Značka: law

Former pro-crypto CoC Brian Brooks to testify in a House hearing on the energy impacts of mining

As the U.S. Congress prepares to take a thorough look at the energy use of crypto mining, the list of witnesses for the Thursday hearing contains more proponents of blockchain technology than its outright critics.The House Energy and Commerce Oversight Subcommittee announced a hearing on “Cleaning Up Cryptocurrency: The Energy Impacts of Blockchains” last week, with the event itself scheduled for Thursday. The focus of the hearing will be on the energy and the environmental effects of crypto mining, specifically as it relates to networks that use a proof-of-work, or PoW, consensus mechanism.A Committee on Energy and Commerce staff memo released on Jan. 17 revealed the list of witnesses invited to testify. Among the five experts on the list, only one — Cornell Tech professor Ari Juels — can be definitively categorized as an outspoken critic of Bitcoin (BTC) mining in its current form. Ironically, Juels is one of two authors of a 1999 paper that defined and introduced the term “proof-of-work.”Another entry on the witness list is Brian Brooks, former U.S. Comptroller of the Currency and Binance.US CEO who in Nov. 2021 joined BitFury, a major player in the crypto mining industry, as CEO. Also notable is the presence of John Belizaire, CEO of Soluna Computing, a firm that is focused on developing green data centers for batchable computing. In a Jan. 6 blog post, Belizaire lauded Bitcoin’s energy consumption as a “feature, not a bug,” arguing that it provides a viable mechanism for absorbing excess renewable energy.Utility providers will be represented by Steve Wright, a recently retired former general manager of the Chelan County, Washington state, public utility district. During his tenure, Wright took steps to attract cryptocurrency miners to the county.Gregory Zerzan, Jordan Ramis shareholder and former acting assistant secretary of the U.S. Treasury, once noted that concerns around Bitcoin mining could be addressed by “transitioning away from fossil fuels.”The memo itself offers a rather balanced overview of energy-related concerns associated with PoW mining, although it also reiterates certain statements that have been questioned by recent research. For one, the authors stated that the energy consumption and environmental impact of crypto mining may grow in the coming years — a claim that was countered in Bitcoin Policy Institute’s fact-checking brochure.Jake Chervinsky, head of policy at the Clockchain Association, tweeted that the memo was “not all bad, but commits basic errors.”The House E&C Committee published a 9-page memo for this week’s hearing on crypto’s energy use. It’s not all bad, but commits basic errors, like repeating the fallacy of “per transaction” carbon emissions.Read it here & watch Thursday at 10:30 am ET: https://t.co/AgMes2zOwf— Jake Chervinsky (@jchervinsky) January 18, 2022The hearing is scheduled for 10:30 am EST on Jan. 20 and will be streamed here.

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Early birds: U.S. legislators invested in crypto and their digital asset politics

