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The Chamber of Digital Commerce commends the Committees for their collaborative efforts in developing a comprehensive legal framework that establishes clear regulations for digital assets and positions the United States as a global leader in blockchain technology. 

The current approach of regulating through enforcement is no longer sustainable and is driving American innovation and intellectual property overseas. This poses a significant threat to our national security, as we risk losing our technological superiority to other nations. 

The Market Structure bill addresses the prevailing uncertainty surrounding regulatory jurisdiction and strives to create a transparent pathway for companies to introduce registered and regulated digital asset products to the market, ensuring the protection of investors. 

We express our appreciation for the diligent work undertaken by the Committees and value the opportunity to actively engage in the legislative process. The Chamber, along with our members, remains committed to supporting lawmakers in the formulation of digital asset policies in the United States. 

Thursday, June 8, 2023

Hire will accelerate expansion and strategic projects for premier trade group.

Washington, D.C. — The Chamber of Digital Commerce, the leading trade association advocating for the digital asset and blockchain industry, announced today that Alex Chizhik has joined the organization as its Chief Operating Officer.

“We are delighted to have Alex join our team. His expertise in operations, strategic planning, and scaling organizations will be invaluable as we work to accelerate the Chamber’s influence with lawmakers and our industry,” said Perianne Boring, Founder and CEO of the Chamber of Digital Commerce. “I look forward to working with him and seeing the impact he will have on the Chamber’s growth and success.”

Mr. Chizhik brings a proven track record of success in leading high-performing teams and scaling organizations. Most recently, he served as the Chief Operating Officer and Chief Revenue Officer of HarrisX (the top technology research company in the U.S.) and Global Head of Listings and Global Head of Public Affairs at Okcoin (a top U.S. regulated digital asset exchange).

“I am in awe of what Perianne and her team have created over the last ten years and am thrilled to join her and the Chamber of Digital Commerce,” Chizhik said. “The Chamber is rightly considered the premier trade group in educating policymakers about the digital asset ecosystem and advocating the necessary policies digital assets and blockchain need to grow. I look forward to playing a role in growing that influence and shaping the ongoing, productive dialogue with lawmakers and digital asset CEOs.”

Alex Chizhik’s role will include streamlining the operations of the Chamber and partnering with Ms. Boring to develop and take to market a series of strategic initiatives the Chamber will be rolling out over the next few months that are crucial to digital asset and blockchain innovation and growth. Stay tuned.

About the Chamber of Digital Commerce:

Founded in 2014, the Chamber of Digital Commerce is the original and preeminent digital assets trade association. With over 200 blue-chip members, the Chamber of Digital Commerce’s mission is to advance the United States’ interests in digital innovation, freedom, and adoption of digital assets and blockchain-based technologies. We work relentlessly to educate and assist policymakers and regulatory agencies, while advocating for the industry. Our goal is to develop a pro-growth legal environment that fosters innovation, jobs and investment.

To join the Chamber, please contact us at: info@digitalchamber.org or visit us at: https://digitalchamber.org/.

Today, the Chamber of Digital Commerce submitted comments to the Financial Accounting Standards Board’s (FASB) Accounting Standards Update (Subtopic 350-60) Accounting for and Disclosure of Crypto Assets. For nearly a decade, the Chamber of Digital Commerce has advocated for setting clear accounting disclosure rules for crypto assets and this draft proposal gets us one step closer to the clarity our industry deserves. 

We are extremely appreciative of FASB’s willingness to collaborate with the Chamber and our membership to get to this point and we commend the Board’s efforts on these proposals and look forward to getting these rules over the finish line. 

“Clear and common-sense accounting and disclosure rules for crypto assets are essential to ensure transparency, protect investors, maintain market integrity, and promote the healthy development of the digital financial ecosystem,” said Perianne Boring, Founder and CEO of the Chamber of Digital Commerce. “ 

The proposed rules aim to better reflect the economics of the technology by measuring crypto assets at fair value, potentially reducing the cost and complexity associated with applying the current cost-less-impairment accounting model. 

