Is “Tough on Bitcoin” Now a Losing Position?

The Bitcoin President

Regulators from the traditional financial oversight agencies have attempted to choke it off, demonize its proponents and basically ostracize it from polite society and any sort of legitimate on-ramps. They view innovations in the space as extra-legal attempts to make an end-run around established securities laws. They view their role as crypto antagonists as being necessary to protect ordinary investors who might otherwise have their money stolen from them.

The thing is, no one really cares. This animosity toward the asset class has not helped them in any way, shape or form. You don’t get elected or reelected for being hostile to crypto. You don’t raise money. You don’t win points on Twitter. You don’t get featured in primetime on the cable news networks. “Tough on Bitcoin” is a loser position. Everyone gets this now.

As I mentioned earlier this summer, there is no anti-crypto constituency outside of some lawyers and regulators inside the Beltway. Literally no one else cares. They may not trust crypto currencies or want to be involved with them, but they certainly do not get animated by their existence or start writing checks to the politicians who want to eradicate the space.

Trump to Pick Regulators Who ‘Love’ Crypto, Pledges to Fire SEC Chair

The assembled crowd cheered loudly as Trump said he would fire SEC Chair Gary Gensler, whose term is not up until 2026. If he wins the presidency, Trump would have significant sway over the top regulators for the burgeoning industry.

“We will have regulations, but from now on, the rules will be written by people who love your industry, not hate your industry,” Trump said.

Democrats Pushing Harris Campaign for ‘Reset’ on Crypto Stance, House Rep Says

U.S. Vice President Kamala Harris “understands” crypto and may embrace it as an issue in her nascent campaign for the White House, Rep. Wiley Nickel (D-NC) said at the Bitcoin Nashville conference on Saturday.

“We had a total reset of the presidential election,” Nickel said, adding “we’ve been working hard to get a reset from Vice President.”

The comments come as twenty-eight democratic officials, including a dozen or so members of the House, pressed party leaders for a “reset” on crypto policy, Nickel said. Some factions of the party are pressing the Harris campaign to come out in favor of crypto, Nickel said.

Negative Trading in Congress

We previously have investigated short selling in several empirical settings, including “negative activism” that targets companies. In our most recent study, we turn to short selling by members of Congress – “negative trading in Congress” – a controversial topic that might seem more appropriate for a blockbuster film than for academic study.

Yet we show that truth is as strange as fiction: Congressional negative trading is not only common but is associated with positive abnormal financial returns. Simply put, when members of Congress bet on stock price declines, they make money. In contrast, we do not find a similar association for long positions taken by members of Congress. There exists an asymmetry between “positive” versus “negative” Congressional trading.

As we document for the first time in the literature, negative trading by members of Congress is widespread….

AI: Are Boards Paying Attention?

In the wake of a number of shareholder proposals, as well as first-of-their-kind enforcement actions and public statements by the U.S. Securities and Exchange Commission, many companies are considering how their use of artificial intelligence and the associated risks should be overseen and managed by the board.

A recent report by proxy advisor Institutional Shareholder Services analyzed S&P 500 company proxy statements filed between September 2022 through September 2023. ISS found that over 15% of companies filing those proxy statements disclosed board oversight of AI, including 38% of companies in the Information Technology sector and 18% of companies in the Health Care sector….

***

ISS concluded that AI’s expansion will likely cause institutional investors to expect companies, particularly those in industries heavily impacted by AI, to establish appropriate processes for board oversight of AI risks and opportunities, including disclosure of “relevant board skills and oversight responsibilities.”

Should Jarkesy Trigger SEC Penalty Refunds?

So, what now happens to all those penalties the SEC unlawfully confiscated? Shouldn’t the agency have to give it all back to the people and businesses who paid those penalties? After all, even the IRS has a process to seek refunds of certain tax penalties that were erroneously imposed, and in limited circumstances even where there was no error….

***

If the feds can proactively refund even lawfully collected tax penalties on that massive a scale, then refunding a much smaller number of unlawfully collected SEC penalties ought to be a piece of cake, not to mention the honorable thing to do. Right?

Don’t count on it. That’s not how the SEC rolls.