The Future of Crypto in the US! DeFi, Clarity Act, SEC CFTC Guidance, & Privacy Coins! | J.W. Verret

J.W. Verret (0:00)

The Patriot Act does not regulate period to period transactions at all. Nevertheless, the SEC included a whitelisting requirement on this innovation exemption. And I think part of that is just Treasury saying, yeah, we know you don't have the statutory authority to require it, but just put it in the exemption anyway, because we're just worried about this. I think that's exactly the tenor of that conversation.

Tony Edward (0:28)

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J.W. Verret (2:10)

Good to be here, Tony. We've been doing this for a few years now, and we've been through it all together. I feel like every one of these is a milestone. And a new, I don't know if you watch or read the Foundation series, but I feel like crypto goes through these Harry Seldon crises. And there's always the next, you know, Gary Gensler was one of them. So we're always on to the next Harry Seldon crisis in crypto.

Tony Edward (2:34)

Absolutely. So many different iterations. And you know, I always appreciate your perspectives. You've got a plethora of knowledge, and you absolutely understand the securities laws, and you've worked with the SEC in certain phases of the timeline. So, JW, rough week, you know, for crypto.

The Clarity Act, which we were hoping was going to make it through the Senate and be passed, did not do so. And I want to get your take on what happened with that situation. Was it strictly politics or was it the banking lobby? You know, what happened here?

J.W. Verret (3:10)

I think it was mostly about politics. It seemed like there were a lot of people trying to negotiate up against, up until the very last minute. And it seems like at some point, right before the vote, there was an order given down from on high within the Democratic Caucus, but I think within a group of people together. And the order was no, the order was walk away on the D side. I don't think it came from Schumer. I think it came from Elizabeth Warren and folks allied with her. And I think it was just a pure political calculus about the midterms. What's better for us in the next few weeks as senators?

Doing this or not doing this? And I think their decision about their midterm calculus was throw crypto into the bus.

We took your money in the past, but we're just going to light on fire everything that we said we would do. I think that's what happened.

Tony Edward (4:04)

Yeah, I'm in agreement with you there. I think they did not want to give Trump any type of win before the midterm elections, and it's very political.

Do you feel that once the elections are over, they may come back to the table and say, okay, look, we've done what we need to do. Let's get this done.

J.W. Verret (4:22)

Yeah, I don't know for sure. I've seen the comments from Senator Kennedy saying that he thinks it's possible. When he says something, I listen, not just because it's folksy and humorous, and not just because he's from my home state, I'm from Louisiana too. I've known his career a long time even before when he was a treasurer.