Crypto CEOs’ big Washington debut
By KATE DAVIDSON and AUBREE ELIZA WEAVER
12/08/2021 08:00 AM EST
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Have you really arrived in Washington until you’ve been called before a congressional committee?
Testifying on Capitol Hill isn’t any CEO’s idea of a good time.
Securities and Exchange Commission, Carl Hoecker leads investigations into wrongdoing by agency staff. In one case, however, it was Hoecker himself who was under an investigation – one that concluded in 2019 with a recommendation that the agency consider firing him for ‘serious misconduct,’ government records reviewed by Reuters show.
“The agency instead decided in May 2020 to suspend Hoecker without pay temporarily, for an undisclosed period. He’s back on the job as the Wall Street regulator’s internal watchdog.”
GENSLER WARNS EXECS AGAINST USING SPACS TO SHIRK RULES — Bloomberg’s Benjamin Bain: “Securities and Exchange Commission Chair Gary Gensler is warning companies against seeking a tie-up with a blank-check company as a less arduous path to going public.
Gensler signaled at an event Tuesday for business executives that Wall Street’s main regulator is on the lookout for firms that want to use special purpose acquisition company mergers to sidestep red tape associated with traditional initial public offerings.”
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Senator Elizabeth Warren, among others, has called for a governmental crackdown on the volatile sector, as some progressives have grown increasingly suspicious of Bitcoin and the hazards it may pose.
Alesia Haas, the CFO of Coinbase Global, will be one of the witnesses at the meeting, which will focus on “the hurdles and rewards of financial innovation,” according to the committee announcement.
The hearing will also feature Jeremy Allaire, CEO of Circle, Sam Bankman-Fried, CEO of FTX Trading, Chad Cascarilla, CEO of Paxos, and Dennelle Dixon, CEO of the Stellar Development Foundation.
Brian Brooks, the current CEO of Bitfury and a former top banking regulator under the Trump administration, will also testify.
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USD 0.63, Increasingly Bearish Panel Predicts
A panel of crypto industry players surveyed by comparison website Finder.com has predicted that Cardano’s native token ADA could reach USD 0.63 by the end of the year – a significant downgrade from the previous prediction.
Judging from an average of the panelists’ responses, Cardano’s native token is likely to rise by just over 30% from its current price to reach a year-end price target of USD 0.63.
ADA last traded above that price level as recently as June 10 this year, which illustrates just how bearish Finder.com’s panel has become on Cardano.
Daniel Polotsky, founder and chairman of bitcoin (BTC) ATM operator CoinFlip, stated that,
“[I]ts price and hype are way too high given its relatively low total value locked compared to its competitors,” he said.
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Others, including fintech firm Cloudtech Group’s chief operating officer Kevin He, were also skeptical about Cardano’s future.
He argued that Cardano’s advantage of fast transactions will disappear with the launch of ETH 2.0, adding:
“And due to the efficiency problem of the development team causing Cardano to significantly lag behind other competitors in smart contracts and dapp compatibility, coupled with the bear market blow we are not optimistic about the value of Cardano in the future.”
The prediction also marks a significant downgrade for the price of ADA compared to a prediction from January this year, when Finder.com’s panel said ADA was likely to finish 2022 at USD 2.79.
The latest forecast is also much more bearish when looking further into the future.
Some 56 percent in the new survey said inflation was causing them major or minor financial strain, including 28 percent who said they felt major pressures. More than half said gas and groceries were among their greatest concerns when it came to rising prices, with about a quarter citing housing and utility bills.”
TREASURY RULE WOULD UNMASK ANONYMOUS SHELL COMPANIES — Our Katy O’Donnell: “The Treasury Department on Tuesday proposed long-awaited rules that would require businesses to disclose ownership information to the government, in a bid to crack down on anonymous shell companies used to launder money.”
SEC’S INTERNAL WATCHDOG KEPT JOB DESPITE ‘SERIOUS MISCONDUCT’ FINDING — Scoop from Reuters’ Sarah N. Lynch and Chris Prentice: “As the inspector general at the U.S.
Papers and Hidden Wealth” at 10 a.m. … FDIC’s Tech Lab virtual discussion on banking and fintech Wednesday
HOUSE PASSES WORKAROUND TO PAVE WAY FOR DEBT CEILING HIKE — From our Sarah Ferris, Jennifer Scholtes and Caitlin Emma: “The House passed a bill Tuesday night to expedite a debt ceiling fix in the Senate, allowing Democrats to essentially raise the nation’s credit limit on their own and thwart a Christmastime default.
“The measure — which is the result of an 11th-hour accord between party leaders — tees up a new path for Congress to hike the nation’s borrowing ability, preventing the Treasury Department from running out of cash as soon as this month.”
—More on the reasons behind this strategy, from last Friday’s MM.
—The consequences of default: Third Way is out with a new report this morning on six potential knock-on effects of a U.S.
He’s making it very difficult for a lot of small businesses and minority-owned businesses.”
MM sidebar: Despite the last-minute snafu, analysts see momentum for cannabis legislation to advance next year, especially given the increasingly broad and strong support for the measure.
MANCHIN ISSUES INFLATION WARNING AS CLOCK TICKS ON SPENDING BILL — Our Marianne LeVine: “Sen. Joe Manchin (D-W.Va.) expressed concern Tuesday about rising inflation and warned his party about the need to carefully craft its social spending bill.
“During a Wall Street Journal CEO Council Summit, Manchin indicated that he is still waiting on final text before making a decision on whether to support the Democrats’ $1.7 trillion proposal.
But for crypto executives, who will appear together for the first time before a House panel this morning, it’s a welcome coming-of-age moment they see as legitimizing their role in financial services.
The House Financial Services Committee hearing comes at a pivotal moment as regulators and lawmakers weigh new rules around how digital assets should be regulated and by whom. (Read the full committee briefing memo here.)
“There’s a lot on the line,” said Cowen policy analyst Jaret Seiberg. “You have one shot to make a first impression, and this is the industry’s opportunity.”
—Circle CEO Jeremy Allaire —FTX CEO Samuel Bankman-Fried —Bitfury Group CEO Brian Brooks —Paxos Trust Company CEO Charles Cascarilla —Stellar Development Foundation CEO Denelle Dixon —Coinbase Inc.