The Chamber of Digital Commerce has taken a definitive step to champion the integrity of trademarks within the burgeoning realms of the Metaverse and NFTs by filing an amicus brief in the landmark case involving Hermès and its iconic Birkin bag trademark.
We extend our profound gratitude to the esteemed legal team at Polsinelli Law Firm for their exceptional leadership in crafting our amicus brief for this pivotal case. Special thanks to Jonathan Schmalfeld, Laila Wolfgram, and Dan Mullarkey for their dedication and expertise. Their contributions have been invaluable in shaping a compelling argument that stands to make a significant impact on the future of digital asset jurisprudence.
Why This Case Matters
The Chamber’s amicus brief underscores the vital role that trademarks play in the digital marketplace. In an era where physical goods are increasingly represented by their digital counterparts, trademarks are not just a legal formality; they are the lighthouse guiding consumers through the fog of the digital marketplace. The Chamber’s stance is clear: the protection of trademarks in the Metaverse and for NFTs is a consumer imperative.
The Economic Potential of NFTs and the Metaverse
NFTs are carving new pathways for creativity and commerce, with industries like sports, entertainment, gaming, and fashion already capitalizing on their potential. As these digital goods become more integrated into our everyday lives, it’s paramount that the trademarks associated with them are protected. This not only assures consumers of the authenticity and quality of their digital goods but also fosters an environment where brands and creators can confidently innovate.
Our Call to the Court
The Chamber’s brief argues that traditional tests for trademark infringement, such as the likelihood of confusion analysis, should apply to digital goods and NFTs. Our digital future depends on the clear and consistent application of trademark law to avoid misleading consumers and infringing on brands’ and creators’ right to enter the Metaverse when they choose.
Looking Forward
“NFTs and the blockchains they are recorded on are important technologies that will be instrumental to the continued development of the internet and e-commerce. It was an honor for the Polsinelli Blockchain+ team to work with The Chamber of Digital Commerce for this amicus, which we hope will create case law that protects brands, creators, and consumers as they enter web3 and the Metaverse” said Jonathan Schmalfeld, Associate at Polsinelli PC.
As the Chamber of Digital Commerce stands with Hermès in this case, we are not just advocating for one brand’s rights. We are setting a precedent for the entire digital economy, ensuring that the trademarks which have become synonymous with trust and quality in the physical world carry the same weight in the digital one.
We invite you to read our full amicus brief and join us in this pivotal moment for the future of digital commerce.
Author: Nate Harris
Sec. Yellen’s Testimony to Senate Banking and House Finacial Services Committees
This past week, Secretary of the Department of Treasury Janet Yellen testified before the House Financial Services and Senate Banking Committees in hearings titled: “The Annual Report of the Financial Stability Oversight Council (FSOC).”
Yellen identified gaps in the current regulatory framework, especially around stablecoins and the broader crypto market. The hearings highlighted a collective call to action for Congress to establish clear rules that could guide the future of finance in a digital age. With a focus on enhancing financial stability and protecting consumers, the testimony underscored the urgency of adapting regulatory practices to keep pace with innovation.
Key Takeaways:
- Sec. Yellen pointed to regulatory gaps: “Congress should pass legislation to provide for the regulation of stablecoins and the spot market for crypto assets that are not securities.”
- “The CFTC, for example, doesn’t have supervisory or regulatory authority with respect spot markets and commodities like Bitcoin…so that’s a regulatory gap.”
- “Stablecoins pose risks to the financial system that both FSOC and the President’s Working Group on Financial Markets have identified as potentially becoming significant over time and we would very much welcome an effort by Congress to create a regulatory framework that would be appropriate to address those risks.”
- Chair McHenry (R-NC) highlighted legislation to fill these gaps: “On the regulation of the spot market for digital assets. This committee has produced two, bipartisan bills. One on stablecoins and one on market structure to regulate the spot market of digital assets, providing clarity between the SEC and CFTC.”
- McHenry continued: “stablecoins are now being regulated by the states. New York has a very ‘resilient’ regime. Are you suggesting something like the New York regime would be applicable to fix this problem?”
- Sec. Yellen responded that “FSOC believes it’s critical for there to be a federal regulatory floor that would apply to all states and a that federal regulator should have the ability to decide if a stablecoin issuer should be barred from issuing such an asset.”
