Probabilities, politics, and next steps

This week the boys break down the Crypto Clarity Act's dramatic Senate markup with Coin Center's Peter Van Valkenburgh, covering developer liability concerns, tokenized securities language controversy, the banking industry's war against stablecoin yield.

Welcome to The Chopping Block — where crypto insiders Haseeb Qureshi, Tom Schmidt, Tarun Chitra, and Robert Leshner chop it up about the latest in crypto. Tarun's out this episode, but we're joined by Peter Van Valkenburgh, Principal of Policy at Coin Center and one of the sharpest legal minds in crypto.

This week, we're diving deep into the Crypto Clarity Act drama that has DC in chaos mode. What started as crypto's best shot at comprehensive regulation just hit a major roadblock when Coinbase pulled their support hours before the Senate markup. We'll break down the developer liability questions around "control" definitions, the tokenized securities language that has Brian Armstrong fired up, and the stablecoin yield restrictions that have banks and crypto companies at each other's throats.

Peter gives us the inside scoop on what's really in this 200-page bill, why Polymarket odds crashed from 80% to 40%, and whether this legislative train wreck can still get back on track. Let's get into it.

Listen to the episode on Apple Podcasts, Spotify, Pods, Fountain, Podcast Addict, Pocket Casts, Amazon Music, or on your favorite podcast platform.

Show highlights

🔹 Coinbase pulls support for Crypto Clarity Act hours before Senate markup, citing "defacto ban" on tokenized equities

🔹 Peter Van Valkenburgh explains developer liability concerns and how "control" definitions could impact DeFi protocols  

🔹 Debate over whether the bill actually kills tokenized securities innovation or just restates existing law

🔹 Banking industry fights to restrict stablecoin yield payments, fearing deposit flight and profit compression

🔹 Tom breaks down multiple loopholes in yield restrictions that could easily be exploited through rewards programs

🔹 Robert argues banks are protecting oligopoly profits while stifling consumer choice and competition

🔹 Peter warns that fighting over yield could jeopardize crucial developer protections like the Blockchain Regulatory Certainty Act

🔹 Polymarket odds for bill passage crash from 80% to 40% as political tensions escalate

🔹 Discussion of sanctions obligations for DeFi frontend operators and application layer providers

Hosts

⭐️Haseeb Qureshi, Managing Partner at Dragonfly

⭐️Robert Leshner, CEO & Co-founder of Superstate

⭐️Tom Schmidt, General Partner at Dragonfly 

Guest

⭐️Peter Van Valkenburgh, Executive Director of Coin Center

Disclosures

Links

Senate Banking Nears Vote on Digital Asset Market Structure by Peter Van Valkenburgh & Jason Somensatto & Lizandro (Laz) Pieper

https://www.coincenter.org/senate-banking-nears-vote-on-digital-asset-market-structure/ 

Timestamps

00:00 Intro

01:36 Clarity Act Panic

04:46 Peter's Expert Take: Why This Bill Matters

10:16 Developer Liability

19:36 Sanctions Compliance

27:03 Tokenized Equities Fight

35:42 Great Yield War: Banks vs. Stablecoins

45:11 Will Clarity Survive?

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