Welcome to State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. I’m your host, Nikhilesh De. Attorneys for Sam Bankman-Fried filed their response to the U.S. Department of Justice in their ongoing effort to appeal his conviction before the Second Circuit. Friday's filing continued the defense team's efforts to convince the appeals court panel that Judge Lewis Kaplan was biased against the defendant.
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Welcome to Amberdata’s End-of-Year Report for 2024—a period marked by notable growth and maturation across the crypto asset spectrum. Over the past twelve months, Bitcoin, Ethereum, and a variety of stablecoins each underwent significant shifts in ownership patterns, on-chain activity, and overall market structure. Institutional engagement deepened as whales selectively re-accumulated, while mid-tier holders helped stabilize price discovery. At the same time, retail adoption surged, with newcomers arriving in waves to boost address counts and spur network participation.
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Sen. John Boozman, David Sacks, Sen. Tim Scott and Rep. French Hill (Jesse Hamilton/CoinDesk) |
Congress's first big crypto bill may be stablecoin legislation, at least on the Senate side.
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The crypto industry pumped hundreds of millions of dollars into the 2024 election, at least in part hoping for a friendly Congress that would pass legislation making it easier for companies to conduct business. The first step at the federal level appears to be stablecoin legislation, introduced earlier this week by Sens. Bill Hagerty, Cynthia Lummis, Tim Scott and Kirsten Gillibrand.
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David Sacks, the AI and crypto czar appointed by U.S. President Donald Trump, said the U.S. government wants to "keep that innovation onshore in the U.S.," referring to digital assets in his first major press conference since taking on the role. Sacks, a general partner with Craft Ventures, praised the industry and said keeping the innovation onshore would make it "easier to separate out the good actors from the bad actors," referencing Sam Bankman-Fried and FTX — which was headquartered in the Bahamas when it collapsed.
"I think market structure legislation with clear definitions and fair rules will do that," he said. "I want to say, additionally, we're excited about working with both the House and the Senate on stablecoin legislation … stablecoins really have the potential to ensure American dollar dominance internationally."
Sen. Bill Hagerty, a Tennessee Republican, introduced the first major legislative effort toward that on Tuesday right before the press conference. The Guiding and Establishing National Innovation for U.S. Stablecoins Act, otherwise known as GENIUS, lays out provisions for how stablecoins could be issued and how state or federal regulators would oversee both the issuers and the tokens themselves.
Issuers with over $10 billion in stablecoins would need to meet the Federal Reserve's rules for depository institutions and the Office of the Comptroller of the Currency's nonbank issuer framework, while state regulators would oversee issuers below that threshold — or issuers who secure a waiver to continue operating under a state regulator's supervision.
Reps. French Hill and Brian Steil also published a discussion draft of their own stablecoin bill. During Tuesday's press conference, Hill said the House would consider both a stablecoin bill, as well as a market structure bill similar to last year's Financial Innovation and Technology for the 21st Century Act (FIT21). |
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Stories you may have missed |
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| U.S. Bitcoin Reserve May Be Coming, But States Are Winning the Race: State legislatures have taken more concrete steps than the federal government toward establishing a crypto reserve or stockpile of any sort. U.S. Regulator Pursuing Tokenization Pilot to Tap Stablecoins as Collateral: The Commodity Futures Trading Commission is planning on launching a tokenization pilot program using stablecoins. Ransomware Payments Fell 35% in 2024 as More Victims Refuse to Pay: Chainalysis: Ransomware victims paid $814 million in ransoms last year, compared to $1.25 billion in 2023, Chainalysis research said. SEC Seems Ready to Advance XRP, Litecoin, Solana ETF Applications: The SEC has formally acknowledged exchange-traded fund applications that, if