GENIUS Act Regulating Stablecoins Passes Senate, Moves to House

Senate Passes Stablecoin Bill in Big Win for Crypto Industry

The Senate passed legislation to regulate a widely used type of cryptocurrency, a key victory for the digital-asset industry after it poured money into last year’s election.

The bill, the first of its kind to put federal guardrails on digital currencies, sets up oversight of stablecoins, a popular crypto asset typically pegged to a government currency such as the U.S. dollar. That peg keeps their price steady, making them attractive to traders looking for a store of value while they buy and sell more volatile cryptocurrencies. Stablecoins can also be used for cross-border payments.

Known as the Genius Act, the bill passed the Senate 68-30. It now moves to the House, where passage is viewed in Washington as likely but could take time. President Trump has said he wants to sign stablecoin legislation before Congress’s August recess.

An unprecedented display of SEC staff exercising ultra vires law enforcement power

If you thought recent Supreme Court defeats and an election might bring fairness and accountability to the rubber-stamp administrative adjudication system at the U.S. Securities and Exchange Commission, think again.

There appear to be only a few administrative enforcement cases currently pending before the SEC’s administrative law judges, compared to many dozens a decade ago. (See here for more: https://lnkd.in/eSi3FR3W) But if you’re not paying close attention to these cases, you’re missing an unprecedented display of staff exercising ultra vires law enforcement power under false claims of “delegated authority”—essentially the SEC’s version of an autopen.

In the case I’m involved with, we caught the Enforcement Division red-handed filing an unauthorized, ultra vires federal lawsuit in late April to enforce a subpoena issued by an SEC ALJ. A mere week after the New Civil Liberties Alliance called out this unlawful act, the Division abruptly withdrew the unapproved lawsuit. It’s unclear whether the SEC Commissioners are even aware of this round-trip fiasco perpetrated in their name.

But it wasn’t just the fake SEC lawsuit that was ultra vires….

Alt data manipulation

We talked yesterday about the wait time for delivery from pizzerias near the Pentagon, which arguably predicted Israel’s attack on Iran, and which more generally is arguably correlated with oil prices. The busier those pizzerias are, the busier the Pentagon probably is, which probably means some geopolitical stuff is going down, which probably means oil prices are going up. None of those things is absolutely true. Maybe some unrelated business near the Pentagon needed a lot of pizzas; maybe the Pentagon’s softball championship is that day; maybe the geopolitical stuff will reduce the price of oil. But it would not be shocking if there is some positive correlation.

I, like, one-quarter-jokingly suggested that hedge funds should pay for a direct data feed of Pentagon pizzeria wait times, since that would be a valuable signal to their commodity trading models. Fine.

Three readers independently emailed me with variants on what in retrospect is sort of an obvious question, which is: “Is it market manipulation to order like 200 pizzas to an office near the Pentagon, and then buy calls on oil?” A few points….

Coinbase eyes Wall Street’s turf with tokenized stocks, if the SEC allows it

After dodging a high-stakes lawsuit under former President Joe Biden’s SEC, Coinbase is now pushing the envelope. In an interview with Reuters, Coinbase’s chief legal officer Paul Grewal said the crypto exchange is seeking formal regulatory approval to offer tokenized equities.

While Grewal stopped short of confirming whether Coinbase has submitted a formal request, he said the initiative is a “huge priority” and contingent on a no-action letter or similar exemptive relief from the SEC. If approved, the move would pit Coinbase directly against entrenched retail brokerages like Robinhood and Charles Schwab, marking its boldest incursion yet into mainstream finance.

At stake is more than just a new product line. Coinbase’s push into tokenized equities would mark the first serious attempt to bring Wall Street onto the blockchain under the Trump-era SEC, which has adopted a noticeably softer stance toward crypto firms.

Crypto analytics firm TRM Labs says 99% of stablecoin activity in 2024 was ‘licit’

Crypto analytics firm TRM Labs said that 99% of stablecoin activity in 2024 was “licit,” according to its latest estimates in a report on Tuesday. This is particularly notable considering that TRM also claims that stablecoins now represent over 60% of all crypto transaction volume, an indication that crypto’s association with criminal elements has been — at least — slightly overblown.

TRM Labs is not the only firm to report the increasingly legitimate use of stablecoins. Research firm Artimas has also recently found that business-to-business transfers now represent the largest and fastest-growing percentage of transaction volumes, surpassing peer-to-peer payments.

Goldman Ditches Ban on SPACs as Blank-Check Firms Stage Comeback

Goldman Sachs Group Inc. is wading back into the market for SPACs three years after stricter regulatory scrutiny prompted a self-imposed ban on handling so-called blank-check companies.

The investment bank is once again open to underwriting new deals for special-purpose acquisition companies, according to people with knowledge of the matter. The firm will evaluate potential deals on a case-by-case basis and may limit the sponsors it works with, one of the people said, asking not to be identified discussing private matters.

The decision marks a reversal from 2022, when the bank pulled out of working with most of the SPACs it took public and also stopped work on new US SPAC issuance….