Donald Trump Adopts CBDC Stance as DeSantis, Ramaswamy Bow Out
Will the Republican field coalesce around Trump, crypto included?
By: André Beganski
January 22, 2024
GM! This week: Bitcoin’s price continues to slide, Trump calls out the digital dollar, Coinbase and the SEC square off in court, Terraform Labs files for bankruptcy, and one crypto-focussed pastor pins his securities-law defense on God.
Donald on the Digital Dollar
Former president and Republican frontrunner Donald Trump spoke out against the prospect of a digital dollar last week, vowing to protect the American public from the supposed dangers of a Central Bank Digital Currency (CBDC) during a recent campaign event.
“Tonight, I’m also making another promise to protect Americans from government tyranny,” he said. “As your president, I will never allow the creation of a Central Bank Digital Currency.”
CBDCs and stablecoins are very similar digital assets — both are pegged to the price of sovereign currency, such as the U.S. dollar. However, instead of being issued by private companies on public networks, CBDCs are often issued and maintained by their respective governments. Reviled among crypto-diehards for several years, National Security Agency whistleblower Edward Snowden once derided CBDCs as “Cryptofascist Currencies.”
If Trump’s pledge sounds familiar, that’s because a CBDC ban is not a novel idea among right-wingers. Entrepreneur Vivek Ramaswamy and Florida Governor Ron DeSantis — who have since both dropped out of the presidential race, only to then back Trump — have both assailed the concept of a CBDC, which they say would degrade Americans’ financial sovereignty.
On Capitol Hill, anti-CBDC sentiment can be largely attributed to U.S. Rep. Tom Emmer, who endorsed Trump weeks ago and re-introduced his CBDC Anti-Surveillance State Act late last year. Perhaps fans of crypto will fall in line behind Donald Trump as well?
This is Howey Do it
The Securities and Exchange Commission squared off with Coinbase in a Manhattan court last week, as Judge Katherine Polk Failla peppered each side with questions for hours at a time. Presiding over the regulator’s lawsuit against Coinbase, her decision on the exchange’s motion to dismiss the high-profile case is expected to come in the coming weeks.
It appears the exchange has a good chance of winning the case, overall, Consensys Lawyer Bill Hughes told Coinage in a Friday interview. However, he said it’s unlikely that Judge Failla will toss out the lawsuit in its entirety when deciding on Coinbase’s present motion. Of all the arguments that could be let go, he said the SEC’s claims that Coinbase’s staking products violate securities law appeared the weakest based on Failla’s feedback.
As the SEC reflects on the breadth of Failla’s scrutiny, the regulator is due for a similar crypto-focused confrontation in court on Monday. Taking its turn to lock horns with the regulator, Binance argued for an SEC lawsuit to be dismissed on Monday, fending itself against accusations of fraud and market manipulation that other U.S. exchanges haven’t been hit with.
Terraform Labs’ Bankruptcy
Terraform Labs, the company responsible for issuing the ill-fated TerraUSD stablecoin and its sister-token Luna that crashed in 2022, filed for Chapter 11 Bankruptcy in a Delaware court on Sunday. According to the firm, the proceedings will help Terraform Labs fulfill its business plan while balancing ongoing legal proceedings, such as a lawsuit brought by the SEC last year.
If you’re just getting caught up, there’s always our award-winning exclusive mini-documentary on Terra’s collapse to bring you up to speed:
Meanwhile, Terraform Labs co-founder Do Kwon remains in custody in Montenegro. Arrested in the region while trying to leave with a false passport last year, the former crypto icon filed an appeal against a decision upholding his extradition to the U.S. or South Korea last week. Not long after, the SEC agreed to delay Kwon’s civil trial to mid-March, so he could attend.
A Denver-area couple has drawn scrutiny from Colorado’s Securities Commissioner, who accused pastor Eligio Regalado and his wife Kaitlyn of fraudulently deceiving INDXcoin’s investors in a lawsuit last week. Claiming the couple illegally issued the coin through an online church dubbed Victorious Grace, the lawsuit also claims the couple pocketed $1.3 million of $3 million in funds raised from the coin’s sale. Allegedly, the couple spent said funds on luxury handbags, cosmetic dentistry, snowmobile adventures, and an au pair, among other purchases.
It was all according to God’s command, Regalado has said in his defense. Aside from telling prospective investors “that their investments’ success was guaranteed by God,” the lawsuit claims that Eligio abused investors’ faith in other ways, such as relaying god’s supposed message that INDXcoin is not a security but rather a utility coin.
FTX Estate Sold Majority of Bankrupt Exchange’s Grayscale Bitcoin Trust Shares (Bloomberg)
Higher-Cost Crypto Funds Suffer as Spot Bitcoin ETFs Hit $4 Billion of Inflows (The Block)
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