Silvergate and SVB bite the dust: Law Decoded, March 6–13.

Another major earthquake rocked the crypto market last week. Silvergate Bank — a cryptocurrency gateway network for financial institutions and a key entry point for U.S. cryptocurrencies — has ceased operations due to liquidity issues.

A few days later, another Federal Deposit Insurance Corporation insurer, Silicon Valley Bank (SVB), was shut down by California’s financial watchdog. The bank provides financial services to several crypto-focused ventures, including Andreessen Horowitz and Sequoia Capital, and the Circle of USD Coin (USDC) issuers account for about 20% of the bank’s reserves. I own Following this news, USDC unpegged him in 24 hours, losing more than 10% of his value.

Some lawmakers, well-known for their hostility to cryptocurrencies, were quick to attack the industry. Senator Elizabeth Warren called Silvergate’s failure “disappointing but predictable” and called on regulators to “keep up with cryptocurrency risk.” Senator Sherrod Brown shared concerns that banks involved in cryptocurrencies are putting the financial system at risk and reaffirmed his desire to “strongly protect the financial system from cryptocurrency risks.” bottom.

But the most significant commentary came on the day U.S. Treasury Secretary Janet Yellen revealed that officials were not considering a major bailout of Silicon Valley banks. Yellen said the Federal Deposit Insurance Corporation is considering a “wide range of options available,” including acquisitions from foreign banks.

Biden Budget Proposes 30% Tax on Crypto Mining Power Usage

US crypto miners could be subject to a 30% tax on their electricity bills under President Joe Biden’s budget proposal to “reduce mining activity.” According to the Treasury Department’s Supplementary Budget Statement, any company that uses the resource, whether owned or rented, will be subject to a consumption tax equal to his 30% of the cost of electricity used in digital asset mining. becomes. The tax rate he put into effect after December 31, with a rate of 10% per annum he proposed to be phased in over three years, reaching a maximum rate of 30% by the third year.

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Stablecoins and Ether ‘will become commodities’, CFTC chair reaffirms

Stablecoins and Ether are commodities that should fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC), according to Rostin Behnham, chairman of the U.S. Commodity Futures Trading Commission (CFTC).

During a recent hearing, senators questioned Behnham about the differences in views between the CFTC and the Securities and Exchange Commission (SEC) after the CFTC settled with stablecoin issuer Tether in 2021. “It was clear to our enforcement team and committee that the stablecoin Tether was a commodity,” Behnam said. Behnam’s latest comments contradict his SEC chairman Gary Gensler’s view that all but Bitcoin (BTC) is a security.

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China unveils plans for new national financial regulator

The Chinese government is reportedly planning a regulatory overhaul, including the introduction of a new national financial regulator. The reform means that the current banking and insurance supervisory body, the China Banking and Insurance Regulatory Commission, will be abolished. The responsibilities of this committee, as well as certain functions of central banks and securities regulators, will be transferred to entirely new controls.

The announcement follows President Xi Jinping’s call for reform of China’s party and state institutions. These reforms also include a bureau for sharing and developing data resources. This will partially replace the current duties of the Secretariat of the Central Committee on Cyberspace Affairs.

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