According to some estimates, as many as 20% of Americans were invested in cryptocurrencies as of August 2021. While the exact number can vary significantly from one poll to another, it is clear that cryptocurrencies are no longer just a niche passion project for tech enthusiasts or a tool for financial speculation. Rather, digital assets have become a widespread investment vehicle with the prospect of becoming mainstream. Optimistic as that is, this level of mass adoption still does not enjoy a commensurate political representation, with senior United States politicians largely lagging behind the curve of crypto adoption. This makes the very narrow group of congresspeople who are also hodlers particularly interesting. As a lawmaker, does owning crypto, or at least having some crypto exposure, mean that you also vocally support the digital asset industry?According to “Bitcoin Politicians” — a crowdsourced data project aimed at tracking U.S. political figures’ crypto holdings using public financial disclosures — there are currently seven known crypto investors across both chambers of Congress. Here’s a closer look at the way their personal financial strategies are reflected, if at all, in their public political stances.Michael McCaulMichael McCaul, a 59-year-old Republican representative from Texas, holds the position of ranking member of the House Foreign Affairs Committee. He was also the fifth-wealthiest member of Congress in 2018. McCaul is known for his hawkish foreign affairs positions — vocally opposing the U.S. withdrawal from the Yemeni Civil War and supporting President Joe Biden’s airstrikes on Iranian-backed targets in Syria.In 2016, McCaul co-sponsored a bipartisan bill proposing a commission to study the debate over the use of encryption, including its potential economic effects. In recent years, the Texas lawmaker hasn’t been seen making any public crypto-related statements.Barry MooreA newcomer to the House of Representatives, Barry Moore is a staunch Republican from Alabama. In January 2021, he objected to the certification of the results of the presidential election and even got his Twitter account temporarily suspended for posts that echoed the claims of a “stolen election.” According to a public disclosure, Moore purchased between $1,000 and $15,000 worth of Dogecoin (DOGE) in June 2021 — an investment whose value has since dropped nearly 50%. The legislator also invested in Ether (ETH) (up to $15,000) and Cardano’s ADA (up to $45,000). Still, Moore hasn’t publicly expressed his opinions toward crypto. Marie Newman57-year-old Marie Newman, another new addition to the House of Representatives, is a Democrat from Illinois who is aligned with the progressive wing of the party. She is a proponent of abortion rights, gun control, a $15 minimum wage and the Green New Deal.Newman holds Coinbase shares as of December 2021, having purchased between $30,000 and $100,000 worth. She also registered the acquisition of more than $15,000 in Grayscale Bitcoin Trust shares. Newman hasn’t made any public statements about the crypto-related assets, but she is a member of the Congressional Blockchain Caucus, a bipartisan group working to promote a more relaxed regulatory approach to crypto that would allow the technology to flourish.Jefferson Van DrewA retired dentist with almost three decades of experience as a New Jersey legislator, Van Drew was elected to the House in 2018 as a Democrat but changed his colors in 2020, becoming a Republican. This comes as no surprise, as Van Drew was one of just two members of the Democratic party to vote against former President Donald Trump’s impeachment inquiry in December 2019. Still, he voted in line with Democrats 89.7% of the time during his tenure in the party. In a 2020 disclosure, Van Drew accounted for up to $250,000 in an investment trust operated by Grayscale, one of the larger digital-asset management firms on the market. At the time, the representative’s office declined to give the press any details about the exact nature of the investment, and Van Drew himself has remained silent with regard to digital asset-related policy issues.Michael WaltzYet another recent House electee, Michael Waltz — a retired army colonel and former Pentagon adviser — is the first ever Green Beret to serve in Congress. A Republican from Florida, Waltz maintains a warrior ethos with a pinch of Florida spice, having called for a full U.S. boycott of the 2022 Winter Olympics over the Chinese Communist Party’s treatment of the nation’s Uyghur population. Waltz also voted against President Biden’s $1.9-trillion economic stimulus bill and opposed the establishment of a commission to investigate the Jan. 6, 2021 attack on the U.S. Capitol.According to disclosures, Waltz bought up to $100,000 in Bitcoin (BTC) in June 2021, which makes him one of the few lawmakers to publicly own the original cryptocurrency, specifically. Nevertheless, on social media, the representative prefers to speak on foreign policy issues, and when he was asked about his crypto investment, he compared Bitcoin to gold in terms of serving as an inflation hedge. Waltz is also a member of the Congressional Blockchain Caucus.Cynthia LummisIn the case of Cynthia Lummis, a Republican senator representing Wyoming, her fame as a major crypto proponent probably comes before her credentials as a digital asset investor. A hardline Republican, Lummis was at one point the only female member of the conservative Freedom Caucus. In her January 2021 disclosure, Lummis — a member of the Senate Banking, Housing and Urban Affairs Committee — registered the purchase of between $50,000 and $100,000 in Bitcoin. The Senator revealed that her overall holdings amounted to some 5 BTC.Lummis certainly puts her mouth where her money is. For one, she famously compared the U.S. to Venezuela in terms of inflation, and she has stated she wants to launch a financial innovation caucus that would aim to “educate members of the U.S. Senate and their staffs about Bitcoin, its advantages, and why it is just such a fabulous asset to dovetail with the U.S. dollar.” Around Christmas 2021, Lummis revealed she was drafting a comprehensive bill that she plans to introduce sometime in 2022. In a tweet, Lummis asked voters to contact their senators to support the bill, stating that she was seeking bipartisan cosponsors. Pat ToomeyRepublican Senator Pat Toomey of Pennsylvania can be called the arch enemy of government spending (with a peculiar exception for charter school funding), having once proposed a budget plan with a $2.2 trillion tax cut. He also happens to be a strong supporter of banking deregulation. During the past year, Toomey emerged as one of the main public supporters of crypto in Washington. He criticized Senator Sherrod Brown’s plan to give up crypto regulation to executive agencies and urged Treasury Secretary Janet Yellen to clarify the language in the infrastructure bill around the tax reporting requirements for crypto. In December 2021, Toomey came up with his own set of regulatory principles, released ahead of a congressional hearing on stablecoins. In June 2021, he bought between $2,000 and $30,000 in shares of Grayscale’s Bitcoin and Ethereum trusts.Will the trend continue in 2022?The list of publicly crypto-friendly lawmakers grew significantly last year, and although not every hodler on the Hill dared to reinforce their investment with symmetric political statements, it is an important trend for the industry. As Chris Kline, co-founder and chief operating officer of cryptocurrency retirement investment provider Bitcoin IRA, told Cointelegraph:As more representatives invest in cryptocurrencies, I think lawmakers will begin to understand digital assets on a deeper level, leading to a more informed and detailed crypto policy that will benefit investors on every level.Eric Bleeker, analyst and general manager at investment firm The Motley Fool, also stressed the importance of the knowledge-enhancement side of lawmakers’ crypto exposure:You definitely have to view those investments as beneficial for the industry. Did Visa receive worse legislation after Nancy Pelosi invested in its IPO? At the end of the day, crypto can be seen as a ‘threat’ by governments — we’ve already seen it outlawed in China. Having legislators own it adds to knowledge of the industry.Kline also believes that the growing number of politicians invested in crypto will inevitably convert to active support, both verbal and legislative. With new concepts like the Metaverse, nonfungible tokens (NFTs) and digital banking steadily conquering the attention of society, there is no reason for society’s representatives to not follow these trends.In Kline’s opinion, this will require legislators’ understanding of the deep complexities and nuances of cryptocurrencies and blockchain: “I see 2022 as the year legislators consider the potential of digital assets and another step in their widespread adoption.”Bleeker expects more U.S. legislators to get into the crypto game in 2022 for a simple reason: “Right now, they’re tremendously underinvested.” Bleeker noted that as of 2018, the median net worth of congresspeople was $1 million, with 10 senators having a net worth of over $30 million. It’s true that some legislators may avoid crypto for political reasons, but just by looking at the numbers, more crypto ownership from lawmakers can be expected from a pure portfolio diversification standpoint.The hope is that more investment in crypto by lawmakers will come with better understanding of this asset class and more political support.

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Law Decoded: First-mover advantage in a CBDC conversation, Jan. 10–17

