February 2: This week in digital asset federal policy
DCDecentralized: A weekly newsletter on developments in digital asset U.S. federal policy.
This week decoded
Today, the White House will host executives from the banking and cryptocurrency industries and trade associations to discuss the stablecoin yield issue and a path forward for market structure legislation.
The Senate Agriculture Committee advanced their market structure legislation on a 12-11 party-line vote. Despite opposition from Democrats, both sides emphasized negotiations would continue and changes to the bill could be made.
The Chairs of the SEC and CFTC hosted a joint event to discuss harmonization between the two agencies and published an op-ed highlighting upcoming regulatory actions on digital assets.
Pro-crypto lawmakers celebrated President Trump’s nomination of Kevin Warsh as Chair of the Federal Reserve Board of Governors. Warsh has been cited as calling Bitcoin a “sustainable store of value” but other cryptocurrencies as “software that pretends to be money.” In 2022, he published an op-ed in the Wall Street Journal calling for a U.S. CBDC.
Read more below
Congress
Hearings
Last week
On January 29, the Senate Agriculture, Nutrition and Forestry Committee held a markup of crypto market structure legislation.
This week
On February 4, the House Financial Services Capital Markets Subcommittee holds a hearing on A New Day at the SEC: Restoring Accountability, Due Process, and Public Confidence.
On February 4, the House Financial Services Committee holds a hearing on “The Annual Report of the Financial Stability Oversight Council.”
On February 5, the Senate Banking, Housing and Urban Affairs Committee holds a hearing on “The Financial Stability Oversight Council’s Annual Report to Congress.”
Upcoming
On February 11, the House Financial Services Committee holds a hearing on “Oversight of the Securities and Exchange Commission.”
Legislation
The Senate Agriculture Committee passed their market structure bill, the Digital Commodity Intermediaries Act, by a 12-11 party-line vote. (Press release)
Correspondence
Sens. Mazie Hirono (D-HI), Elizabeth Warren (D-MA), Dick Durbin (D-IL), Sheldon Whitehouse (D-RI), Chris Coons (D-DE), and Richard Blumenthal (D-CT) sent a letter to Deputy Attorney General Todd Blanche requesting information on his decision last year to disband the Department of Justice’s (DOJ) National Cryptocurrency Enforcement Team (NCET) and terminate investigations and prosecutions into cryptocurrency crime, in light of recent reporting that he held more than $150,000 in cryptocurrency at the time of the decision. (Letter)
Rep. Lloyd Doggett (D-TX) sent a letter to Secretary of State Marco Rubio and Secretary of the Treasury Scott Bessent requesting information on the Trump Administration’s handling of revenues from Venezuelan oil through an offshore account in Qatar. The letter asks, “Most notably, proceeds from Venezuelan oil-related corruption have been laundered via cryptocurrency. How is the Department helping Venezuelan authorities to track these assets? What is the Department doing to ensure that US-associated cryptocurrency firms are not engaging in further illicit financial flows associated with these Qatar-based oil revenues?” (Letter)
Publications
SEC Chair Paul Atkins and CFTC Chair Michael Selig published an op-ed in Fox News entitled “Team Trump Readies Crypto Plan so Americans Can Count on Their Future,” saying, “The SEC-CFTC harmonization agenda begins with fundamentals: aligned definitions, coordinated oversight, and seamless, secure data sharing between agencies. Market participants should not be saddled with duplicative agency registrations and sets of regulations in order to offer economically similar products that can be effectively regulated under a unified approach. Harmonization strengthens standards through coherence, predictability and economic rationality.” (Op-ed)
Trump Administration
White House
On February 2, the White House will meet with executives from the banking and cryptocurrency industries and trade associations to discuss the stablecoin yield issue and a path forward market structure legislation. (Reuters)
Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC)
SEC Chair Paul Atkins and CFTC Chair Michael Selig held a joint event on January 29 to discuss harmonization between the two agencies and their efforts to deliver on President Trump’s promise to make the United States the crypto capital of the world.
