If you saw the returns in my crypto portfolio this year, you would take a pass on my predictions for the direction of the cryptocurrency market. So, I will stick to what I know and share some regulatory predictions for the crypto industry. Few legislative changes A few minor victories will logroll small legislative fixes into “must pass” bills like the defense authorization or omnibus spending bills. The top candidate would be a de minimis exemption for smaller crypto transactions to exempt users from capital gains tax liability every time they purchase a coffee with crypto. The protection for noncustodial …

While self-custody is considered the ultimate way to secure one’s funds, many fail to acknowledge the risks associated with physically storing seed phrases. A search conducted by the State Police agency for Nevada ended up making a suspect’s seed phrase public after being picked up by the body cam. A viral video making rounds on Twitter showed two police officers searching a suspect’s car and coming across pieces of paper. It turns out, the suspect was a strong believer in self-custody as unfolding the pieces of paper revealed the suspect’s seed phrase, which was hand-written — a popular method to …

Gate US, the United States arm of the fourth largest cryptocurrency exchange by trading volume, Gate.io says it has received operating licenses in “several” states, bringing it closer to launching serviin the country. Founder and president of Gate.io and its U.S. entity, Dr. Lin Han, announced in a Dec. 19 statement that Gate US is now registered as a money services business with the Financial Crimes Enforcement Network (FinCEN) — the country’s money laundering and financial crimes watchdog. He added the exchange “obtained some money transmission licenses or similar to operate, and is currently working to obtain more." Gate US …

Bankrupt cryptocurrency exchange FTX says it is considering using legal avenues to recover all payments and contributions handed out by its associated entities and former executives, which could include the millions in political donations made from its former CEO Sam Bankman-Fried. In a Dec. 19 press statement, FTX said it had already “been approached by a number of recipients of contributions or other payments” that were made by, or at the direction of Sam Bankman-Fried or other officers, adding those entities have sought “directions for the return of such funds.” Sharing our press release just issued: FTX Debtors Announce Process …

Former FTX CEO Sam Bankman-Fried, currently in the custody of Bahamian authorities, has reportedly agreed to be extradited to the United States to face charges. According to a Dec. 19 report from Reuters, Bankman-Fried’s legal team said it planned to prepare documents to have him reappear before the Bahamas Magistrate Court sometime this week. The former FTX CEO attended an emergency hearing of the court just hours earlier without any seeming adjudication or ruling — he returned to prison following the event. "Mr. Bankman-Fried wishes to put the customers right, and that is what has driven his decision,” reportedly said …

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 …

Karl Sebastian Greenwood, the co-founder of the multi-billion dollar fraudulent cryptocurrency scheme OneCoin has pleaded guilty to multiple charges brought forward by the United States Department of Justice (DOJ) and faces a maximum of 60 years in prison. The DOJ announced on Dec. 16 that Greenwood submitted a guilty plea in a Manhattan federal court to charges of wire fraud, wire fraud conspiracy and money laundering conspiracy with each charge carrying a maximum potential sentence of 20 years in jail. U.S. Attorney Damian Williams said Greenwood operated “one of the largest international fraud schemes ever perpetrated” and claimed he touted …

The Federal Reserve’s strategy to hike interest rates may continue, making it difficult for the crypto industry to bounce back. For crypto assets to become the hedge against inflation, the industry needs to explore ways to decouple crypto from traditional markets. Decentralized finance (DeFi) can perhaps offer a way out by breaking away from legacy financial models. How Federal Reserve policies are affecting crypto In the 1980s, Paul Volcker, the chairman of the Federal Reserve Board, introduced the interest hiking policy to control inflation. Volcker raised interest rates to over 20%, forcing the economy into a recession by reducing people’s …

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 …