The chair of the US Securities and Exchange Commission, Gary Gensler, has warned of widespread fraud in the cryptocurrency industry, accusing companies of disregarding laws designed to protect investors. He highlighted recent enforcement actions against crypto firms, including Binance and FTX, as evidence of the sector exploiting unwary investors.
Meanwhile, Donald Trump has made a surprising U-turn, becoming an advocate for cryptocurrency. The former president, now seeking a third term, promises to make the US the global centre for crypto innovation and has even launched his own cryptocurrency business, World Liberty Financial. It marks a stark contrast to his previous criticisms of Bitcoin, which he once dismissed as a scam.
As the US presidential elections approach, the future of cryptocurrency regulation is at a critical point. Trump’s pro-crypto stance opposes the Biden administration’s clampdown on the industry. With millions being spent on political donations, the outcome could significantly influence the direction of crypto regulation, both in the US and worldwide.
Donald Trump made headlines on Wednesday by becoming the first US president, past or present, to publicly use Bitcoin. During a visit to PubKey, a cryptocurrency-themed bar in Manhattan, Trump completed a Bitcoin transaction with the help of the bar’s staff, purchasing burgers ahead of a rally in Long Island. His public use of the Bitcoin network has further solidified his engagement with the crypto industry.
This appearance follows his recent support for World Liberty Financial, a new crypto project involving Trump and several of his children. The project, which formally launched earlier this week, plans to issue a governance token called WLFI. Trump’s involvement in the crypto space has grown significantly in recent months, as he seeks the industry’s backing in his third run for president.
Trump has been vocal in his promise to make the US the ‘crypto capital of the planet,’ as he courts the digital asset sector in his campaign. His ongoing efforts to align with the crypto community signal a strategic push to secure their support ahead of the 2024 election.
Kamala Harris has made her first public comments on cryptocurrency during her US presidential election campaign. Speaking at a Wall Street fundraiser on 22 September, Harris pledged to encourage investment in AI and digital assets while ensuring consumer protection. She also emphasised the need for consistent regulations to create a safe business environment. This marks a shift in Harris’ campaign, with many speculating on how her approach to crypto would differ from President Joe Biden’s.
Harris’ remarks have drawn attention from the crypto industry, with some viewing her comments as a positive step. However, critics, such as crypto legal experts, are wary of her focus on consumer protection, noting that it could be used to stifle the sector. Coinbase’s policy chief acknowledged Harris’ statement as significant but suggested it was less forward-thinking than Donald Trump’s pro-crypto stance. Trump, who has embraced the industry by releasing NFTs and backing his family’s crypto platform, has vowed to overhaul the current regulatory framework if elected.
Crypto has become a key issue in the upcoming election, with both Harris and Trump vying for the support of the industry. National polls show the two candidates running neck-and-neck, with Harris leading Trump by a slim margin of 2.9 percentage points.
A recent report by NFT Evening analysts reveals that 96% of over 5,000 NFT collections are considered “dead” in 2024. These collections have seen no trading activity, sales, or social media engagement for more than a week, highlighting the steep decline in the once-thriving non-fungible token market. The average lifespan of NFT collections has also shortened to just over a year, significantly less than traditional cryptocurrency projects.
2023 was a particularly challenging year for NFTs, with nearly 30% of projects collapsing, and almost half of all NFT owners facing losses. Despite this bleak outlook, some collections, such as Azuki, have still proven profitable, delivering a 2.3x return on investment for token holders. On the flip side, Pudgy Penguins holds the record for the largest drop in value, losing 97% of its worth.
Experts warn that the NFT market’s decline calls for caution among investors and suggests creators rethink their approach to project development. As the market continues to shrink, many are urging for a more sustainable and strategic direction to prevent further collapses.
Russia is planning to introduce a new tax system for cryptocurrency miners, basing it on electricity usage rather than the value of mined tokens. Deputy Finance Minister Ivan Chebeskov revealed on 18 September that the government is considering an excise tax on the electricity consumed by miners as a temporary solution before implementing a tax on their profits. The authorities have faced difficulties in calculating miners’ earnings, particularly as some do not disclose all of their wallets.