Federal Reserve
President Donald Trump announced Kevin Warsh as his nominee for Chair of Federal Reserve Board of Governors.
Noteworthy Quotes and Events
ADMINISTRATION
White House
AI & Crypto Czar David Sacks posted “With today’s vote to advance crypto market structure legislation out of the SenateAg Committee, we are one step closer to establishing the necessary regulatory framework to make the United States the crypto capital of the world. Thank you to Chairman JohnBoozman as well as his staff for their leadership throughout this process. While the vote was partisan, a number of Democrat members stated their commitment to passing this important legislation. We will continue to work with them on a bipartisan basis to achieve that goal.”
Securities and Exchange Commission (SEC)
Chair Paul Atkins posted “Thanks to the leadership of President Trump, America’s financial regulators - including ChairmanSelig and myself - are returning to the basic tenets that made our markets the envy of the world.”
The SEC posted “Chairman SECPaulSAtkins and CFTC ChairmanSelig held a joint event today to discuss harmonization on Project Crypto. Working together, the agencies are optimistic about what their teams can accomplish, and how collaboration can promote the long-term dynamism of U.S. markets. Through Project Crypto, the SEC and CFTC can help to ensure that the future of finance is built in the U.S. under rules that protect investors, support innovation, and cement America’s leadership in the global financial system.”
Commodity Futures Trading Commission (CFTC)
Chair Mike Selig posted “The future of finance will be built somewhere. Through Project Crypto, and disciplined, harmonized, minimum-effective-dose regulation, we ensure that it is built here, under rules that protect investors, promote innovation and cement America’s leadership in the global financial system.”
CONGRESS
Senate Agriculture Market Structure Markup
In opening remarks directed to his Democratic colleagues on the Senate Agriculture Committee, Chair John Boozman (R-AR) said, “…we’re committed to continue working with you. And there’s all kinds of mechanisms that we can use to amend this bill in the future, if we choose to, in the sense of a management things like that. So, we appreciate your willingness, like I say, to continue. What we want is a bipartisan bill.”
Before the markup, Boozman said, “We reached a little bit of an impasse, and so we felt like we needed to move it forward. We will be able to change it as we need to.” (Punchbowl)
Sen. Cory Booker (D-NJ) said the draft Republican bill “was negotiated with two parties at the table, but it isn’t in accord with the principles we laid out in November in a bipartisan way.” (Punchbowl)
During the markup, Booker said, “To be clear, the product put before us today is not the bipartisan draft we’re working on. Right now, our inability to work together and move together in this final process is undermining our ability to get it done.” He added, “The White House has made this infinitely harder.” (Decrypt)
Of White House involvement in the Senate negotiations, Sen. Elissa Slotkin (D-MI) said, “It just feels like the White House came in on top of everything and said, ‘well, you’re doing this work and you’re being diligent and you’re being the deliberative body, but we want what we want.’” (Punchbowl)
Slotkin added, “I’m just disappointed that we’re here where we are. It feels like the White House came in and said… ‘We’re gonna shortcut what you’re doing and turn this into a partisan issue’, when it doesn’t have to be.” (Decrypt)
Slotkin also said, “The ethics piece, to me, is a big part of it. I know the other side would be having a conniption if this was Joe Biden or Barack Obama. It’s just an enormous amount of money.” (Decrypt)
Sen. Adam Schiff (D-CA) said, “It’s going to need to include ethics language. It should cover all federal officials… from the president on down.” (Decrypt)
Sen. Raphael Warnock (D-GA) released a statement after the markup, saying, “I am bitterly disappointed that the majority chose to abandon the bipartisan pathway that is needed to pass a bill into law. While I voted no today, I am not done working on this legislation. The bipartisan draft included some very strong policy provisions, many of which will help protect consumers who trade and invest in crypto. When I was elected to the Senate, I promised that I would always center the people, and I take that commitment seriously. I look forward to continuing to work with the majority, with consumers and investors, and with industry stakeholders to pass a market structure bill into law that protects consumers and ensures that there are clear rules for digital asset investors, customers, and businesses.” (Press release)
Sen. Dick Durbin (D-IL) released a statement after the markup, saying, “The 2008 financial crisis was a wake-up call to Congress and led to the creation of the Consumer Financial Protection Bureau and the Dodd-Frank Act. With the rise of cryptocurrency, we can’t repeat the 2008 mistakes in 2026. Congress must regulate this industry, which is a risky, volatile, and unpredictable investment. Now that Senate Agriculture Committee Republicans have advanced this partisan legislation, I strongly advise the full Senate to pause this advancement and work to provide meaningful protections and transparency for consumers, instead of rubber stamping an industry that President Trump is using to enrich himself and his family. Rushing this process is unwise and poses a serious danger to the U.S. financial system.” (Press release)
Durbin also posted “Americans have lost more than $333 million to crypto ATM scams. I introduced an amendment to a crypto bill that would give law enforcement the tools to go after these scams and their perpetrators, but Senate Republicans voted it down.”