Last week saw an unlikely first move in the opening narrative battle around a prospective U.S. central bank digital currency: Congressperson Tom Emmer came forward with an initiative to legally restrict the Federal Reserve’s capacity to issue a retail CBDC and take on the role of a retail bank. This could be massively consequential as we are yet to see a similarly sharp-cut expression of an opposing stance. As a matter of fact, it is not even clear whether other U.S. lawmakers have strong opinions on the matter other than, perhaps, condemning privately issued stablecoins as a digital alternative to the dollar. By framing a potential Fed CBDC as a privacy threat first, Emmer could tilt the conversation in the direction that is friendly to less centralized designs of digital money.Below is the concise version of the latest “Law Decoded” newsletter. For the full breakdown of policy developments over the last week, register for the full newsletter below.U.S. representative vs. U.S. CBDCThe tension between decentralized digital money and state-issued CBDCs is at the heart of the ongoing global shift toward digital payment rails. Last week marked the first-ever instance of a sitting U.S. member of Congress taking a formal stance against the Federal Reserve’s potential retail CBDC move.Sovereign digital fiat will undoubtedly be more convenient than its analog predecessor, yet the privacy costs of such convenience might be enormous. If all money is CBDC, the government’s financial surveillance capacity will become virtually unlimited, denying people the anonymity that cash transactions once afforded. Representative Emmer cited these privacy concerns as a rationale for introducing the bill that would ban the Fed from issuing a CBDC directly to consumers and acting as a retail bank.While it may take a long time before Emmer’s initiative reaches the House floor, the mere articulation of such a position by a member of Congress can have a significant impact on the course of the policy conversation around a potential CBDC. This is especially true in the light of some top Fed officials’ stated willingness to defer to Congress on the issue.Another ban scare, another El SalvadorElsewhere in the world, the signals that various regulators have been sending over the past week ran the gamut from potentially banning crypto transactions in Pakistan to considering the replication of El Salvador’s Bitcoin-as-legal-tender move in Tonga. Pakistan’s drive toward a blanket ban follows a familiar scenario where it is the nation’s central bank that is actively committed to outlawing crypto transactions and penalizing crypto exchanges. The task of determining the legal status of cryptocurrencies fell to the High Court of the province of Sindh, yet the judges refrained from making the final call and passed the issue on to the specialized government ministries. On the opposite side of the regulatory spectrum, the island nation of Tonga could be embarking on the Bitcoin adoption trail soon. An announcement by Lord Fusitu’a, a former member of the Tongan parliament and chairman of several regional interparliamentary groups, suggested that the country could make Bitcoin legal tender as soon as late 2022. Given Tongans’ heavy reliance on remittances, replicating El Salvador’s move almost identically seems logical.IMF sees the demise of crypto’s hedge roleAmong many risk factors that analysts ascribed to digital assets over the years, the financial stability risk that stems from crypto’s growing correlation with equity markets comes across as a novel talking point. Yet this is what a group of the International Monetary Fund researchers concluded upon examining the dynamics of Bitcoin to S&P 500 index correlation. The authors argued that the growing interconnectedness between the two asset classes defeats crypto’s hedge function, as it no longer serves to diversify investors’ risks. The IMF analysts’ conclusions come down to a reasonable notion that there should be a global, coordinated approach to crypto regulation.

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Pakistan's president calls for more training in blockchain technology

Arif Alvi, currently serving as the president of Pakistan, called for additional training in emerging technologies including blockchain, artificial intelligence, and cybersecurity while meeting with a delegation of blockchain technology experts.In a Monday announcement, Alvi said Pakistan’s talent pool should be ready to meet the needs of the Fourth Industrial Revolution, which included utilizing blockchain technology in the public and private sectors. According to the Pakistan president, the technology could be used as a government tool to track transactions, reduce corruption, and increase transparency. Among the panel of experts was Bitcoin SV advocate Jimmy Nguyen, founding president of the Bitcoin Association.President Dr. Arif Alvi had a meeting with an international delegation of blockchain experts, led by the Founding President of BSV Blockchain Association, Mr. James Nguyen, that called on him, at Aiwan-e-Sadr. pic.twitter.com/G4m4fRpJJy— The President of Pakistan (@PresOfPakistan) January 17, 2022The meeting came shortly before the Pakistan president announced he would be appointing Noor Muhammad Dummar as the senior minister of finance for the country’s Balochistan province. Pakistan’s federal ministries of finance and law have not legislated on a potential blanket ban of cryptocurrencies in the country, but the State Bank of Pakistan has reportedly argued cryptocurrencies like Bitcoin (BTC) are illegal and cannot be used for trading.A report released by crypto analytics firm Chainalysis in October 2021 showed that Pakistan had the third highest rate of crypto adoption behind Vietnam and India, with transfers of more than $10 million in the country representing 28% of transactions. The country’s central bank also said in 2021 it was studying the possible rollout of a Pakistan central bank digital currency. Related: Pakistanis have $20B in crypto assets, says head of local associationHowever, some officials within Pakistan seem to continue to associate digital assets with fraud following a multi-million dollar crypto scam in which investors were misled into sending funds from Binance wallets to unknown third-party wallets — some reports suggest investors lost as much as $100 million. The Pakistan Telecommunication Authority has also reportedly blocked websites dealing in cryptocurrencies in an effort to prevent fraud and money laundering.

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Bitfinex advises Ontario-based users to close accounts before March 1

In a Friday announcement, Bitfinex said it would be immediately closing the accounts for Ontario-based customers who have no balances on the platform. In addition, it planned to restrict access to those who do not have open positions in the exchange’s peer-to-peer financing market or open margin positions. Users who have balances or open positions on Bitfinex and are one of the roughly 15 million residents of Ontario — which includes Toronto and the nation’s capital city of Ottawa — “will no longer have access to any services” starting on March 1. The exchange advised customers to withdraw funds before the effective date.Though Bitfinex did not mention the Ontario Securities Commission, or OSC, the region’s financial watchdog has been responsible for cracking down on crypto exchanges operating in the area, including OKEx, Bybit, KuCoin and Polo Digital Assets. In December, the OSC issued a notice that Binance was not authorized “to offer trading in derivatives or securities to persons or companies located in the province” after the crypto exchange reportedly told its users it would be able to continue offering services in the region. Binance reportedly said there was a miscommunication on the issue.Related: Amid ongoing legal proceedings, Bitfinex announces Tether loan repaymentBitfinex has also been the target of U.S. regulators. In October, the Commodity Futures Trading Commission fined the crypto exchange and its sister company Tether $42.5 million, with Bitfinex allegedly facilitating “illegal, off-exchange retail commodity transactions in digital assets with U.S persons.” The Office of the New York Attorney General previously ordered the two firms to pay $18.5 million in damages and submit to periodically reporting on their reserves.Crypto exchange Bitfinex has announced users based in the Canadian province of Ontario will no longer have access to many of its services starting on March 1.

