Inside the Mnuchin Files

Examining the intersection of cryptocurrency and government

By Nikhilesh De

Managing Editor, Global Policy & Regulation

January 11, 2022

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Hey folks,

Welcome to State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. I’m your host, Nikhilesh De.

We FOIA’d former Treasury Secretary Steven Mnuchin’s emails. Here’s what we found.

—Nik

The Mnuchin files

Former Treasury Secretary Steven Mnuchin (Tasneem Alsultan/Bloomberg via Getty Images)

The narrative

CoinDesk filed a Freedom of Information Act (FOIA) request with the U.S. Treasury Department for former Treasury Secretary Steven Mnuchin’s crypto-related emails. We received 250 pages of emails that shed light on everything from the department’s response to sanctions concerns from other nations to who advocated for central bank digital currencies within the former administration. (Hint: He was related to the last president.)

Why it matters

FOIA requests are a powerful tool for helping to shed light on how policymakers are approaching questions of regulation. Today’s report by CoinDesk shows how the Treasury Department under former President Donald Trump broadly viewed crypto, with other interesting tidbits sprinkled throughout.

Breaking it down

I just want to highlight some key findings from our report. To me, the most significant finding was that Oleksandr Bornyakov, the deputy minister of digital transformation in Ukraine, reached out to the State and Treasury departments asking for help.

The Treasury Department’s Office of Foreign Asset Control issued sanctions on Russian individuals involved in the annexation of Crimea in 2020. A number of crypto exchanges, including Bittrex, Coinbase and Gemini, responded by pulling out of the entire country of Ukraine.

Bornyakov asked the U.S. officials to clarify the sanctions compliance requirements, noting that Ukraine itself was not under the same economic embargo as Crimea.

No one at Treasury returned his email.

That seems to be one common theme. A number of emails included in the FOIA response came from industry participants trying to provide or gain feedback about various issues, such as the FinCEN wallet proposal. Some of these emails were shunted to deputies or lower-level officials, while others did not receive a response at all.

I’d recommend reading the full article – six of us worked on this to make sure it’s as comprehensive as possible. We also made the full set of responsive documents available here. (CoinDesk redacted only some personal information like email addresses.)

We have a number of other outstanding public information requests. One of these is a Freedom of Information Law request to the New York Attorney General’s Office for documents about Tether’s reserves, provided to the investigative entity as part of its inquiry into the stablecoin issuer. Tether has petitioned a New York court to block the release of these documents. Last week, CoinDesk joined the legal case as an intervenor. You can read CoinDesk’s filings here.

Tether, for its part, believes the release of these documents will put it at a competitive disadvantage, and said in a public statement that the FOIL request is tied to CoinDesk’s parent company, Digital Currency Group, also being an investor in Circle, which issues the USDC stablecoin.

Developers of Atlas DEX Swap named the Mechanics of the Future team present the Insider Protocol project with the first HFT Bitcoin Bot, which combines different patterns in algorithms with implemented LAYERING trading technique used mostly by the financial sector.
Insider Protocol is one of the entire ecosystem projects, consisting of Atlas DEX Swap, Imperium Protocol blockchain, DEFI sector, and upcoming DEXCHANGE and NFT Platform.
Imperium Protocol blockchain is being developed based on MimbleWimble protocol with full anonymity. The testnet is available for public tests right now.
Besides going to Binance. Launchpad the team is also going to integrate part of their ecosystem with the Binance Smart Chain in Feb-Mar of 2022.

The Biden Bunch

Changing of the guard

Key: (nom.) = nominee, (rum.) = rumored, (act.) = acting, (inc.) = incumbent (no replacement anticipated)

Rostin Behnam was sworn in as chairman of the Commodity Futures Trading Commission last week, after nearly a year in the acting chairman role. The Senate confirmed Behnam in December. The regulator last year said he believes the CFTC could play a bigger role in overseeing the crypto spot markets, citing trading volume for bitcoin and ether on U.S. exchanges.

Elsewhere

The Inside Story of How India’s Crypto Exchanges Were ‘Inspected’ by Tax Agencies: Amitoj Singh spoke to government officials and industry sources about India’s investigation into whether crypto exchanges were paying their taxes properly, and into the just over $11 million in back taxes the government collected late last year.

A16z Publishes Web 3 Policy Proposal for World Leaders: Andreessen Horowitz (a16z) published a policy proposal for countries trying to build Web 3 frameworks. This comes in response to questions from world leaders, said a16z global head of policy Tomicah Tilleman, though he declined to name any specific ones.

A Message from Secretum

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New Year, New Money

New Money, a new series by CoinDesk, explores what it means to be part of the new “creator economy.” In the talk show hosted by Spencer Dinwiddie and Solo Ceesay, we hear from pro athletes, celebrities and social media influencers who are on the cutting edge of interacting directly with fans and developing new ways to generate revenue from their own celebrity. Learn more here.

Beyond CoinDesk

(Bloomberg) PayPal is looking into whether it should launch its own stablecoin, Bloomberg reports, citing PayPal Senior VP Jose Fernandez da Ponte. PayPal hasn’t committed to launching a stablecoin, though.

(TechDirt) A federal court has ordered Twitter to identify the user behind an anonymous Twitter account. The account “tweeted out various things mocking and shaming various extremely wealthy people,” TechDirt reports.

Today’s Tweet

If you’ve got thoughts or questions on what I should discuss next week, or any other feedback you’d like to share, feel free to email me or find me on Twitter.

You can also join the group conversation on Telegram.

See y’all next week!

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