North Carolina Representative Patrick McHenry, the current ranking member of the House Financial Services Committee and chair starting in January, has reintroduced legislation aimed at creating innovation offices within government agencies dealing with financial services. In a Dec. 19 announcement, McHenry said he had reintroduced the Financial Services Innovation Act — a bill he previously pushed in 2016 and 2019. The legislation was aimed at creating offices within existing federal financial institutions that could help innovators — including those dealing with crypto and blockchain — a path towards regulatory clarity in the United States. According to McHenry, companies could apply …

Welcome to Law Decoded, your weekly digest of all the major developments in the field of regulation. The FTX drama escalated last week when the Royal Bahamas Police Force arrested its former CEO, Sam Bankman-Fried, at the request of the United States government. Within hours, politicians, crypto executives and influencers had all booted up their Twitter apps to comment on the arrest of the former CEO, who had to miss his testimony before the U.S. Congress. However, the text of SBF’s planned testimony was obtained by the media, wherein he blamed the inclusion of FTX.US in the Chapter 11 bankruptcy …

Former FTX chief executive officer Sam Bankman-Fried, who is currently facing multiple charges related to wire fraud and securities fraud, reportedly said he wanted to see the indictment against him before agreeing to extradition to the United States. Appearing in an emergency hearing of the Bahamas Magistrate Court on Dec. 19 for the first time since his bail was denied, Bankman-Fried reportedly said he was willing to not fight the process required for extradition to the United States but wanted to see all the charges against him. He spent the last week in the Bahamas’ Fox Hill Prison, a facility …

The arrest of European Parliamentarian and cryptocurrency proponent Eva Kaili has been labeled as a blow to the ecosystem by prominent blockchain industry participants. Kaili, one of 14 European Parliament vice presidents, was arrested and charged on Dec. 10 by Belgian prosecutors that are investigating allegations of corruption, money laundering and criminal organization involving Qatar and senior policy-makers in Europe. Belgian police reportedly seized €600,000 in cash as well as computers and cellphones belonging to Kaili and three other individuals involved in the probe. Kaili has since been suspended from the European Parliament, which she’s been a member of since …

The Nigerian government will reportedly soon pass a law that will recognize the usage of Bitcoin (BTC) and other cryptocurrencies as a means to keep up to date with “global practices.” The news was reported by Nigerian-based masthead Punch Newspapers on Dec. 18 following an interview with House of Representatives Committee on Capital Markets chairman Babangida Ibrahim. The report stated that if the Investments and Securities Act, 2007 (Amendment) Bill is signed into law it would allow the local Securities and Exchange Commission to “recognize cryptocurrency and other digital funds as capital for investment.” Ibrahim stressed the need for Nigeria …

United States Banking Committee chairman Sherrod Brown has suggested that the Securities Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) should perhaps consider a ban on cryptocurrencies. Brown’s comments were made in a Dec. 18 appearance on NBC’s “Meet the Press” although the Senator quickly added that a ban would be difficult to enforce. “We want them to do what they need to do at the same time, maybe banning it, although banning it is very difficult because it would go offshore, and who knows how that would work.” Earlier, in response to a host's question about Senator …

The prosecutors investigating former FTX CEO Sam Bankman-Fried (SBF) have reportedly reached out to top members of the Democratic Party demanding information about the political donations made by the entrepreneur. Democratic members from the Democratic National Committee (DNC), the Democratic Congressional Campaign Committee (DCCC) and Congressman Hakeem Jeffries were contacted by SBF prosecutors for information to aid their ongoing investigations, according to a New York Times report. The United States attorney’s office for the Southern District of New York sent an email to the Democratic Party elections lawyer Marc Elias, asking for details on donations made by SBF. Similar emails …

Sam Bankaman-Fried, former FTX CEO, has reportedly reconsidered his earlier decision to contest extradition and is expected to appear in court in the Bahamas on Dec. 19 to seek a reversal, Reuters reported on Dec. 17 citing a person familiar with the matter. By consenting to extradition, Bankman-Fried would be able to appear in a United States court. He faces charges of conspiracy to commit wire fraud on customers and lenders, securities fraud, commodities fraud, money laundering and conspiracy to defraud the United States and violate the campaign finance law. The move follows the Bankman-Fried's bail denial on Dec. 13 …

The Securities and Exchange Commission (SEC) was "asleep at the wheel" regarding how FTX Group and its subsidiaries met financial and corporate control requirements, Representative Pete Sessions said in the Saturday Report on December 17. "We need to look at what the Securities and Exchange Commission was doing", stated the Texas Congressman, adding that "the SEC was asleep at the wheel for these billions of dollars that we now find out about a year later." The SEC filed charges against Sam Bankman-Fried (SBF), the former CEO of FTX, on Dec. 13, claiming that Bankman-Fried violated the anti-fraud provisions of the …

A global standard for banks' exposure to crypto assets has been endorsed by the Group of Central Bank Governors and Heads of Supervision (GHOS) of the Bank for International Settlements (BIS). The standard, which sets a limit of 2% on crypto reserves among banks, must be implemented on January 1, 2025, according to an official announcement on Dec. 16. The report, dubbed "Prudential treatment of cryptoasset exposures", introduces the final standard structure for banks regarding exposure to digital assets, including tonenized traditional assets, stablecoins and unbacked cryptocurrencies, as well as feedback from stakeholders collected in a consultation launched in June. …

Following the arrest of former FTX CEO Sam Bankman-Fried (SBF), three prominent Democratic groups have reportedly decided to return over $1 million to investors that lost their funds due to misappropriation. On Dec. 16, the Democratic National Committee (DNC), the Democratic Senatorial Campaign Committee (DSCC) and the Democratic Congressional Campaign Committee (DCCC) pledged to return SBF’s political donations after the entrepreneur was charged with eight counts of financial crimes. A DNC spokesperson reportedly confirmed this decision when speaking to a media outlet, the Verge: “Given the allegations around potential campaign finance violations by Bankman-Fried, we are setting aside funds in …

Officials with the United States Financial Stability Oversight Council, or FSOC, have recommended U.S. lawmakers pass legislation aimed at addressing regulatory gaps for crypto-related activities. In its annual report released on Dec. 16, the FSOC recommended members of Congress pass legislation granting “explicit rulemaking authority for federal financial regulators over the spot market for crypto-assets,” noting that tokens previously identified as securities would be exempt. The council also noted the lack of a comprehensive regulatory framework — specifically addressing stablecoins and visibility and supervision of crypto firms — in the United States. The FSOC cited the recent downfall of crypto …