Why Many Democrats, Including the White House, Have Come Around on Crypto - Ep. 652
May 28, 2024
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Sheila Warren, CEO of the Crypto Council for Innovation, dives into the recent political changes regarding cryptocurrency legislation. She discusses how the overturning of SAB 121 and the FIT21 bill have shifted the White House's stance on crypto. Sheila highlights persuasive arguments that changed Democratic views and reflects on the lasting effects of the SBF and FTX scandals. With pride, she explains the implications of the FIT21 bill and the SEC's surprising approval of spot ETH ETFs, marking a pivotal moment for bipartisan collaboration in crypto legislation.
Bipartisan support for FIT21 highlights Democrats' evolving stance on crypto legislation.
Influential figures like Nancy Pelosi and Chuck Schumer's support signal a political shift.
Industry perception shifting post SPF Bit scandal, focusing on compliance over past events.
White House's positive stance post-veto signals significant policy transformation.
Deep dives
Significant Bipartisan Support
The podcast episode highlights the significant bipartisan support garnered for the financial innovation and technology for the 21st century act, known as FIT 21, with 71 Democrats voting in favor of the comprehensive crypto legislation. This bipartisan support across moderate and progressive Democrats was deemed as rewarding and vital by the industry advocates, emphasizing the importance of not giving up on Democrats despite past challenges. The efforts to secure this bipartisan backing spanned not only the two weeks leading up to the vote but were recognized as a culmination of two years of persistent education and advocacy to emphasize the competitiveness and regulatory advancements brought forth by FIT 21.
Influential Support from Key Figures
The episode underscores the significance of influential figures, such as former Speaker Nancy Pelosi and Democratic whip Catherine Clark, lending their support to FIT 21. The unexpected backing from individuals like Congresswoman Jasmine Crockett and Majority Leader Chuck Schumer marked a pivotal shift in political perceptions towards digital assets legislation. The positioning of key Democrats, known for their distinct stances, signals a transformed perspective within the political landscape, contributing to the broad support and eventual success of the bill.
Evolving Perceptions Post-SPF Bit
Reflecting on the aftermath of the SPF Bit scandal, the episode delves into the evolving perceptions within the industry and the broader context. While remnants of skepticism and caution may linger among some, the conversation highlights a noticeable shift towards a more contextualized understanding of the incident. The conviction of SPF Bit underscored the fraudulent nature of the act, redirecting the focus towards compliance with existing laws and regulations rather than dwelling on past sensationalized events. The episode notes that while occasional inquiries may surface from those new to the space, the impact of SPF Bit has significantly diminished, paving the way for a more forward-looking approach in the industry.
White House's Strategic Position Shift
The podcast episode emphasizes the strategic shift in position from the White House regarding digital assets legislation, contrasting their earlier veto stance with a supportive outlook towards collaborating with Congress on developing legislation. The shift in sentiment, exemplified by a more positive and cooperative tone in the latest White House statement, signifies a notable sea change in the administration's stance on digital assets regulation. The alignment of key political figures and strategic decisions within the political landscape, including acknowledgements of bipartisan support and crucial voices backing the bill, contributed to this significant transformation in the White House's position.
FIT21 Overview
FIT21 is a bill that addresses the oversight of digital assets by the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). The bill aims to formalize the roles of these agencies and regulate the industry more effectively by jointly issuing rules. It introduces provisions related to whistle-blowing and intent to register periods, highlighting consumer protection measures.
Title Two Clarification
Title Two of the bill focuses on defining securities and investment contract assets, aiming to provide clarity on how the SEC regulates digital assets. By distinguishing between securities and investment contract assets, the bill aims to prevent the SEC from claiming full regulatory authority over the industry and highlights the need for new regulations.
Democratic Party Perspective
The podcast delves into the evolving views within the Democratic Party regarding digital assets and regulation. It emphasizes the importance of educating Democrats about the significance of the technology and industry, encouraging an open-minded approach towards policy-making and avoiding single-issue voting. The discussion highlights the party's receptiveness to learning more about digital assets and adjusting their stance based on informed perspectives.
Sheila Warren, CEO of the Crypto Council for Innovation, joins Unchained to explore the dramatic shift by Democrats in the last few weeks on crypto. She explains why she believes the overturning of SAB 121 and the House vote for the FIT21 bill were both instrumental to the White House's changing view on crypto and may have played a role in the SEC’s surprising approval of spot ETH ETFs.
Having worked for years on passing crypto legislation and as a lifelong Democrat, Sheila describes what kinds of arguments were persuasive to Democratic members of Congress, addresses some criticisms of the FIT21 bill, and gives her perspective on the debate about single-issue voters.
Show highlights:
The overall attitude toward crypto in Washington going into the House vote on SAB 121 on May 8
The bipartisan votes in the House and Senate to overturn SAB 121
Why, by the time of the Senate vote on FIT21, the White House had had a change of heart about crypto
Why, after the Senate vote to repeal SAB 121, the SEC approved the spot ETH ETFs
Why Sheila is so proud of the passage in the House of the FIT21 bill
How Sheila and CCI approached their discussions with Democrats and what arguments they found effective
Whether the industry has survived the negative image of SBF and FTX
The sea change in the White House between the SAB 121 vote and the FIT21 vote
A high-level description of the FIT21 bill
What kind of authority the bill would give the CFTC over crypto
What the implications of the bill are for launching tokens
FIT21’s approach to regulating DeFi and how the FIT21 bill is "kicking the can" on this topic
The overall political and legislation landscape and the next likely steps for crypto
Whether the ETF approval changes anything about the SEC’s investigation into Ethereum
What Sheila thinks about the 'crypto single-issue voter’ debate
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