The proposed rules would apply to crypto assets that meet all of the following criteria:

1. Meet the definition of intangible asset, which is defined as an asset that lacks physical substance. 
2. Do not provide the asset holder with enforceable rights to, or claims on, underlying goods, services, or other assets
3. Are created or reside on a distributed ledger based on blockchain technology
4. Are secured through cryptography
5. Are fungible
6. Are not created or issued by the reporting entity or its related parties.

What’s next?

The Financial Accounting Standards Board (FASB) follows several steps in its process of creating or updating accounting standards, including issuing an Exposure Draft. Now that the public comment period is closed, here are the steps FASB will take before updating the standards:

1. Review of Comments: After the comment period closes, FASB reviews and analyzes all feedback received from stakeholders. This feedback often comes from a wide range of sources, including businesses, auditors, industry groups, and academics.
2. Redeliberation: The FASB will consider all received comments and discuss them in public meetings. This process, known as redeliberation, can result in revisions to the proposed standard.
3. Issuance of Final Standard: If the FASB decides to proceed after considering public comments and conducting redeliberations, it issues a final Accounting Standards Update (ASU). This update represents the official, authoritative standard that entities must follow.
4. Implementation and Post-Implementation Review: After a new standard is issued, there is typically a period of time before it becomes effective, allowing entities to prepare for and implement the new guidance. FASB may also conduct a Post-Implementation Review (PIR) to assess whether the new standard is achieving its intended purpose.

The Chamber of Digital Commerce filed an amicus brief in Wahi asserting that the SEC has failed to give sufficient guidance on which digital asset transactions should be deemed ‘securities transactions,’ and that this SEC litigation is a misguided exercise in regulation by enforcement, which could significantly harm sectors of the digital asset industry and the investing public itself. We also noted that the SEC’s efforts are occurring at a time when the agency’s authority to regulate digital assets is being questioned by Congress.

While we appreciate that the SEC has agreed to abandon this dispute without any admission by the Wahi defendants that the digital assets themselves are securities under U.S. law, the crucial matters the Chamber raised in its amicus filing remain unresolved. Our industry requires certainty and clarity in the regulatory space, rather than enforcement actions that further undercut confidence and raise more questions among innovators and investors.

We are thrilled to share the exciting news that the Chamber of Digital Commerce has once again been granted membership in the Financial Crimes Enforcement Network’s (FinCEN) Bank Secrecy Act Advisory Group (BSAAG) for another three-year term. This renewal reaffirms our position as the leading digital asset organization representing the industry’s interests in crucial regulatory discussions.

We are honored to be the only digital asset-focused member organization selected to participate in the BSAAG, a prestigious group that advises FinCEN on anti-money laundering (AML) and counter-terrorist financing (CTF) matters. This opportunity provides us with a unique platform to advocate sensible and effective policies that promote the growth and innovation of the digital asset ecosystem, while ensuring compliance with necessary regulatory measures.

Our continued presence in the BSAAG underscores the Chamber’s commitment to fostering dialogue and collaboration between the public and private sectors. As the digital asset landscape continues to evolve rapidly, it is crucial that our industry has a seat at the table where decisions impacting our members and the broader public are made. By actively engaging in discussions and sharing our industry expertise, we aim to shape policies that strike a balance between protecting against illicit activities and enabling the responsible development of digital assets and blockchain technology.

Our renewed membership in the BSAAG also serves as a testament to the Chamber’s unwavering dedication to driving positive change within the digital asset industry and affirms our standing with policymakers as a reliable and trusted voice for our industry Together, we will navigate the evolving regulatory landscape, shaping policies that embrace innovation and foster the growth of a responsible and compliant ecosystem.

Bank Secrecy Act Advisory Group (BSAAG)

BSAAG was created to provide FinCEN with advice and recommendations on matters related to the Bank Secrecy Act (BSA), AML, and CTF efforts in the United States.

The BSAAG is composed of representatives from various stakeholders including financial institutions, trade associations, law enforcement agencies, regulatory bodies, and other organizations involved in combating financial crimes. The members are selected based on their expertise and knowledge in AML/CTF matters.

