Hope everybody had a great and safe Fourth of July! On the day before Independence Day, the House released its updated Clarity Act text, on what would have otherwise been a week with lots of minor developments but nothing worth major story attention. And shortly thereafter, the House Financial Services Committee declared the week of July 14th to be “Crypto Week” with a flurry of legislative efforts scheduled. In other news, the big developments last week were regarding stock onChain (kinda) and crypto companies looking to bring banking in-house.
Here’s everything that happened last week in Web3 legal:
Updated Market Structure Language Release and Crypto Week Announced
The House has released its Rules Committee revised text of market structure legislation known as the Clarity Act along with a redline and comparison against old text. This is expected to reach the House floor for a full vote before the August recess, with all further Amendments due to the Rules Committee by a July 9th deadline. The largest remaining divide is seemingly still related to the President’s crypto business endeavors, with certain Democrats pushing for language which would prohibit POTUS or his family from holding or issuing tokens, which could raise unique Constitutional issues as to Congress’s power to mandate conflict of interest rules for the President. The House Financial Services Committee also declared the week of July 14th to be “Crypto Week” where the House will be expected to vote on the CLARITY Act, Anti-CBDC Surveillance State Act, and GENIUS Act.
Tl;dr– Alexa, play “The Final Countdown” by Europe. It’s about to be Crypto Week in the House. If the CLARITY Act is through the House before August, the previous optimistic timeline of full market structure passage by the end of September is possible. But the Senate still hasn’t put out their own market structure language, so that’s a lot of work to be done in a short time frame. It also looks like the people in the House pushing to have the votes on the CLARITY Act and GENIUS Act at the same time got their way, which wouldn’t be my preferred timeline because the GENIUS Act could catch shrapnel in the fight over the CLARITY Act when it otherwise is uncontroversial enough to pass on its own.
OTHER STORIES
Paradigm Crypto User Research: Paradigm always puts out great work, and their recent mapping of crypto users is no exception. The most interesting aspect was the 59% of respondents said crypto people own or previously owned can tell a lot about a person. Please don’t judge me by my NFT bags I still have…
Pat Toomy WSJ Piece: Worth adding this WSJ Opinion piece from former Senator Pat Toomey about importance of getting crypto market structure legislation right. I wonder if he includes crypto tax issues, which were not added to the “big beautiful bill” despite a late push, but I am told by tax nerd was mostly bad anyways so probably for the best.
Circle Applies for Banking License: During Chokepoint 2.0, Circle was left with limited banking options, so when Signature Bank collapsed, $USDC depegged as it was unclear if Circle would be able to recover the $3.3 billion in deposits it held there. So not surprising to see Circle try to take banking in-house. Ripple is doing the same, while a group led by Peter Thiel are looking to form a bank, Erebor, focusing on serving on AI, crypto, manufacturing, and defense technology companies.
Stocks Onchain: Robinhood is expanding its tokenized equities offering starting with ETH L2 Arbitrum. It isn’t unnoticed that Robinhood is going with the chain of one of its biggest crypto perps competitors, Hyperliquid. Robinhood had to issue a clarifying statement about what the products are after seemingly some confusion. This comes after Republic announced its “mirror tokens” for non-public companies and Superstate announced their “opening bell” path to crypto capital markets. The current SEC Chair certainly seems keen on updating existing regs to allow blockchain enabled trading to flourish, which explains the recent Ondo Finance acquisition of Oasis Pro for tokenized securities expansion plans.
John Doe Summons Live On: In the “things you hate to see” department, SCOTUS will not be hearing a case challenging the use of blanket warrantless summons against third parties. I was hopeful the makeup of the current SCOTUS would push back on the crazy expansion of warrantless financial surveillance in this country, but alas.
Polygon Back to Lending Bridged Assets?: Polygon is launching Katana, which appears to be doing what Polygon voted down regarding using bridged assets to generate yield to fund the protocol development? Polygon’s CEO took to Twitter to clear up what he viewed as misconceptions about the launch.
Figma Bitcoin Treasury: Figma, the design app that Adobe was looking to acquire for $20 billion but had the deal called off due to regulatory pressure, has filed its S-1 to go public and revealed $70 million in Bitcoin holdings with another $30 million approved for purchase by its Board.
Crypto Startup Investing Info: Loved both this article preferred deal structure for crypto VC deals and this podcast regarding largely the same. Lots of big brains on the early stage crypto side putting out valuable info for newer attorneys in the space.
Coinbase Continues Acquisition Spree: The M&A folks at Coinbase have got to be tired, having now finalized yet another acquisition, this time of token operations startup Liquifi. (Insert, “I’m Tired, Grandpa!” meme here).
Carbon Credits Onchain: JPMorgan is testing out a carbon credit marketplace for tokenized credits. Tokenizing green credits like carbon and solar credits is the perfect thing to blockchain tech since they already are stored in ledger format and often have issues with immutability and transparency.
ETH Foundation Shakeup: ETH Foundation’s head Tomasz Stańczak is listening to the complaints of the community and shaking things up. I think this effort and switching up grants to infrastructure providers instead of for-profit business efforts is a good idea.
Polymarket Drama: Lots of drama the past week over a polymarket outcome on whether Ukrainian President Zelenskyy wore a suit? It’s hard for me to get up in arms one way or the other for people betting millions of dollars on wardrobe issues.
CONCLUSION
If you have any questions or would like me to write about anything else, let me know on Twitter (X?) or Farcaster. As always, I am an attorney, I am not your attorney. For legal advice, you should always consult (and pay for) an attorney.
Outro/Disclaimer: Since late 2022, I’ve prepared weekly updates for attorneys at my firm to stay abreast of the latest Web3 legal developments. The biggest stories are included in Bi-Weekly posts on the firm’s BitBlog, where we provide tl;dr overviews and insights into the biggest stories from the past two weeks. I post the weekly updates on my personal blog every Tuesday, where I also provide links to more obscure legal developments and otherwise discuss industry trends and stories. Please note, the views and opinions I express, both on BitBlog and my personal blog, are solely my own. They do not reflect the official stance or endorsement of my firm.
The NFTtorney 