CrossTower & Industry Participants get Together to Reach out to Treasury
December 16th, 2020
The Honorable Steven Mnuchin
Secretary of the Treasury
U.S. Department of the Treasury
1500 Pennsylvania Ave., NW
Washington D.C. 20220
Dear Secretary Mnuchin,
We are writing on behalf of the Global DCA, its members, and the other industry participants listed below. This letter is in reference to the letter by Reps. Warren Davidson (R-Ohio), Tom Emmer (R-Minn.), Ted Budd (R-N.C.), and Scott Perry (R-Penn.) dated December 9, 2020 to the Department of the Treasury. In this letter, the members of Congress ask Treasury to consult with Congress before issuing new regulations that restrict the use of digital self-hosted wallets.
In the event that Treasury is considering publishing an Interim Final Rule (IFR), we request that you reconsider. In general, agencies such as Treasury are required to publish a proposed rule which is subject to public comment and, after consideration of the diverse perspectives, a final rule is published. However, if an agency believes there is “good cause,” it can issue an “interim final” rule where it holds a post promulgation comment period. An interim final rule is effective immediately upon publication and it may be modified, but only if Treasury is persuaded by any of the comments.
The wonderful aspect of the regulatory framework in the United States is that it encourages public engagement during the rulemaking process, which improves the quality of our regulations. Public comment, particularly in a new and complex area technology such as digital assets, offers the opportunity for all stakeholders, not just lawmakers, to participate in the drafting and refining of laws. The transparent character of our rulemaking process is one that distinguishes our country from others.
The industry would like to work with the regulators to help shape suitable regulation that is fitted to the evolving state of technology. FinCEN, OCC, LabCFTC and the SEC’s Strategic Hub for Innovation and Financial Technology (FinHub) – which recently became a standalone office – are examples of partnership and engagement of this front, helping to oversee the developments of standards while our regulations evolve to meet this new market’s needs.
We are concerned about the unintended consequence of bifurcating an already fragmented market and driving more actors into areas that are difficult to trace. On behalf of that growing industry, we ask that you postpone any short-term restrictions on the crypto market that may limit our global, long term opportunities.
We are also deeply concerned about the potential publication of this IFR and the possible unintended consequences for American businesses – especially with regard to U.S. employment.
Close to 1/4 of cryptoasset firms have sustained an annual growth in employment level above 10% (between 2016-2019) qualifying them as “High Growth Companies.”1 As such, the industry offers significant opportunity for job creation, financial sector development and economic growth for the U.S.
Further, we are keenly aware of the geopolitical issues surrounding the industry, and the need for thoughtful leadership. As a part of the consideration of any upcoming rules or regulations, we strongly urge an open and inclusive discussion on the global security concerns and potential for ramifications to the U.S. standing in the emerging global digital economy.
We are extremely respectful of regulations and we each hold the core principle of consumer protection and protection of the broader public. We would like to have the opportunity to meaningfully comment on any proposed rules that Treasury is considering. We have exceptional contributors from throughout the digital asset industry, and we would like to help in any capacity we can. We are kindly asking Treasury to follow the traditional rulemaking process that allows industry to provide input about the appropriate way in which regulations should develop in this young industry. We are immediately available to discuss these matters with Treasury.
Board Member and Chair of the Policy & Regulation Committee, Global-DCA Co-Signatures
Ariana Pretto-Sakmann, General Counsel, Genesis Global Trading
Annemarie Tierney, Principal, Liquidity Advisors, Inc.
David Brill, Principal, Brill Advisors
Jonathan Johnson, CEO, Overstock.com
Kristin Boggiano, President, CrossTower, Inc.
Igor Telyatnikov, CEO, AlphaPoint
Gabriella Kusz, Board of Directors, Global Digital Asset & Cryptocurrency Association Ben Van Vliet, Associate Professor, Director of the Center for Strategic Finance @ IIT Stuart School
Jonathan Johnson, President, Medici Ventures
Andrew Yeung, General Counsel, Paxful, Inc.
Stephen Gardner, CCO and General Counsel, Zero Hash LLC
James Morgan, General Counsel, BitGo
Alan Konevsky, Chief Legal Officer, tZERO Group, Inc.
1 Cambridge Center for Alternative Finance, University of Cambridge Judge Business School, “3rd Global Cryptoasset Benchmarking Study.” https://www.jbs.cam.ac.uk/faculty-research/centres/alternative-finance/publications/3rd global-cryptoasset-benchmarking-study/
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