- Top Lines
The White House released the United States Government National Standards Strategy for Critical and Emerging Technology, which provides that the United States will prioritize efforts for standards development for a subset of critical and emerging technologies, including: communication and network technologies; semiconductors and microelectronics; artificial intelligence and machine learning; biotechnologies; positioning, navigation, and timing services; digital identity infrastructure and distributed ledger technologies; clean energy generation and storage; and quantum information technologies.
It will also focus standards development activities and outreach on the following applications: automated and connected infrastructure; bio banking; automated, connected, and electrified transportation; critical minerals supply chains; cybersecurity and privacy; and carbon capture, removal, utilization, and storage.
Senate Majority Leader Chuck Schumer (D-NY) previewed a new initiative to task a number of Committee Chairs to begin working with their ranking Members on a bipartisan China Competition bill that builds off the work the Senate accomplished last Congress. Sen. Schumer is directing the work to focus on five key policy areas: Limiting the flow of advanced technology to the Chinese Government; Curtailing the flow of investment to the Chinese Government; Securing domestic economic investment; Underscoring our commitment to economic allies and maintaining partner alignment; and Safeguarding our allies’ and partners’ security and maintaining our strategic alliances.
New York Attorney General Letitia James announced legislation to tighten regulations on the cryptocurrency industry to protect investors, consumers, and the broader economy. Attorney General James alleged the multi-billion-dollar industry lacks robust regulations, making it prone to dramatic market fluctuations, and has been used to hide and facilitate criminal conduct and fraud. Attorney General James’ program bill, which proposes the strongest and most comprehensive set of regulations on cryptocurrency in the nation, would increase transparency, eliminate conflicts of interest, and impose commonsense measures to protect investors, consistent with regulations imposed on other financial services.
- Weekly Wrap Up
The Securities and Exchange Commission (SEC) adopted amendments to Form PF, the confidential reporting form for certain SEC-registered investment advisers to private funds. The amendments are designed to enhance the ability of the Financial Stability Oversight Council (FSOC) to assess systemic risk and to bolster the Commission’s oversight of private fund advisers and its investor protection efforts. SEC Commissioner Jaime Lizárraga issued a statement discussing the amendments entitled “Enhancing Financial Stability and Fulfilling Our Investor Protection Mandate.” Commissioner Lizárraga’s remarks track with recent FSOC announcements around nonbank SIFI designation and offer insights to the types of firms FSOC may be targeting.
The United States District Court for the Southern District of New York held that Nathaniel Chastain, a former employee of NFT platform OpenSea, engaged in fraud and money laundering after using inside knowledge about forthcoming NFT listings to sell NFTs prior to them becoming available for trading on OpenSea’s home page, engaging in insider trading.
The White House published a blog on the proposed Digital Asset Mining Energy (DAME) excise tax. After a phase-in period, firms would face a tax equal to 30 percent of the cost of the electricity they use in cryptomining. The excise tax would be phased in over three years at a rate of 10 percent in the first year, 20 percent in the second, and 30 percent thereafter.
The Federal Deposit Insurance Corporation (FDIC) released a comprehensive overview of the deposit insurance system and options for reform to address financial stability concerns stemming from recent bank failures. The report, Options for Deposit Insurance Reform, examines the role of deposit insurance in promoting financial stability and preventing bank runs, as well as policies and tools that may complement changes to deposit insurance coverage. Read a statement on the report from Chairman Gruenberg here.
The Biden-Harris Administration released a report detailing how the American Rescue Plan’s (ARP) State Small Business Credit Initiative (SSBCI) is providing support to small businesses across the country, and in particular how states will use SSBCI to expand access to capital for small manufacturers.
The Commodity Futures Trading Commission (CFTC) announced Judge Lee Yeakel of the U.S. District Court for the Western District of Texas entered an order of default judgment and permanent injunction against Cornelius Johannes Steynberg of Stellenbosch, Western Cape, Republic of South Africa. The order requires Steynberg to pay $1,733,838,372 in restitution to defrauded victims and a $1,733,838,372 civil monetary penalty, which is the highest civil monetary penalty ordered in any CFTC case. This action is also the largest fraudulent scheme involving bitcoin charged in any CFTC case.
Representatives Warren Davidson (R-OH) and Mike Flood (R-NE) sent a letter to the Council of Economic Advisors (CEA) addressing how they intend to handle digital assets. The report encourages a regulatory regime for digital assets that will allow the ecosystem to thrive while enacting critical protections.
The Federal Reserve (Fed) issued a Federal Open Market Committee (FOMC) statement discussing raising the target range for the federal funds rate to 5-5¼ percent.
U.S. Department of the Treasury (Treasury) Assistant Secretary for Financial Institutions Graham Steele delivered remarks on community finance policy and building a more equitable economy at Inclusiv’s 2023 Conference.
The Federal Trade Commission (FTC) announced that the deadline to submit comments in response to its Request for Information on the business practices of cloud computing providers has been extended by 30 days until June 21.
The FDIC made public a Consent Order with Cross River Bank which outlines FDIC charges that the Bank engaged in unsafe or unsound practices related to its fair lending compliance.
The New York State Department of Financial Services (NYDFS) announced a $1.5 million fine against bitFlyer citing non-compliance with regulatory guidelines, alleging that bitFlyer USA had not performed a comprehensive risk assessment and that its cybersecurity program was not designed to protect its electronic systems.
- ICYMI
The Board of Governors of the Federal Reserve System (Fed or FRB) announced the results from the review of the supervision and regulation of Silicon Valley Bank. The review found four key takeaways on the causes of the bank’s failure: Silicon Valley Bank’s board of directors and management failed to manage their risks; Federal Reserve supervisors did not fully appreciate the extent of the vulnerabilities as Silicon Valley Bank grew in size and complexity; When supervisors did identify vulnerabilities, they did not take sufficient steps to ensure that Silicon Valley Bank fixed those problems quickly enough; and The Board’s tailoring approach in response to the Economic Growth, Regulatory Relief, and Consumer Protection Act and a shift in the stance of supervisory policy impeded effective supervision by reducing standards, increasing complexity, and promoting a less assertive supervisory approach.
Need to catch up on what happened last week? Check out our April 28th newsletter here.