The proposed tax follows Russia granting legal status to industrial crypto mining earlier this year. Lawmakers are expected to pass legislation on the crypto mining tax by the end of the State Duma’s autumn session. The government’s long-term aim remains profit-based taxation, but electricity consumption is seen as a more practical approach for the time being, especially given the complexities of accounting in the crypto industry.
While cryptocurrency exchanges remain unregulated in Russia, there have been calls for the establishment of state-run platforms for trading digital assets. Meanwhile, Russia is positioning itself as a global leader in the crypto mining sector, with major firms such as Gazprom setting up large-scale mining operations. The country’s finance ministry expects the industry to generate substantial tax revenue by 2025.
MicroStrategy has announced an increase in its convertible note offering to $875 million, intending to use the funds to pay off existing debt and acquire more Bitcoin. It marks another bold move by the company, which is known for its aggressive Bitcoin acquisition strategy.
The raised funds will help MicroStrategy redeem $500 million of its current senior secured notes due in 2028, with the remaining amount allocated for purchasing additional Bitcoin and general corporate purposes. The company’s total reserves now hold approximately 244,800 BTC, bought at an average price of around $38,585 per Bitcoin.
These convertible notes, set to mature in 2028, will be offered to qualified institutional investors, with holders given the option to convert them into cash, shares of MicroStrategy’s Class A stock, or a combination of both.
The Swiss stock exchange, SIX, is considering launching a cryptocurrency trading platform in Europe to tap into a market traditionally dominated by Binance, OKX, and Coinbase. The move aims to attract large institutional investors, using Switzerland’s progressive crypto regulations as a selling point. Bjørn Sibbern, the global head of exchanges at SIX, noted that crypto is increasingly recognised as a legitimate asset class. The platform would likely support crypto and derivatives trading, targeting institutional players such as asset managers.
While other traditional finance firms like Deutsche Boerse and Standard Chartered have ventured into crypto, many have hesitated due to unclear regulations. Despite this, Switzerland has positioned itself as one of Europe’s most crypto-friendly nations, with robust laws governing crypto trading, asset custody, and token classification.
SIX already operates AsiaNext, a crypto derivatives venture in Singapore, and is now exploring whether a similar platform could succeed in Europe. Though the initiative is still in consideration, it could mark a significant expansion for SIX, which already runs a digital exchange and has seen success with digital bonds since 2018.
A new bill introduced by US Representative John Rose aims to foster cooperation between two major financial regulators, the SEC and CFTC, in overseeing the cryptocurrency industry. The ‘Bridging Regulation and Innovation for Digital Global and Electronic Digital Assets’ Act (BRIDGE Act) seeks to create a Joint Advisory Committee to draw expertise from agencies and private crypto industry professionals. The committee would meet twice yearly to help shape a regulatory framework that encourages innovation without compromising investor safety.
Representative Rose criticised the current enforcement-driven approach, which he believes has stifled innovation. Instead, he advocates for a more collaborative effort between regulators and private stakeholders to explore how blockchain technology can enhance traditional financial sectors. His proposal includes appointing 20 industry experts to the advisory committee, serving two-year terms.
The latest legislative move is part of a broader effort by US lawmakers to clarify how digital assets should be regulated. The SEC and CFTC have historically clashed over whether cryptocurrencies like Ethereum should be classified as securities or commodities, leading to ongoing legal disputes. While some crypto bills, like the Financial Innovation and Technology for the 21st Century Act, have faced opposition from the White House, negotiations on regulatory frameworks for digital assets are ongoing.
The framework ensures that America’s core democratic values are respected in the development of digital assets. It also lays out how the USA should achieve its objectives through international engagements with partners such as the G7 and G20, the Financial Stability Board (FSB), the Financial Action Task Force (FATF), the Organisation for Economic Cooperation and Development (OECD), the International Monetary Fund (IMF), multilateral banks, etc.
