Criticisms Rise Before Vote on America's Cryptocurrency 'Clarity Act' (cnn.com) 21
An upcoming vote in a few weeks on America's cryptocurrency "Clarity Act" is "rattling Wall Street and consumer advocates," reports CNN, with its proposal to regulate the bulk of crypto markets through America's Commodity Futures Trading Commission. "It allows crypto companies to operate, at long last, in compliance with U.S. rules, rather than what they have been doing — essentially running their businesses within a patchwork of state and federal legal gray areas."
Even for Jamie Dimon, the banking titan who's not known to mince words, it was a surprising shot across the bow when he described a fellow financier as "full of sh*t." "No one's gonna bow down to this guy or that company," Dimon told Fox Business last week. "This guy" being Brian Armstrong, and "that company" being cryptocurrency exchange Coinbase. The Dimon-Armstrong tension isn't new, but it is boiling over publicly as the Senate inches closer to a floor vote on the crypto industry's No. 1 legislative priority, known as the Clarity Act. Dimon, a longtime crypto skeptic, broadly supports crypto regulation but takes issue with a provision in the Clarity Act that would allow companies like Coinbase to "effectively pay interest on deposits... without the protection they should have."
The spicy comment about Armstrong came after Dimon rattled off other concerns about the Clarity Act, including what he sees as its insufficient anti-money-laundering and know-your-customer safeguards that banks have had in place for decades... "If (Armstrong) takes deposits like a bank, he should have bank rules," Dimon said in the Fox Business interview... The immediate concern from banks (and many consumer advocates) is that crypto exchanges like Coinbase would, in the grand tradition of Silicon Valley innovation, lure customers in with huge rewards and then phase those benefits out over time. Deposits in a crypto exchange are also not insured by the federal government the way bank deposits are, but that's the kind of fine print that customers tend to overlook until it's too late. JPMorgan Chase spokesperson Trish Wexler underscored that the bank wants the bill to pass, with some "fixes," like prohibiting rewards on stablecoin holdings and strengthening anti-money-laundering guardrails.
Coinbase's CEO responded in an interview with Politico: Armstrong pointed to restrictions on rewards paid to idle cryptocurrency balances and disclosures on stablecoins as part of a handful of policies included in the bill to appease the banking industry's requests. "I think it'd be good for the banks," Armstrong said of the bill. "It would be great for crypto companies as well ... Hopefully we can get past the absolutisms and just see if we can get this bill over the finish line."
But CNN notes concerns about weaving cryptocurrency — "a historically self-contained financial system prone to stomach-churning booms and busts" — more deeply into America's traditional finance infrastructure: "It's not just a crypto story, it's a broad deregulation of our securities markets story," Hilary Allen, a law professor at American University who specializes in banking and cryptocurrency, said in an interview. And that should concern everyone, Allen says, even if they have no investments at all, because "if we get a financial crisis in this space... no one comes out of that unscathed."
The spicy comment about Armstrong came after Dimon rattled off other concerns about the Clarity Act, including what he sees as its insufficient anti-money-laundering and know-your-customer safeguards that banks have had in place for decades... "If (Armstrong) takes deposits like a bank, he should have bank rules," Dimon said in the Fox Business interview... The immediate concern from banks (and many consumer advocates) is that crypto exchanges like Coinbase would, in the grand tradition of Silicon Valley innovation, lure customers in with huge rewards and then phase those benefits out over time. Deposits in a crypto exchange are also not insured by the federal government the way bank deposits are, but that's the kind of fine print that customers tend to overlook until it's too late. JPMorgan Chase spokesperson Trish Wexler underscored that the bank wants the bill to pass, with some "fixes," like prohibiting rewards on stablecoin holdings and strengthening anti-money-laundering guardrails.
Coinbase's CEO responded in an interview with Politico: Armstrong pointed to restrictions on rewards paid to idle cryptocurrency balances and disclosures on stablecoins as part of a handful of policies included in the bill to appease the banking industry's requests. "I think it'd be good for the banks," Armstrong said of the bill. "It would be great for crypto companies as well ... Hopefully we can get past the absolutisms and just see if we can get this bill over the finish line."
But CNN notes concerns about weaving cryptocurrency — "a historically self-contained financial system prone to stomach-churning booms and busts" — more deeply into America's traditional finance infrastructure: "It's not just a crypto story, it's a broad deregulation of our securities markets story," Hilary Allen, a law professor at American University who specializes in banking and cryptocurrency, said in an interview. And that should concern everyone, Allen says, even if they have no investments at all, because "if we get a financial crisis in this space... no one comes out of that unscathed."
Legitimizing the grift. (Score:5, Insightful)
Cryptocurrency is a waste of energy and drain on the economy. Nothing of value is produced because it's all a grift.