The mission of the BSAAG is to foster public-private cooperation, enhance information sharing, and promote effective implementation of AML/CTF measures. It aims to strike a balance between preventing illicit activities such as money laundering and terrorist financing while minimizing the burden on financial institutions and encouraging innovation in the financial sector.

On May 5, 2023, New York Attorney General Letitia James introduced the Crypto Regulation, Protection, Transparency and Oversight (CRPTO) Act (the “bill”). We commend the Attorney General for prioritizing cryptocurrency regulation with the aim of protecting consumers and investors. However, as advocates for a balanced approach to cryptocurrency regulation, we have significant concerns about the bill. 

The bill lacks clear guidance on essential regulatory questions, such as the distinction between securities and commodities in the crypto realm. Without clear definitions and rules in this area, businesses and investors are left to navigate a regulatory gray area, creating uncertainty and discouraging both domestic and foreign investment in New York’s cryptocurrency market.

Additionally, the bill’s imposition of broad rule-writing authority to the Attorney General raises concerns about over centralization of power and a potential lack of checks and balances in the regulation of this vital industry.

Moreover, The CRPTO Act, in its current form, imposes extensive requirements on a wide range of parties involved in digital asset transactions, from issuers and brokers to investment advisers and even social media influencers. Such broad regulation risks stifling innovation and inhibiting the growth of a sector that has the potential to transform financial services, create jobs, and promote economic growth. These new rules, including extensive registration, disclosure, audit, and business conduct stipulations, could disproportionately impact startups and smaller businesses that are essential to industry innovation but lack the resources to navigate this new regulatory landscape.

Lastly, the bill’s mandate for digital asset intermediaries to reimburse customers for unauthorized and fraudulent transfers might seem like a beneficial consumer protection measure at first glance. However, it could lead to significant financial burdens on companies operating in the crypto space and could drive businesses away from New York State, hurting the local economy and the state’s reputation as a hub for fintech innovation.

While we agree with the goal of creating a safe and transparent environment for cryptocurrency transactions, we urge lawmakers to reconsider the breadth and depth of the CRPTO Act. A more balanced approach would provide clear guidelines, encourage compliance, promote innovation, and ensure that New York remains at the forefront of the digital asset revolution.

Summary of the Legislation

Status: As of May 2023, the bill’s prospects for passage in the New York State Legislature remain uncertain. However, the Attorney General’s press release announcing the draft bill has received positive commentary from numerous political figures, state legislators, and consumer protection advocates​.

The Crypto Regulation, Protection, Transparency, and Oversight (CRPTO) Act proposed by New York Attorney General Letitia James on May 5, 2023, aims to regulate all aspects of the cryptocurrency industry. Here are the key takeaways from the bill:

1. Comprehensive Regulation: The CRPTO Act proposes a broad set of measures to regulate the entire cryptocurrency ecosystem. It seeks to expand New York’s oversight of crypto enterprises conducting business in the state, particularly concerning privacy and cybersecurity matters.

2. Definition of Digital Assets: The bill defines “digital asset” expansively, including any type of digital unit, such as a cryptocurrency, coin, token, virtual currency, or anything that can be used as a medium of exchange, a form of digitally stored value, or a unit of account. The definition also covers digital units that have a centralized repository or administrator, are decentralized, or can be created or obtained by computing or manufacturing effort, with certain exceptions for tokens used in online gaming, sports wagering, customer loyalty programs, and other favored uses.

3. Impact on Various Parties: The CRPTO Act includes provisions that would affect a wide range of parties involved in digital asset transactions. This includes issuers, brokers, investment advisers, marketplaces, and even social media influencers. The bill imposes extensive registration, disclosure, audit, and business conduct rules.

4. Rules for Brokers and Intermediaries: Under the proposed legislation, digital asset brokers would be required to maintain net capital similar to securities broker-dealers. Additionally, digital asset intermediaries would have to reimburse customers for unauthorized and fraudulent transfers.