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Pakistan’s central bank reportedly wants to ban crypto

The State Bank of Pakistan (SBP) is reportedly seeking to ban all cryptocurrency transactions in Pakistan.Pakistan’s Sindh High Court reportedly held a hearing related to the legal status of cryptocurrencies in the country, in which several Pakistani authorities, including the SBP, submitted a document to the court, arguing that cryptocurrencies like Bitcoin (BTC) are illegal and cannot be used for trade. According to local news channel Samaa TV, the document cited at least 11 countries, including China and Saudi Arabia, that have opted to ban cryptocurrencies. The Pakistani central bank reportedly urged the court not only to ban cryptocurrency activity but also to impose penalties against crypto exchanges.The SBP also referred to several investigations against crypto exchanges by the Federal Investigation Agency (FIA), citing investor protection risks as well as money laundering and terrorism concerns. As previously reported, the FIA started a criminal investigation against Binance, the world’s largest crypto exchange, in early January, alleging a possible linkage to a multi-million-dollar crypto scam in the region.Despite the SBP recommending a blanket ban on crypto, the Sindh High Court has not ordered a ban on crypto transactions in Pakistan just yet. Instead, the court has ordered that the bank’s appeal be sent to the finance and law ministries, which will make a final determination on the legal status of cryptocurrencies in the country and ascertain whether a crypto ban would be constitutional.The news comes years after the SBP issued an initial prohibition on dealing in digital currencies and tokens back in April 2018. At the time, the central bank argued that cryptocurrencies such as Bitcoin or initial coin offerings were not legal tender and were not “issued or guaranteed by the government of Pakistan.”SBP did not immediately respond to Cointelegraph’s request for comment. This article will be updated pending new information.Related: The number of countries banning crypto has doubled in three yearsThe latest moves by the Pakistani government echo similar events developing in many countries, including India and Russia, where the central banks are trying hard to ban crypto, while other parts of the government are not necessarily inclined to such a ban. In 2020, India’s ​​central bank had to lift its ban on banks’ dealings with crypto-related firms in accordance with an order by the country’s Supreme Court.

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Law Decoded: Looking ahead to 2022, Jan. 3–10

As Alex Tapscott put it, 2021 was the year when many governments and lawmakers began to finally wake up to the transformational potential of blockchain technology. Indeed, crypto’s global mainstreaming and growing market capitalization have made it difficult for the agents of power to ignore it and have rendered it a salient economic, social and political issue across many key jurisdictions. By all appearances, we are in for a busy year in crypto regulation and policymaking.Stablecoins, an asset class that attracted a fair amount of regulatory attention in 2021, will surely remain in the hot seat this year. For most nations, stable-value crypto assets will represent competition to their sovereign digital currencies. For the United States, a key question is whether Congress will come forward with the legislation around stablecoins that the President’s Working Group on Financial Markets is calling for.It will also be exciting to watch how far the crypto industry’s political mobilization and lobbying efforts — something that became a prominent feature of the crypto policy landscape in 2021 — will be able to reach this year. A major test of the sector’s newfound political clout will be the struggle to amend the crypto-related provisions of the recently passed infrastructure bill.Many industry experts surveyed by Cointelegraph expect major policy advancements to come from the European Union in 2022. The European Commission is currently reviewing the proposed Markets in Crypto-Assets regulation, a wide-reaching framework that is mainly focused on mitigating consumer and financial stability risks associated with the adoption of digital assets. Combined with digital euro trials being well underway, this suggests that the EU could soon articulate its stances on various interconnected parts of the digital asset ecosystem — CBDCs, private stablecoins and decentralized cryptocurrencies — in a more definitive fashion.Elsewhere in the world, El Salvador maintains the perception that it is all in on Bitcoin (BTC) as a nation-state. One of many points of contention related to this great experiment has been, and will continue to be, the Central American nation’s spat with global financial organizations such as the International Monetary Fund. Speaking of the global watchdogs, it is reasonable to expect that these guardians of the incumbent financial order will start delving deeper into specific sectors of the crypto space, much like the Bank of International Settlements’ recent foray into decentralized finance. The hope is that the resulting alarmist narrative will not become global regulators’ dominant approach to the sprawling domain of DeFi.The first days of 2022 also brought a reminder that regulatory clarity is not the only way in which politics can massively affect the crypto space. Following days of civil unrest in Kazakhstan — a nation that had climbed to the No. 2 spot in the world’s Bitcoin hash rate rankings following China’s mining ban — the government’s decision to cut off the entire population’s internet access resulted in an unprecedented hash rate drop on the Bitcoin network. The geopolitics of BTC mining, which came into motion last year with China’s abrupt exit, seem poised to continue on the path of volatility.All in all, this year is shaping up to be a rollercoaster of Bitcoin politics, crypto regulation and digital currency adoption.  Let’s buckle up and see what else 2022 has in store.

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Spanish lawmaker sees opportunity amid Kazakhstan’s Bitcoin mining collapse

