clarity that the industry Needs the industry wants to be under the uh regulator to be within the regulatory perimeter. Looking at how um U.S digital innovation has been evolving, we are reaching a point now, where how uh policy makers decide in terms of the guard rails to put in place will actually determine how our digital economy will evolve over time, and so this is a very Pivotal moment for Congress and Posse makers, including our Regulators, to act now, thats right.
In fact, during your exchange with Senator Tim Scott, you noted that were at that pivotal moment in history, where the current decisions of policy makers will affect how the US economy grows. In the future – and you stress that the guard rails, that lawmakers put in place now will affect generations to come. So what would you say are the main factors lawmakers need to consider at this point in time? U.S competitiveness has been a Hallmark of our economy, and why are we a leader is because we allow for Innovation, especially digital Innovation and and if we do not safeguard that ability to remain competitive, then the next generation will be inheriting a digital economy. Thats going to be much less uh developed than say other jurisdictions like the EU, which is already in the process of finalizing its adoption of its crypto regulation. Of many other countries like Australia, Hong Kong, Singapore, Japan or all in the process of updating their rules, and not to mention China, which has been on a multi year, journey to developing a digital economy in their own Paradigm. And so here we must remember that one of the reasons why we have so much uh, uh international power and Leadership, is because our own Financial system is is so strong and and dominant due to uh, clear rules of the law. And here we, we simply just need clear rules of the road that will allow digital Innovation to develop in a responsible way that protects consumers and investors and not only protects consumer investors, but also to empower us as consumers and were moving to a point where the Digital economy means that our data is going to become the oil of our of our economy, so we should be empowered to be able to control our personal data and how we want to use that data when we interact with the digital economy.
So what do you think it will take for the U.S to become a leader in the digital asset space or at least catch up with other countries? I think there needs to be a few important building blocks that may be laid in place, um, so the first being a clear pathway for digital identity Solutions where we as individuals can control our own digital identity assets and then two uh, the empowerment of individuals, to Have uh data rights, you know the ability to control our data, the ability to correct our data and uh. Why is this important on on on blockchain its because once we are in a full, fledged digital economy, all our transactions will be transparent, um. How were going to be paid even will be transparent right and so what kind of guardrails we want to put in place, so we can still maintain data privacy while respecting AML and kyc requirements. Okay, thats all for crypto world today, but well, be back again tomorrow.