5. Restrictions on Practices: The bill proposes to outlaw several common practices in the crypto industry. For example, it would prohibit cross-ownership of digital asset issuers, marketplaces, brokers, and investment advisers; borrowing or lending customer assets; certain trading strategies; and self-custody of digital assets. It would also restrict the use of the term “stablecoin” to describe or market digital assets unless they meet narrow criteria.

6. Cybersecurity Requirements: The bill mandates that every digital asset issuer, broker, marketplace, and investment adviser must establish, implement, and maintain a cybersecurity program that complies with state and federal data privacy and cybersecurity laws.

7. Verification of Digital Asset Software Code: Digital asset marketplaces would have an additional responsibility to ensure that the digital asset software code aligns with the issuer’s disclosures to purchasers and contains security properties that comply with state and federal laws.

8. Enhanced Enforcement and Anti-Fraud Measures: The CRPTO Act proposes new enforcement authority and an anti fraud statute for the Attorney General. If passed, it would grant the Attorney General extensive rule-writing authority.

It’s a rare moment in public policy history when an industry and large industry players have for years – and fairly consistently – asked a federal agency that may have oversight to actually do its job and create a policy framework for them. It’s even rarer when that agency essentially says, “Yeah, maybe we’ll get to that.” But that’s what the digital asset industry has been seeking from the Securities and Exchange Commission (SEC), and that’s what the SEC just told Coinbase in a court filing. 

The Chamber of Digital Commerce firmly believes in fostering an environment that enables innovation to thrive and ensures impartial regulatory treatment for all participants in the digital asset industry. As the world’s leading blockchain and digital asset trade association, we stand in solidarity with Coinbase in their ongoing legal battle against the Securities and Exchange Commission (SEC). 

Coinbase, as one of the most prominent players in the digital asset ecosystem, has made significant contributions to the growth and development of this transformative industry. We commend their commitment to compliance, consumer protection, and fostering a secure platform for users. Coinbase’s proactive engagement with regulators and its focus on establishing robust compliance frameworks have set a commendable example for the entire industry.

This support for a strong policy framework stands in stark contrast to the SEC, which claims to regulate an industry for which it stubbornly refuses to set clear and certain policies. The recent legal scrutiny by the SEC also raises concerns about the impartiality of regulatory treatment and the potential chilling effect it may have on innovation. Regulation by enforcement is an abdication of a regulatory body’s mission: to engage in fair and transparent processes that encourage a fair, well-functioning market, provide clarity, and foster a regulatory environment that promotes innovation while safeguarding investor interests.

We urge the SEC to exercise fair and balanced judgment in their interactions with digital asset companies, including Coinbase, and to ensure that regulatory actions are guided by a clear understanding of the unique characteristics and potential of this rapidly evolving industry. A well-regulated digital asset ecosystem can unlock immense opportunities for economic growth, job creation, and financial inclusion.

The Chamber of Digital Commerce remains committed to working collaboratively with policymakers, regulators, and industry stakeholders to foster a regulatory landscape that strikes the right balance between consumer protection, market integrity, and innovation. We believe that by joining forces and championing common-sense policies, we can help shape a vibrant digital asset industry that benefits all participants and positions the United States as a global leader in this crucial sector.

We stand with Coinbase and any entity that advocates regulatory fairness and works towards the advancement of common-sense policies that allow innovations to flourish in the United States.

The proposed tax on electricity use by crypto mining companies is not about environmental concerns; rather, it is a misguided attempt to stifle innovation in an industry that uses less than 1% of United States electricity. Crypto mining is an industry that creates new jobs, spurs the transition to renewable energies, and lays the foundation for alternative financial opportunities for the under- and unbanked. Discouraging mining in the United States would increase emissions elsewhere, in countries and regions where energy sectors are much less regulated and responsible than the United States. Therefore, energy security is national security, and it is essential that we develop this technology at home and not allow this leadership opportunity to go abroad.

At a Senate EPW hearing in March, Senators Ricketts and Lummis both highlighted that energy production is already one of the most regulated industries in the world at the point of generation. Mining is an end-user of power purchased in fair and open markets, much like electronic vehicles, and this tax would be a significant overreach by the government picking winners and losers in the market and determining which Americans may purchase and use energy resources for business operations.