Deputy for the Spanish Ciudadanos political party María Muñoz has proposed a bill to make Spain a Bitcoin mining hotspot following the internet shutdown that caused a mining outage in Kazakhstan.The lawyer and economist Muñoz was steadfast in her support of Spain as a Bitcoin (BTC) destination, in a tweet on Friday: “The protests in Kazakhstan have repercussions all around the world but also for Bitcoin. We propose that Spain positions itself as a safe destination for investments in cryptocurrencies to develop a flexible, efficient and safe sector.”A two-page open letter accompanied the tweet directed at the Spanish Congress of Deputies. First, Muñoz highlighted the significance of the protests and the government’s response which used “all the strength of the police and the army,” before the government switched off the internet to the largest Central Asian economy. She cited a Cambridge Centre for Alternative Finance study that put Kazakhstan as the second-largest Bitcoin miner worldwide, contributing an estimated 20% of the hash rate in the second half of 2021. The government’s decision to effectively pull the rug out from under Kazakhstan’s Bitcoin miners caused the hash rate to plummet a reported 13.4%.These events inspired pertinent questions for the pro-Bitcoin lawmaker:What information does the Spanish government have on the impact of the Kazakhstan internet blackout on the Spanish crypto mining industry? Will the government take measures to attract investors and miners fleeing the Kazakhstan mining industry? What data does the government have regarding the energy efficiency of Bitcoin and the growth of the mining industry?A proven proponent for the Bitcoin network, her party Ciudadanos, or “Citizens,” proposed a national strategy on cryptocurrencies in October last year. Her party seeks to position Spain as a pole for investments into cryptocurrencies from the European Union and the world — and Bitcoin mining could be the catalyst. As Bitcoin hash rate fluctuations have shown time and again, mining infrastructure is not geographically restricted. China’s mining ban, for example, was to the benefit of Kazakhstan and Kosovo. Alan Konevsky, chief legal officer at PrimeBlock, explained last year’s mining changes to Cointelegraph: “Mining companies including those that relocated after the China regulatory changes, set up in countries like Kazakhstan and Kosovo because the cost of electricity is much cheaper than in North America.”This was shown in Kazakhstan’s growing hash rate in 2021. However, in a premonition to what could take place in Spain, Konevsky goes on to explain: “If mining becomes a complete non-starter in these countries, we could see miners relocate. This industry is mobile, to a point — but as it matures it requires stability, including stable political climate and stable inputs, including energy.”Muñoz hopes that Spain harbors these Bitcoin-friendly factors. However, one of BTC’s biggest headwinds may be political. Her tweet inspired ridicule from rival Green party member Ernest Urtasun, a European Parliament member. Labeling her proposal a “bad joke” in a tweet, he said BTC mining is “an environmental aberration.” Muñoz and her Citizens party clearly have their work cut out.

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Dapper Labs becomes the first NFT company to register to lobby with the US government

Based in Vancouver, Dapper Labs offers a variety of nonfungible token (NFT)-based products and DApps. These include games like CryptoKitties, where players can breed and raise NFT kittens, and Cheeze Wizards, a tournament series where collectible characters can duel each other. Additionally, Dapper Labs is partnered with the NBA and is responsible for Top Shot, an NFT marketplace that sells highlights from basketball games. The UFC has also partnered with Dapper Labs to offer a similar service in the near future. According to the announcement, Dapper Labs has recruited Crossroads Strategies as their lobbying firm. The company reported that it would lobby for “Policy related to NFTs, blockchain and financial services.” Aside from recruiting a lobbying firm, Dapper Labs also recruited Alison Kutler as its new head of government affairs back in November 2021. Kutler is the former chief of the Consumer and Governmental Affairs Bureau and special advisor to the chairman of the FCC from June 2015 to Apr 2017.Kutler has also since registered to lobby on behalf of Dapper Labs, according to public disclosures posted the day after Dapper Labs’ official registration on Tuesday, January 4, 2022.Dapper Labs didn’t reveal much in terms of its intentions but did say that it wants to promote “education and mainstream adoption of Web3,” according to their spokesperson Rachel Rogers.With NFTs becoming more involved in mainstream culture, lobbyists are optimistic about future policies. Regardless, both lobbyists and policymakers alike will have to continue grappling with the implications of blockchain technology on future regulations.Through a public disclosure on Jan. 3, 2022, Dapper Labs became the first NFT company to federally register to lobby with the U.S. government. This is currently playing out as multiple names from within the crypto industry are stepping onto the floors of Congress to explain the new technology and, hopefully, influence new policies. 

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El Salvador: How it started vs. how it's going with the Bitcoin Law in 2021

Before June 2021, news regarding Nayib Bukele was likely not even a blip on many crypto users’ radar screens. The Salvadoran president instead made headlines for allegations of corruption and dictator-like behavior after his party’s congressional majority sacked five members of the country’s Supreme Court and its attorney general.During the Bitcoin 2021 conference in Miami, however, Bukele stunned many participants and garnered international attention by announcing he planned to have El Salvador adopt Bitcoin (BTC) as legal tender. Within a week, a supermajority of the Salvadoran Legislative Assembly — most members of Bukele’s own party — had passed the Bitcoin Law, requiring all businesses to accept the crypto asset as a form of payment alongside the United States dollar. Bukele’s involvement in the crypto rollout seemed to extend further than many would have expected from a world leader. The Salvadoran president was already active on social media and presented himself differently than many politicians, often casually dressed in a baseball cap and jeans. Since the Bitcoin Law went into effect in September, he has used his Twitter account to announce several BTC buys totaling 1,391 BTC — more than $71 million, presumably from El Salvador’s national treasury. He also proposed having the country tap geothermal energy from its volcanoes to mine crypto.Locally, opposition to the Bitcoin Law manifested itself in the form of public statements from lawmakers not connected to Bukele’s political party as well as protests in San Salvador. Before the law went into effect on Sept. 7, a group of retirees, veterans, disability pensioners and workers marched through the capital city to voice their concerns about the crypto asset’s volatility and how the Bitcoin Law could potentially affect their pensions. Protesters calling themselves the Popular Resistance and Rebellion Block carried banners saying “No to Bitcoin” in the streets to demand a repeal of the law. Servicio social. Para los que quieran imprimir stickers de #NoAlBitcoin aquí les dejo vectores en SVG e imágenes en alta resolución. El vector de la derecha es para corte en Vinil.Me mandan foto de donde los peguen porfa. Descargas https://t.co/jNrBlW33ox pic.twitter.com/693Esr42ri— Señor del Caos (α) (@mxgxw_alpha) August 15, 2021Officials outside Bukele’s sphere of influence also expressed skepticism over the rollout. In June, the U.S. Department of State’s Victoria Nuland encouraged El Salvador to take a “tough look” at Bitcoin to ensure the crypto asset was “well regulated” and “transparent,” and the government offered protection “against malign actors.” The International Monetary Fund issued its own warning in July, saying the consequences of a country adopting Bitcoin as a national currency “could be dire.”In addition to helping establish the regulatory framework for adopting BTC payments, Bukele promoted efforts to build the infrastructure necessary for Salvadoran merchants and everyday citizens to use crypto. The country is already home to Bitcoin Beach, an area in the village of El Zonte, intended to be an experiment where Bitcoiners can use crypto to pay for anything, from utility bills to tacos. Officials have also overseen the installation of hundreds of Chivo ATMs, allowing Salvadorans to withdraw cash 24 hours a day without paying commissions on their crypto holdings. However, one announcement that will likely stand out as the most ambitious of Bukele’s crypto plans in 2021 was for the creation of Bitcoin City, funded initially by $1 billion in BTC bonds. Crypto exchange Bitfinex and Blockstream have already said they plan to support the initiative, which will reportedly aim for no capital gains, income, property or payroll taxes.Be on Mars by 2032 gonna be amazing, but the future is being built also here on earth, in El Salvador to be specific. #Bitcoin City. pic.twitter.com/PGhJQ9FlrG— Jose Valdez (@JoseValdezSV) December 10, 2021