approved, will let investors put money into products tracking the prices of Litecoin and Solana. Trump’s Social Media Company Takes Steps To Launch Bitcoin ETF: Truth Social is taking steps toward launching ETFs, including a Bitcoin product. Regulation By Enforcement Is Out at CFTC, Acting Chair Pham Says: Acting CFTC Chair Caroline Pham reorganized the regulator's Enforcement Division, saying the new "simplified structure will stop regulation by enforcement and is more efficient." SEC Commissioner Hester Peirce Lays Out 10 Priorities for New Crypto Task Force: SEC Commissioner Hester Peirce said her new crypto task force would work on more clearly defining how a cryptocurrency might be seen as a security and creating a "viable" path for companies to register with the agency, among other priorities. Acting SEC Chair Uyeda Names 3 Appointees to Agency’s New Crypto Task Force: Acting SEC Chair Mark Uyeda named former Coin Center Policy Director Landon Zinda, SEC counsel Richard Gabbert and SEC senior policy adviser Taylor Asher to the agency's new crypto task force. |
Earlier in January, the CFPB published a proposal that would apply the Electronic Fund Transfer Act to stablecoins and crypto wallets. The proposal, if adopted by the regulator, would impose disclosure rules on crypto wallet and stablecoin providers. The crypto industry pushed back on the proposal, largely taking issue with how the proposal might affect self-hosted wallets or other decentralized tools.
Coin Center's Peter Van Valkenburgh wrote in a blog post that the proposal was overly broad, as it didn't "differentiate between cryptocurrency services provided by trusted intermediaries … and software tools used to secure one's own crypto."
Treasury Secretary Scott Bessent took over the Consumer Financial Protection Bureau after former director Rohit Chopra said his term had "concluded." Bessent has since frozen all of the regulator's active rulemaking and other efforts. |
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| 19:30 UTC (2:30 p.m. ET) David Sacks, Tim Scott, John Boozman, French Hill and Glenn Thompson held a press conference (see above). |
| 15:00 UTC (10:00 a.m. ET) The Senate Banking Committee held a hearing on debanking, shortly after Acting Federal Deposit Insurance Corp. Chair Travis Hill said the regulator would reconsider past crypto guidance. |
| 19:00 UTC (2:00 p.m. ET) Crypto executives testified about their concerns that they had been debanked by federal regulators before the House Financial Services Committee. |
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| (The New York Times) Elon Musk is running DOGE. The Times went into detail about what the last few weeks in the U.S. government have looked like. (The Wall Street Journal) Marko Elez, a staffer with the Department of Government Efficiency (the renamed U.S. Digital Service), resigned Friday after the Journal reported he posted things like "I was racist before it was cool" and "normalize Indian hate." Elez had access to the Treasury Department's payment system. (Bloomberg) Bloomberg's Muyao Shen and Leonardo Nicoletti detailed the whole Trump memecoin frenzy. (Blockworks) World Liberty Financial, the Trump-linked crypto project, "has been courting blockchains to take part in 'token swap' deals," Blockworks reported. (The Wall Street Journal) Jorge Tenreiro, an SEC attorney who's worked on crypto cases since Donald Trump's first term, was reassigned to an IT office. (NBC) For a brief weekend, Donald Trump threatened to impose tariffs on Canada and Mexico, and did impose a further 10% tariffs on China. The U.S. came to an agreement with Canada and Mexico to delay the imposition of these tariffs. (Bloomberg) Acting CFTC Chair Caroline Pham removed Marti Tracy, the agency's head of human resources and Joel Mattingly, its chief financial officer. Tracy was reportedly "leading an internal investigation into staff complaints against Pham," while Mattingly "had repeatedly pushed back on [Pham's] requests to fly business class," stay in luxury hotels and commute between New York and Washington, D.C. The CFTC called the reporting "false allegations" and said the former head was being investigated for allegedly failing "to address several HR matters." |
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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 at nik@coindesk.com or find me on Bluesky @nikhileshde.bsky.social. You can also join the group conversation on Telegram. See y’all next week! |
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