Hi All,

Exciting times when regulators are running on all cylinders. A few more weeks until the Fed Board of Governors joins the ranks of fully-staffed regulators. And an expanded definition of “exchange” at the SEC could be big news for crypto. Read on:

• Senate hearings show partisan split on Fed nominees: As expected, Republicans charged President Biden’s three nominees with having partisan leanings. Nominee Sarah Bloom Raskin was questioned over her relationship to a fintech bank that received Fed access to payment rails. With Chair Jerome Powell still not yet confirmed, the Senate is set to vote on February 15th.
• The SEC proposes updating its definition of “exchange”: Without explicitly naming blockchain technology or cryptocurrencies, the SEC’s 650-page proposal would expand its definition of a securities exchange to cover more market makers and communication protocols. Gabriel Shapiro has the best summary of its impact and how industry can respond in the next 30 days.
• Bradley Tusk joins “Regulating the Metaverse” white paper party: What Coinbase and a16z started, legendary lobbyist Tusk now joined with an extensive memo. Tusk takes a progressive approach, calling for government to abandon its wait-and-see approach and “guide the action.” He also sees potential for labor regulation to support digital work, including portable benefits for non-traditional jobs. A worthy read.
• Consumer advocates ask regulators to block fintech payday loans: A coalition of advocates sent a letter to the CFPB, FDIC, and OCC asking the FDIC to shut down fintech-bank partnerships that offer loans exceeding state interest rate limits. This is just the latest in the ongoing saga on bank-fintech partnership in the personal lending space. After Mercatus Center academics published a WSJ op-ed calling the CFPB’s concern over lending “arbitrary,” Georgetown Law professor Adam Levitin published a blog clarifying some simple math errors in their underlying research.
• Bipartisan group sends Yellen letter on crypto in infrastructure bill: Remember a few months back, when crypto lobbying erupted around the inclusion of brokers in a tax portion of the infrastructure bill? With the bill still being pursued, the issue hasn’t quite passed. The House Financial Services Committee sent a letter to Treasury Secretary Janet Yellen asking to consider a narrower definition of “broker” that wouldn’t capture miners. The Committee explored its own revision in a proposal late last year, and now asks Treasury to do the same.

• UK explores regulation to counter push payment fraud: Several MPs are pushing government to require reimbursement for victims of push payment fraud. This follows a report from the Treasury Committee highlighting fraud and scams in the sector.