The criticism over Bukele governing like an authoritarian was necessarily been mitigated with the Bitcoin Law rollout, but coverage wa often paired with his statements on “buying the dip,” proposing a 24-hour Bitcoin news network, and other crypto-related developments in the country. There is little indication that the president has moved past self-identifying as the world’s “coolest dictator” — a Twitter bio that he later changed to the “CEO of El Salvador.” Prior to the passage of the Bitcoin Law, police detained a San Salvador resident who had spoken out against the country adopting Bitcoin as legal tender. In October, following several protests against Bukele’s policies, the government banned gatherings, claiming its actions were aimed at preventing the spread of COVID-19 — however, it still listed sports and cultural events as exemptions.“The crypto community embracing Bukele of all people shows that they need to think a little harder. […] This guy’s an authoritarian who can’t provide basic services to his citizens,” said Tommy Vietor, a political commentator from Pod Save the World. “[El Salvador has] one of the highest murder rates in the world. He seems to think you can get power by plugging your Apple charger into a volcano somehow. Don’t try to sell us on a literal volcano-fueled tech utopia city — let’s just start a little smaller.”At the end of 2021, it was still unclear whether the average citizen of El Salvador was reaping many rewards from the Bitcoin Law. Bukele did announce in October that animals would benefit from crypto with the construction of a $4-million veterinary hospital funded by profits from the country’s Bitcoin trust. However, it’s likely the Latin American nation is still struggling to cope with the crypto asset’s volatility when used as a medium of exchange as well as gaining mainstream understanding and acceptance from its populace. 

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How the Democratic Party didn’t stop worrying and fearing crypto in 2021

