6th February 2025 > > US & UK regulatory revolution.

tl;dr

The US regulatory revolution is picking up pace, and may even be taking the UK with it.

Market Snap

Market Wrap

US stocks heading towards new highs suggests that markets are liking the Trump twin threats of tariffs, and generally invading the territories of both allies and foes. The markets are saying that he isn’t serious about those threats, but he is serious about improving the US economy, which is what really concerns investors.

In contrast, cryptos are looking a little unloved. Spot BTC ETF flows remain strong with the exceptions of the two days following the DeepFake news and the tariff impositions which have been rescinded. Call me biased by all means, but all I can see is positive news for cryptos right now, so I am a little flummoxed by this disappointing price action.

Curious Cryptos’ Commentary – US regulation again

The New York Times has reported that the SEC is scaling back its crypto regulation by litigation department in anticipation that there will be clear and well-defined rules in place in the near future. Note that this is not relaxing regulations over cryptos, as the hysterical and uninformed major news outlets would have you believe. Quite the opposite in fact, and all very beneficial to the crypto industry.

One notable scalp is the transfer of chief litigation counsel Jorge Tenreiro, whose hounding of crypto firms has been rewarded with a demotion to an administrative role in the IT department of the SEC. Couldn’t happen to a nicer chap.

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The SEC had taken a much more proactive role in trying to stamp out the crypto industry than the CFTC (Commodities and Futures Trading Commission) but that isn’t to say that the latter has been blameless in that regard. In yet another strong indication of the sea-change in attitude in the US to cryptos, acting chair Caroline D. Pham has announced her own reorganisation (emphasis mine):

“The CFTC is strengthening its enforcement program to focus on victims of fraud, as well as remaining vigilant for other violations of law. This simplified structure will stop regulation by enforcement and is more efficient. These much-needed changes will maximize the CFTC’s resources to bring more actions to pursue fraudsters and other bad actors, and not punish good citizens.”

Curious Cryptos’ Commentary – The UK

You will recall that Rishi Free Money Sunak and Jeremy not my real surname but this is a family friendly publication Hunt were high ranking foreign operatives of Warren’s anti-freedom and anti-liberty army. I had little expectation that there would be any change under Sir Keir 4th Tier Starmer. Now that Tulip Siddiq, laughably appointed as anti-corruption minister with responsibility for ensuring financial propriety in public life by the aforementioned Farmer Harmer Starmer, looks to be heading to the slammer for allegedly being involved in the financial defenestration of the Bangladeshi people, her successor Emma Reynolds is showing some signs of promise on the topic of cryptos, though she is a little confused about things as well.

Let’s deal with her confusion first. On a personal level, she says she invests in “things with value” but at the same time rules out cryptos from her personal portfolio. This suggests that she agrees with the ECB which stated on 23rd February 2024 “… and (we) reiterate that the fair value of Bitcoin is still zero.” Plainly that is not the case.

Moving on, in various contexts Emma has made promising noises about needing a firm and clear regulatory environment for cryptos, stating that the UK can learn a lot from MiCA. This is a rare example of a leading politician not only talking sense, but telling the truth too. That’s one to save for the scrapbook.

But now we actually have some action to back up her words.

Coinbase received approval on 3rd February from the FCA, the UK regulator, as a registered virtual asset service provider, solidifying its role as a fiat on-ramp into the crypto world. This is important news, for it shows that in the UK we are finally accepting that cryptos are a legitimate investment and payment vehicle. This is a sharp about-turn from what we had before. It is possible that the UK will soon be attracting crypto tax-dollars in competition with the EU.

As part of this approval, the transfer of cryptos from Coinbase to self-custodial wallets has changed, and for the better. Previously, no information was collected about the destination wallet. Now, the transferor has to identify the owner of the wallet. If it is your own wallet, you must sign a fee-less transaction from that wallet proving ownership.

I think this tells us that the UK is getting serious about tracking the movement of cryptos onchain, presumably to strengthen the tax-collecting process.

This is a good start from Emma, who is moving very quickly to change things. She has the CCC’s full support, at least for now.