Law Decoded: Joe Biden’s executive order is finally upon us, and it doesn’t look too dreadful, March 7–14.
As Russia’s self-styled “special operation” against Ukraine continues, crippling economic sanctions remain the Western powers’ primary weapon to counter Russia’s military actions without triggering an even more dramatic escalation. As NATO and allies’ financial offensive unfolds, ensuring that the collective West presents a united front remains political leaders’ chief concern. The global crypto industry keeps getting suspicious looks as some agents of state power are seemingly entrenched in their beliefs that digital assets could be the weak spot undermining the efficiency of the sanctions push. Despite ample evidence to the contrary — including the FBI director’s Congress testimony — there are signs of increased regulatory pressure on the crypto industry participants, as well as policy initiatives that clearly capitalize on the situation to tighten state control of digital assets’ circulation.
Few of those who follow the developments in the crypto policy space were surprised to learn that United States Senator Elizabeth Warren was hard at work drafting a bill that would impose additional disclosure requirements on crypto exchanges. According to some observers, the military conflict could also have contributed to U.S. President Joe Biden finally authorizing the long-anticipated executive order on digital currencies.
Whole-of-government effort ordered
There are two mutually exclusive views on the relationship between the timing of Biden’s executive order’s issuance and the war in Ukraine. One is that the directive had been ready to drop in mid to late February and that the administration’s preoccupation with the conflict pushed the release several weeks back. Another is that concerns over the enforcement of anti-Russia sanctions triggered an earlier release of the document that could have otherwise sat on the president’s desk for even longer. At any rate, the hotly anticipated EO descended on the crypto industry to an overall favorable reception. Many of the sector’s stakeholders and advocates were left generally content with the lack of restrictive language or superfluous emphasis on crypto-related risks. The key theme of the order is the consolidation of the government’s efforts to address the new financial reality within the scope of each agency’s jurisdiction. At least 14 separate reports looking into crypto-related matters from various agencies will be ordered, with most of them expected to be delivered within 90 to 180 days. Overall, the executive order will likely pave the way for a more focused and coordinated federal oversight of the digital asset domain.
EU wobbles on proof-of-work
On March 14, the European Parliament is slated to vote on a key piece of crypto legislation: The Markets in Crypto Assets, or MiCA, regulatory framework. One of the biggest points of contention present in the latest draft has been the provision that many observers interpreted as a route for banning proof-of-work (PoW) mining on environmental grounds. It seemed as if the threat had blown over as German member of parliament Stefan Berger announced last week that the final draft would not include the gnawing clause. Mere hours before the vote, however, it emerged that the language of crypto mining’s required “minimum environmental sustainability” has made it back to the bill’s text. The worst-case scenario appears to be on the table as some European regulators seem bent on going all the way in their crusade against PoW mining.
Crypto breaks the tie in Korea
In a tight race that has been reportedly decided by a margin of less than 1% of the vote, crypto-friendly candidate Yoon Suk-yeol has been elected to serve as the next president of South Korea. The candidates’ stances on digital asset regulation could very well have been the tiebreaker. With crypto being a hot political topic throughout the past year, both Yoon and his opponent, Lee Jae-myung, have articulated crypto-friendly stances on the campaign trail. Yoon’s promises to deregulate the digital asset industry and facilitate the fintech sector’s development into a regional powerhouse might have resonated with the younger South Korean voters more powerfully than Lee’s platform.