As 2022 is kicking off, America nears the first anniversary of Joe Biden’s presidency. Following the tenure’s ambitious start, the last few months witnessed some serious tumult around the overall health of the United States economy, the administration’s handling of the COVID-19 pandemic, and the tense debate around Biden’s opus magnum — the $1.7 trillion Build Back Better infrastructure legislation plan.But even as the Democrats’ ability to maintain undivided power after the 2022 midterm elections can raise doubts, the party’s prevailing view of crypto has become more consolidated than ever. The incumbent president’s party will be setting the tone of the regulatory discussion for at least three more years, so a thorough look at the fundamental premises and potential directions of its emerging crypto stance is in order.The narrative arcThe path that mainstream Democrat thinking on crypto has traveled over the last three years is perfectly captured by an anecdote featuring two crypto-related public statements made by a Clinton. One is by the 42nd U.S. president, Bill Clinton, then 72, who said at Ripple’s Swell Conference in October 2018 that the “permutations and possibilities” of blockchain were “staggeringly great”. Three years later, speaking at the Bloomberg New Economy Forum in Singapore, Bill’s wife and ex-presidential candidate Hillary Clinton, though calling the cryptocurrencies an “interesting” technology, warned about their power to undermine the U.S. dollar and destabilize nations — “perhaps starting with small ones but going much larger.”This startling difference in opinion within the power couple reflects the recent evolution of the Democratic party, itself — from a “third way,” business, tech and finance-friendly centrism of its 1990’s generation to the newfound statism with a heavy emphasis on redistributional justice and big government projects. By current standards, the former first lady sounded rather balanced in comparison to her party comrade Senator Elizabeth Warren, who has famously lashed out at the crypto market after the volatility outburst in early September: Advocates say crypto markets are all about financial inclusion, but the people who are most economically vulnerable are the ones who are most likely to have to withdraw their money the fastest when the market drops. […] High, unpredictable fees can make crypto trading really dangerous for people who aren’t rich.Warren berated crypto on numerous occasions, calling it a “fourth-rate alternative to real currency” that is “unsuitable as a medium of exchange;” a “lousy investment,” that “has no consumer protection;” and a tool that makes many illegal activities easier.Beyond Senator WarrenThe negative sentiment is largely shared by Senator Sherrod Brown, which is arguably even more unsettling given his status as chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs. Brown’s opening statements at Congress hearings have never been amicable towards crypto. Their overall spirit can be summarized in the introduction that opened the July hearing entitled “Cryptocurrencies: What are they good for?”All of these currencies have one thing in common — they’re not real dollars, they’re not backed by the full faith and credit of the United States. […] And that means they all put Americans’ hard-earned money at risk.Brown blamed the “cottage industry of decentralized financial schemes” for an attempt to create “a parallel financial system with no rules, no oversight, and no limits,” calling it “a shady, diffuse network of online funny money,” with nothing democratic or transparent about it. The lawmaker repeatedly rejected the notion that crypto could be an alternative to legacy money — last time at a December Congress hearing:Stablecoins and crypto markets aren’t actually an alternative to our banking system. […] They’re a mirror of the same broken system – with even less accountability, and no rules at all.It’s not all dark, though. One figure that represents a more moderate, if not pragmatic approach to crypto — Congresswoman Maxime Waters — would also play a major role in any future outcome for the industry. As a chairwoman of the House Committee on Financial Services, she initiated the Digital Assets Working Group of Democratic Members with a mission to ensure responsible innovation in the cryptocurrency and digital asset space and “meet with leading regulators, advocates, and other experts on how these novel products and services are reshaping our financial system.”Related: Lines in the sand: US Congress is bringing partisan politics to cryptoSen. Waters has publicly recognized that “Americans are increasingly making financial decisions using digital assets every day,” and affirmed that her Committee will explore “the promise of digital assets in providing faster payments, instantaneous settlements and lower transaction fees for remittances.” What’s it all about?The good news is that underneath the redoubtable oratory, there is a keyword: regulation. It is clear, at this point, that a China-style total war on crypto isn’t an option in the U.S. Therefore, what drives the heated activity of congressional committees and federal agencies in recent months is a clear intention of the Democratic establishment to sort out the rules of the game before the next presidential election. Part of this effort of the Biden administration is the launch of the President’s Working Group on Financial Markets, a superhero team composed of the SEC, CFTC, OCC, FDIC and Federal Reserve System executives, with the secretary of the Treasury Department leading the group. So far, the key product of the Working Group is a 26-page report on stablecoins, which advises Congress to designate some stablecoin-related activities — such as payment, clearing and settlement — as “systemically important” (which would inevitably lead to a tighter oversight) and limit stablecoin issuance to insured depository institutions, i.e., banks.As in the pre-Biden era, the main problem lies with the core classification of digital assets. The PWG report failed to propose a novel interpretation and give precedence to a single regulatory body, thus perpetuating a situation where a variety of regulators oversee different types of crypto-related activity.In October, Rostin Behnam, the chairman of the Commodity Futures Trading Commission and a member of the Democratic Party, claimed that as much as 60% of digital assets can be classified as commodities, which amounts to proposing that the agency become the lead U.S. cryptocurrency regulator. He also further stated that his agency, as well as the Securities and Exchange Commission, would likely need “a regulatory structure for both securities and commodities.” How exactly that would help the ongoing patchwork approach to regulation is still a mystery. The Democratic causeThere are several reasons to believe that the largely proclamatory activity of 2021 will be followed up by some real action in the following year. The first is the general idealistic mindset of U.S. Democrats. For example, the drive to aggressively regulate Big Tech is part and parcel of this mindset. While President Barack Obama and some regulators worked alongside Google and Twitter to facilitate the growth of internet businesses, Joe Biden’s administration came to power amid the wave of popular anxiety over international cyberattacks, personal data leaks, Meta’s crisis mismanagement and the overall outsize influence on the political process accumulated by tech goliaths. While Meta and Google have been fighting federal and state regulators in courts over allegations of anticompetitive conduct for a while, Biden’s team also pledged to hold tech companies to account for toxic speech they host and strengthen policing anti-competitive practices. However, in 2021, we haven’t witnessed any significant policy steps in this direction. Neither of the two major legislative proposals — Amy Klobuchar’s bill, which ​​would bar big tech platforms from favoring their own products and services, and a bill by House Democrats that seeks to remove some protections afforded tech companies by Section 230 of the Communication Decency Act — has become law. The second reason behind the Democratic rush to put crypto within the regulatory perimeter is pragmatic: The Biden administration and its allies on Capitol Hill need money. Biden’s first-term agenda relies heavily on ambitious Roosveltian infrastructure projects. While the $1.2 trillion Infrastructure Investment and Jobs Act managed to get bipartisan support and was signed into law on November 5, the Build Back Better Act, which now hangs by a thread after Democratic Sen. Joe Manchin had announced his opposition to the current draft, would cost nearly $2 trillion. By some estimates, should it make it to the president’s desk, the spending program would increase the deficit by $360 billion over 10 years, making it urgent to raise more tax revenue. This is what makes a thriving crypto industry an important battlefield for Democrats, who see the possibility of harvesting some cash from it and an urgency to prevent tax evasion via digital tools. What’s next?There’s no doubt that the Biden administration will continue to pursue a strict regulatory agenda in 2022. We will see more Congressional hearings next year, but even more consequential negotiations will be taking place behind closed doors, where Democrats will have to finally decide whether the SEC, CFTC or any other body should dominate crypto oversight. Despite Sharrod Brown’s recent “with or without Congress” remarks, it is also hard to believe that Republicans will let their opponents single-handedly decide the fate of the industry.

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Crypto makes history in 2021: Five instances of governments embracing digital assets