- Both bills, the FIT for the 21st Century Act and the Clarity for Payment Stablecoins Act, passed HFSC in July of last year and still await a full floor vote in the House.
- Sen. Brown (D-OH) and Sen. Warner (D-VA) continued to point to illicit finance’s use of crypto:
- Sen. Brown questioned if Treasury needs to “update [their] counter-terrorism tools to respond to the risk created by digital assets?” Sec. Yellen responded that the agency has “identified a number of holes in our authorities and composed a list of suggestions for ways in which Treasury’s authorities could, and should be, strengthened.”
- Sen. Warner asked for a direct endorsement of his Terrorist Financing Prevention Act, legislation that would broaden the U.S. Treasury Department’s sanctions powers and grant FinCEN additional authorities to address threats involving digital assets. Sec. Yellen affirmed her endorsement and added “I would agree that there are limitations the Treasury faces, and we certainly support the aims of the bill. It would help give us authorities that would enable us to better deal with a very significant threat.”
2023 Spotlight. Driving Crypto Adoption.
As we embark on a new year, today, we are thrilled to showcase some of our significant milestones from the past year. We have played a pivotal role in advocating for our industry, resulting in remarkable legal victories and substantial policy changes. These developments have laid a robust foundation for our industry as it enters the next phase of adoption.
Read on 👇
Creating Congressional Champions
Convos with Congress: In 2023, we facilitated over 240 industry meetings with Congressional offices, and the results are showing (as you will see below). We played a crucial role in blocking adverse bills and fostering influential, bipartisan legislation like the “FIT Act” and the “Deploying American Blockchains Act.”
Stop the Crypto Ban
Our advocacy video received 1.1 million views, resulting in over 11,000 signatures to petition the Stop the Crypto Ban. However, we haven’t won our battle yet. Take action, and save our industry.
The Need for Proof of Reserves
Fighting Crypto Fraud: We are committed to fostering the adoption of Proof of Reserves within the industry. The collapse of FTX in November 2022 spurred us to elevate our work in this area. Policymakers from across the nation have actively engaged with us, seeking regulatory solutions to safeguard the cryptocurrency industry from future fraud and abuse.
On June 9, 2023, the Governor of Texas signed H.B. 1666 into law, mandating Proof of Reserves for digital asset exchanges in the State of Texas.
On October 19, 2023, U.S. Senators Tillis (R-NC) and Hickenlooper (D-CO) introduced the bipartisan Proving Reserves of Others’ Funds Act, or the PROOF Act, in the Senate. The bill, currently pending, would enhance transparency at cryptocurrency exchanges far beyond the capabilities of conventional financial institutions.
We Launched the Digital Power Network
A New Advocacy Group: Representing over 50% of the U.S. Bitcoin hash rate, Digital Power Network is a strategic endeavor to advocate for Bitcoin and blockchain technology with energy and national security stakeholders.
Advancing Energy Security: We teamed up with U.S. Rep. Pete Sessions to introduce HR 238, promoting Bitcoin mining as a pivotal tool for advancing domestic energy security.
#1 Barrier to Corporate Adoption of Bitcoin
The historically complex accounting challenges surrounding digital assets have, as Michael Saylor aptly put it, been “the number one impediment to the corporate adoption of bitcoin.” In 2023, we broke through this barrier.
Treasury Triumph: After a long battle advocating for clear accounting rules, the Financial Accounting Standards Board approved a groundbreaking change, permitting businesses to record digital assets at fair market value. This rule change will empower businesses to utilize bitcoin for treasury management purposes.
The SEC’s “Forever War”
The ongoing battle for regulatory clarity in the digital asset sector, dubbed the SEC’s “forever war” by the Wall Street Journal, has prompted legal battles. This conflict drove many innovators and investors to relocate outside the United States, impacting the country’s leadership in advanced technologies.
Legal Win: In the landmark case SEC v Ripple, the District Court accepted all recommendations from our Amicus Brief, marking a substantial victory for the industry, which helped establish much-needed regulatory clarity.
Unlocking Institutional Adoption
Institutional investors will play an important role in the mainstream acceptance of digital assets. However, to pave the way for their participation, we must ensure the necessary infrastructure is firmly in place. For regulated financial institutions to engage with digital assets, it is imperative that they have access to institutional-level custody solutions.