Re: (Score:3)
Between the gambling houses that are claiming to be securities trading and this nonsense and the president of the United States constantly selling pardons and soliciting bribes I know the shit's going to hit the fan hard and there's not a hell of a lot I can do about it.
I used to think the baby boomers were all going to die and leave everyone was a mess to clean up but I think they fucked up so bad letting these
Re: (Score:2)
Yep. It really pisses me off and freaks me out that we've let so many grifters take over.
While it bothers me too, I expect (most of) it will get rapidly unwound after January 2029.
Re: (Score:2)
I wish I was as hopeful. Though I do hope you are correct.
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I expect (most of) it will get rapidly unwound after January 2029.
I wish you were right, but I'm afraid history shows us you're much too optimistic. America isn't a nation of laws anymore, not even at the middling level it was before. I don't see how it can get back to being one. The situation reminds me very much of Yeats' verse: "The best lack all conviction, while the worst / Are full of passionate intensity"
We've been in very similar situations before: Dubya started the war in Iraq to deflect attention from his failing presidency, nominated incompetent leaders based
Re: (Score:3)
The question they're debating now seems to be "How egregious of a scam do we want to legalize?"
The richest nation in history, pissing it away. A whole economy of waste.
Re: (Score:2)
Nothing of value is produced
It's certainly of value to the grifters - lets just pray we don't get a grifter in charge of the federal government's crypto regulations.
Let me guess (Score:1)
A certain coin owned by the president will be exempt. Remember when they made Jimmy Carter sell his peanut farm?
Wary of this administration (Score:5, Insightful)
You have to be wary (and probably weary) of this administration passing any financial laws and policies that are doing long term damage to the country and our alliances for short term games for one individual.
We have sold the country out and are doing nothing about it but sitting back and hoping an adult will step in. And they haven't at this point, it's clear that nobody will be doing this.
The country is sold out. The reputation is damaged. America will never again be a leader or a beacon of hope. Instead, it will be even harder to believe that can ever truly happen because the giant fell. The trust is gone. Fascists can point and laugh at America and tell their citizens any such dream of freedom and equality IS A LIE because of us. We have armed our opponents with the most powerful weapon. Our defeat at our own hands.
NO FAKE CURRENCY (Score:4)
Pretty soon you won't know how worthless which currency you have is. You'll just know you won't be able to afford shit at some point.
Crypto is a grift. Plain any simple. Anyone who says otherwise is no better than someone who defends a thief.
We have fake currency already.....ever since we went off the gold standard. IF you want to destroy consumer confidence and destroy buying power, unregulated bullshit is it.
He's missing the point (Score:4)
The sole purpose of this bill is to increase the value of our dear leader's investments in crypto.
Fuck You ALL (Score:2)
Dimon can fuck right off with his self serving bullshit. He wants crypto exchanges treated as banks in order to maintain his moat. Of course, that opposing to the reason for the existence of crypto. But, despite Dimon's duplicity, there are plenty of orgs taking deposits and paying interest without any FDIC backing or consumer tressury protection. The consumer is completely unprotected when using investment accounts at any and all of the stock/option/futures brokerages including Goldman Saks, Ameritrade, Me
You're Right. (Score:2)
You're right. I transposed the names and now I look stupid.
But, if you swap the names, virtually everything else in my comment remains the same and is accurate.
Re: (Score:2)
Who came out unscathed from the last financial crisis due to all the "legal protections"?
There basically were no legal protections in place in 2008 - they'd all been largely removed by the government (both parties) over time. The problem was a lack of regulation.
To some degree, that got addressed afterward... but then Trump 1 and 2 have done their best to roll the protections back.
Crypto Is a Money Laundering Engine (Score:1)
Clarity Act (Score:2)
Remember kids, when you want to understand at a very basic level what an act does, take the name and turn it to its opposite. The Clarity Act is -- without knowing anything else -- much more likely to be about leagalizing obfuscation than any else.
banks rules...ha. (Score:2)
If the banks rules were good ones, the limit for deposit or withdrawal without having to provide documentation would be, because of inflation, over $250000 per transaction. Whereas its still $10000 because reasons.
On the other hand, as long as they don't have to pay protection to the FDIC, let them use the same blanket statement that investment companies use, along with some statement about volitility and personal ignorance.
1929 2, the sequel (Score:2)
Accepting consumer deposits = bailouts (Score:2)
Accepting consumer deposits means the company will become a legitimate bailout recipient when it runs into trouble. This will creates a stabilizing force for the price of crypto. This will further the gambling economy and enhance the net worth of those who currently have crypto.
Not saying any of that is good or bad, just that that is what will happen.
Dimon is concerned about getting market share taken away and competition.