As digital asset prices had been hitting new historical highs in 2021, many jurisdictions were increasingly adopting cryptocurrencies like Bitcoin (BTC) and other crypto-based instruments.In addition to Bitcoin crossing $68,000 for the first time since inception, the year of 2021 will be remembered for Bitcoin’s historical adoption as legal tender in El Salvador. The world’s first-ever Bitcoin exchange-traded fund (ETF) was also inaugurated in 2021, alongside many other benign regulatory developments around the world.As we glance back at notable global regulatory moments in 2021, Cointelegraph has picked some of the most memorable instances of friendly crypto regulation.1. El Salvador: The first country in the world to adopt Bitcoin as legal tenderThe Republic of El Salvador, the smallest nation in Central America, officially adopted Bitcoin as legal tender on Sept. 7, 2021, becoming the world’s first country to do so. Bitcoin was trading at around $47,000 on the day of Bitcoin’s official adoption in the country.El Salvador’s bold Bitcoin move took several months to materialize as president Nayib Bukele had first introduced the “Bitcoin Law,” laying the groundwork for BTC’s usage as an official payment method alongside the United States dollar in June 2021. The Salvadoran Legislative Assembly subsequently passed the law, which amassed a supermajority of 62 out of 84 votes.Known as the “Land of Volcanoes,” El Salvador also moved to deploy its volcanic activity to generate new Bitcoin. In September, president Bukele teased a Bitcoin mining plant powered by volcanic geothermal energy in El Salvador, marking a major case for cutting BTC’s carbon footprint. Soon after, Bukele upped the stakes even further when he announced plans to establish an entire Bitcoin city, funded by BTC bonds.While the crypto community celebrated El Salvador’s BTC drive, global financial authorities like the International Monetary Fund have expressed skepticism about the government’s move into crypto.Related: El Salvador buys 21 Bitcoin to celebrate Dec. 21, 2021Some people in El Salvador were also unhappy with the Bitcoin Law, with some protesting against Bitcoin adoption due to concerns over its unstable price. Some of the protests even resulted in destroyed Bitcoin ATMs.2. The United Arab Emirates: CZ’s new homeThe UAE emerged as one the most crypto-friendly countries in 2021 as authorities in its capital city of Dubai have been ramping up the efforts to enable the crypto industry’s development.In January, the Dubai Financial Services Authority (DFSA) announced plans to establish a comprehensive crypto regulatory framework as part of its 2021 business plan. The DFSA subsequently issued several regulatory approvals, including one for a major Canadian investment product, The Bitcoin Fund, in October. DFSA has also been working on regulations for investment vehicles like security and derivative tokens.UAE regulators also came up with multiple arrangements to officially allow and support crypto trading in several free economic zones in Dubai. The nation has also been making strides in nonfungible tokens (NFT) adoption as its postal operator issued NFTs in November to commemorate the federation’s 50th National Day.In late 2021, the Dubai World Trade Centre Authority said it will become a comprehensive zone and regulator of cryptocurrencies, products, operators and exchanges.Related: Binance joins fresh crypto hub by Dubai World Trade CentreThe UAE is becoming an attractive destination for some of the world’s largest cryptocurrency companies and industry figures. In October, Binance CEO Changpeng Zhao reportedly bought his first home in the “very pro-crypto” Dubai. The Chinese-Canadian business executive had previously claimed that he did not own any real estate as of April 2021. pic.twitter.com/QrgxaHKAp9— CZ Binance (@cz_binance) December 21, 20213. Canada: Crushing the global Bitcoin ETF raceCanada has earned a place on the list of 2021’s most crypto-friendly countries the moment its main securities regulator cleared the takeoff of the world’s first physically-settled Bitcoin ETF at the beginning of the year.Launched by Canadian investment firm Purpose Investments in mid-February, the Purpose Bitcoin ETF saw an explosive debut with $564 million in assets under management in just five days after starting trading.Canada continued leading the global Bitcoin ETF race as Fidelity Canada launched its Fidelity Advantage Bitcoin ETF and the eponymous mutual Bitcoin ETF fund in December. Canada’s Bitcoin ETFs aren’t just available for retail investors but also provide significant benefits for those who open government-registered investment accounts, such as the Tax-Free Savings Accounts.Related: Crypto poses no big risk to economy so far, Bank of Canada official saysOn top of crypto ETF dominance, Canada has been working to introduce more clarity to its crypto regulations in recent years, officially recognizing crypto firms as money service businesses in 2020. In late 2021, Canada’s Financial Transactions and Reports Analysis Centre of Canada issued registration for Binance’s local subsidiary, Binance Canada Capital Market. Canada is ranked the fourth largest country in terms of Bitcoin mining power, accounting for 9.6% of the total global hash rate, according to data from the Cambridge Bitcoin Electricity Consumption Index.4. Singapore: Crypto is ‘investment in a prospective future,’ says regulatorSingapore continued to be one of the world’s biggest hubs for cryptocurrency exchanges and blockchain enterprises in 2021 as the country’s regulators have done a great deal to nurture the industry.In November, Singapore welcomed two new institutional-grade Bitcoin funds launched by Fintonia Group, a company regulated by the Monetary Authority of Singapore (MAS). Previously, MAS officially allowed companies like the Australian crypto exchange Independent Reserve and DBS Bank’s brokerage arm, DBS Vickers, to provide digital payment token services in the country.DBS Bank, Singapore’s largest retail and commercial bank, is one of the largest local companies to make a foray into the crypto industry in the past year. The firm posted tenfold crypto volume growth in Q1 2021 after launching its crypto trading platform, DBS Digital Exchange, in late 2020.Related: Singapore to position itself as a global crypto center, says regulatorSome companies with close ties to the government of Singapore are reportedly big fans of cryptocurrencies like Bitcoin. Robert Gutmann, CEO of New York Digital Investment Group, claimed in March that Singaporean government-backed holding company Temasek is a major Bitcoin investor.Singapore is also among the world’s top nations in terms of retail crypto adoption as 43% of Singaporeans own crypto, according to one survey.Despite local authorities welcoming the crypto industry development, a large number of crypto businesses have apparently failed to receive licenses to operate in Singapore in 2021.5. Gibraltar: New target for Huobi exchange after Chinese crackdownGibraltar, a British Overseas Territory and one of the smallest countries in the world, has been emerging as an attractive location for crypto in 2021.In November, Gibraltar welcomed Bullish, a new cryptocurrency exchange launched by the EOS.IO protocol developer, Block.one. The company’s local branch previously obtained a distributed ledger technology license from the Gibraltar Financial Services Commission (GFSC).In September, the GFSC also approved operations of Zubr Exchange Limited, a new local crypto exchange business launched by Sam Bankman-Fried’s crypto giant FTX.The government of Gibraltar has been strengthening its ties with global blockchain and crypto industry players. In March, Gibraltar’s minister for digital and financial services, Albert Isola, became an ambassador for the Global Blockchain Business Council, a major industry association.Related: Gibraltar’s government plans to bridge the gap between public and private sectors with blockchainSome of the world’s biggest crypto exchanges entered Gibraltar in 2021 amid growing support from regulators.Following approval from the GFSC, crypto exchange Huobi has reportedly been moving its spot trading operations to its Gibraltar-based affiliate following China’s cryptocurrency crackdown. According to the firm, Chinese operations made up at least 30% of its total trading volumes and revenues before the ban.Crypto-friendly jurisdictions of 2021: Honorable mentionsEl Salvador, the UAE, Canada, Singapore and Gibraltar are, of course, not the only countries that served examples of benign crypto regulation in 2021.Among other increasingly crypto-friendly jurisdictions is Australia, which has been actively moving to adopt new crypto regulations and became a major location for crypto-related ETF listings this year.Liechtenstein, the world’s richest nation per capita, was the country with the most comprehensive cryptocurrency tax policy for the second year in a row in 2021, as per a PwC report. Australia and Malta ranked second, followed by Germany.

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