SAB 121 is an unworkable custody requirement for digital assets, requiring custodians to hold an equal asset on the balance sheet as a liability, meaning for every $100 in bitcoin the custodian holds, it must also hold $100 in a similar asset.
Power: We urged Congress to rescind SAB 121, prompting the Government Accountability Office (GAO) to take action. The GAO found that SEC’s release of SAB 121 violated the Administrative Procedure Act, thereby making it subject to Congressional review. This year, we are focused on working with our partners on the Hill to nullify SAB 121.
The Historic ETF Approval
IT HAS BEEN APPROVED! For over a decade, the SEC has blocked spot bitcoin ETFs from the U.S. market. We investigated why the SEC appeared to hold Bitcoin to a different standard. The spot bitcoin ETF approvals are not just a win for The Chamber of Digital Commerce and our members, it is a victory for the entire digital asset community and all proponents of investment choice and regulatory fairness.
The Crypto Conundrum: We produced a report exploring the SEC’s unwillingness to approve spot bitcoin ETF applications and exposing the SEC’s arbitrary actions. Our report reached all 535 Members of Congress.
We didn’t stop at a report: In addition to joining an Amicus Brief in the matter of SEC v. Grayscale, we were actively involved in an awareness campaign on Capitol Hill. Our efforts generated sustained pressure on the SEC to approve spot bitcoin ETFs.
Here’s to 2024: The Cardinal Year for Crypto!
Take Action in 2024: Consider joining us at The Chamber of Digital Commerce in 2024 as we continue to grow as an organization and make a direct impact on crypto policy. You can also support our work by making a tax-deductible donation here.
Thank You for a Remarkable 2023! Your support made it possible, and we’re ready for even greater things in 2024.
Digital Chamber Statement on Binance Resolution
By Perianne Boring:
The recent resolution between Binance and U.S. regulatory authorities represents a significant milestone for the cryptocurrency industry. Culminating after extensive investigations, this resolution mitigates risks and dispels uncertainties within the sector. It provides investors with enhanced confidence in the stability of the world’s largest cryptocurrency exchange. Furthermore, it offers businesses within the industry clearer regulatory guidelines, enabling them to establish robust and compliant operations.
At The Chamber of Digital Commerce, we uphold the rule of law and regulatory adherence as cornerstones of the digital asset industry, and we do not shy away from unequivocally affirming our stance that all members must operate in full compliance with legal and regulatory obligations. As Binance is a valued member of our Chamber, we are dedicated to ensuring due process and uphold the significance of fair and equitable legal proceedings. We commend both Binance and U.S. regulators for their efforts in forging a path that balances innovation with responsibility, fostering a safe and sustainable environment for the digital asset ecosystem to thrive.
We remain optimistic about the future of digital assets, believing that this resolution paves the way for continued growth and innovation in a secure and compliant manner.
Digital Asset Mining is Advancing America’s Energy Security
Last week, the Digital Power Network hosted 45 C-Suite digital energy executives in Washington, D.C. Our mission was to convey a vital message to policymakers:
Digital Asset Mining is Advancing America’s Energy Security
We met with nearly 40 Members of Congress from both sides of the aisle, sharing tangible, real-world examples that underscore how the Bitcoin mining industry is playing a pivotal role in advancing America’s energy security in four significant ways: grid stability, national security, decarbonization and sustainability.
In making sure that America’s energy is secure, the Digital Power Network is proud to support House Resolution 238. This resolution signifies the sense of the House of Representatives regarding the importance of Proof-of-Work mining to the United States’ ability to achieve its energy goals and grow its economy. It marks a pivotal moment in how the Federal Government approaches Proof of Work mining—a recognition that it plays a key role in advancing energy security.
We also hosted a private roundtable on Wednesday, October 25th, where 45 C-Suite executives from the Bitcoin mining and energy sectors gathered to discuss their collaborative efforts in fostering America’s energy security. Together, we identified how Bitcoin mining aligns with energy and national security priorities, while also driving decarbonization and sustainability.
The Chamber takes great pride in the fact that the Digital Power Network had the opportunity to showcase our pioneering work in the digital energy space to Congress and leading energy companies.
To all those who attended, the Chamber extends its heartfelt thanks for contributing to an unforgettable event where we made significant strides in advancing the digital asset mining agenda in Congress.