Instead of penalizing crypto mining companies, policymakers have the opportunity to work with industry leaders on innovative solutions that will reduce energy consumption while allowing for continued growth and development of the industry.

As originally published in Blockworks.

In today’s deeply polarized political environment, it is rare to find common ground between Democrats and Republicans on almost any issue. 

However, there is an emerging technology that could bring these two sides together: blockchain, the foundation of digital assets and cryptocurrencies like Bitcoin and Ethereum. 

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To fully harness the potential of this groundbreaking technology, it is crucial that crypto legislation be crafted with bipartisan support. Cryptocurrency should provide a rare win-win in Washington. 

The crypto industry needs legislation to provide regulatory clarity — and Congress needs a showing of bipartisanship to make that happen. 

Finding common ground

At first glance, crypto may not seem like an area of common interest for the two parties, especially with a leading figure in the Democratic party raising an “anti-crypto army.”

Democrats tend to prioritize social equity, workers’ rights, and environmental protection, while Republicans generally advocate for limited government intervention, free markets, and individual liberties. However, a closer examination of what blockchain technology offers shows that it can actually appeal to both parties and their priorities.

For Democrats, blockchain technology has the potential to empower labor unions and protect workers’ rights. 

By leveraging the transparency and security of blockchain, unions can develop tamper-proof voting systems, ensuring that every member’s voice is heard and respected. Additionally, blockchain can be used to create smart contracts that provide clear, enforceable terms for employment, reducing the possibility of exploitation and unfair practices. As a decentralized and trustless system, blockchain can also help to eliminate corruption within unions, giving workers greater confidence in their representatives.

On the other side of the aisle, Republicans can appreciate blockchain technology for its inherent decentralization and trustless environment. By removing the need for central authorities and intermediaries like big government, blockchain empowers individuals to conduct transactions directly with one another, fostering innovation and economic freedom. This reduced reliance on centralized institutions aligns with core Republican values of limited government intervention and individual autonomy.  

It is essential that any crypto legislation be crafted with bipartisan cooperation. This will not only ensure that the resulting laws strike a balance between innovation and regulation, but also send a strong message that the United States is committed to leading the way in the blockchain revolution without sacrificing consumer protection.

As the two parties come together to develop comprehensive crypto legislation, it is important to consider several key ideas. While Republicans and Democrats may prioritize each issue differently (e.g., Republicans and competitiveness; Democrats and inclusivity), it is imperative that legislation prioritizes each principle equally.

1. Preserving U.S. competitiveness: Bipartisan collaboration on cryptocurrency and blockchain legislation can keep the US at the forefront of financial innovation. There needs to be a balance of Republican principles of narrowly tailored light-touch regulation to attract businesses with Democrat’s desires for government policies that help retain talent as well as protect consumers. 
2. Foster Inclusivity: Crypto and blockchain technology will not solve the broad issue of financial inclusion. However, these technologies provide an option to increase access and opportunities for wealth creation for those who face accessing traditional financial services. Legislation can bridge the gap between the unbanked and traditional financial services by balancing Republicans’ desire to embrace private sector innovation with Democrats’ advocacy for policies that ensure equal access and address the digital divide. 
3. Preserve National Security: If the U.S. continues to delay creating rules and regulations, the rules will be made for us. Technology that can impact that way we transact should not be shunned, but instead embraced and innovated incessantly. Ensuring national security in the context of cryptocurrency requires a united approach, made possible by utilizing Republican’s focus on preventing illicit activities such as money laundering and terrorism financing, and Democrat’s emphasis on international cooperation and integrating digital assets into existing regulatory frameworks. 

By working together, Democrats and Republicans can craft balanced, effective crypto legislation that harnesses the transformative power of blockchain technology for the benefit of all Americans without sacrificing consumer protection. In doing so, both parties will not only foster innovation and economic growth, but also demonstrate that it is still possible to find common ground in today’s divided political landscape.