Durbin also posted “There were already bipartisan negotiations to pass a cryptocurrency bill that would have provided more meaningful guardrails on the industry, but Republicans threw it out. Why? So President Trump and his crypto allies can profit off their own personal cryptocurrencies.”
Sen. Cynthia Lummis (R-WY) posted “Great to see digital asset market structure pass SenateAgGOP. We are one step closer to getting this legislation to POTUS’ desk, and I look forward to continuing to work closely with my colleagues across the aisle to make America the digital asset capital of the world.”
Nomination of Kevin Warsh as Federal Reserve Chair
Sen. Cynthia Lummis (R-WY) released a statement on President’s Trump’s selection of Kevin Warsh to serve as the Chairman of the Federal Reserve, saying, “Now more than ever, we need a Federal Reserve that embraces digital assets and financial innovation, not one that shuns advancement. I applaud President Trump’s decision and look forward to hearing Kevin Warsh’s plans to undertake needed reforms to the make the Fed more transparent and accountable to Congress.” (Press release)
Rep. Tom Emmer (R-MN) posted “Kevin Warsh is another outstanding pick by POTUS. I hope to sit down with him soon to discuss the importance of maintaining America’s status as the crypto capital of the world and look forward to his swift confirmation in the Senate.”
Miscellaneous
House Judiciary Dems posted “Trump’s DOJ has created a prosperous subculture of “Friends of Trump” lawyers who help wealthy criminals dodge prosecution and get pardons. ‘Bitcoin Jesus’—a crypto billionaire accused of evading $50 million in taxes—fled to Spain and hired—what do you know!—the same lawyer who defended Trump in the J6 investigation and the classified documents case. The result? No guilty plea or prison time. He wrote a check and walked free. In Trump’s Gangster State, tax evasion isn’t a crime if you can get to the right people.”
Sen. Mazie Hirono (D-HI) posted “Last year, this regime eased crypto-crime enforcement. And now, a recent investigation reveals that a top DOJ official held over $150,000 in cryptocurrency when he made the decision. This regime may let corruption and conflict of interest fly, but I don’t.”
Rep. Young Kim (R-CA) posted “President Trump is doing everything he can to ensure America is the world capital of crypto. It’s time for the Senate to do their part and pass the CLARITY Act so we can unleash the golden age of American crypto innovation.”
Rep. Warren Davidson (R-OH) posted “Chinese people don’t even like Chinese money. Instead, China is working with Democrats and Europeans to build a Central Bank Digital Currency backed by digital ID - communist money. Sadly, Republicans have proven incapable of banning it. President Trump’s full Digital Asset Executive Order should become law. 1. Ban CBDC 2. Protect self-custody. 3. Stablecoins 4. Market structure”
What I’m Reading This Week
Trump Regulators Say They Are Ready to Lay Out Crypto Rules to Foster Growth, Dylan Tokar, The Wall Street Journal.
About Zero One Strategies
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The practice focuses on key areas such as artificial intelligence, digital assets, blockchain, decentralized technologies, cybersecurity, data, and digital infrastructure, as well as the multiple policy issues impacting these sectors, including tax and financial services.
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