Do you ever look in the mirror and feel like you’re not sure who’s staring back at you?

Do you think American crypto feels like that every day?

Like a screaming, amnesiac detective who just wants to know where his wife went, crypto’s been left questioning everything.

In the worst case of mistaken identity since “The Big Lebowski,” crypto’s unclear status in the States has launched heated debates, the flights of entire companies, and, of course, legal action.

Will crypto find itself before it’s too late for all of us?

Espresso Shots

☕️ a16z Expands into UK ⤴ 🇬🇧

a16z, Andreessen Horowitz’s venture capital fund dedicated to crypto and Web3, is opening up shop across the pond.

While a16z will remain in America where it continues to fight for crypto, the firm’s new London office will represent its first expansion outside the United States.

As crypto adoption in the U.K. becomes only more mainstream following the advent of MiCA, a16z’s landing has many prominent Brits excited, including the prime minister.

While unclear regulation forces many crypto companies out of the Americas, they seem more inclined than ever to establish colonies in England as part of a larger trend that historians are calling “reverse-Imperialism.”

☕️ EU Attacks Crypto Social Media Scams 🇪🇺 📣

The European Consumer Organization (BEUC) has released a 20-page report with the snappy title: “THE GREAT SOCIAL MEDIA CRYPTO CON: ALERT TO THE EUROPEAN NETWORK OF CONSUMER PROTECTION AUTHORITIES ABOUT THE MISLEADING PROMOTION OF CRYPTO-ASSETS ON SOCIAL MEDIA.”

Whew.

The report alleges that Instagram, YouTube, Snapchat, and TikTok’s advertising has mixed with crypto to create a “toxic cocktail” (sic; pg. 6) of scam culture.

Social media has created a wealth of opportunities for scammers in the guise of influencers to hawk shitcoins or gain access to users’ data.

“Crypto will be regulated soon with the new Market in Crypto Assets Regulation,” said BEUC Director General Monique Goyens in an interview with Reuters. “But this legislation does not apply to the social media companies benefiting from the advertising of crypto at the expense of consumers”.

The BEUC’s next report will be a documentary-style deep dive into sidebar ads to determine once and for all if there really are any “Hot Single Mums” in your area.

☕️ Winkelvoss Twins Dunk on Dems 🤼 🏀

Both Winkelvii brothers took to Twitter to criticize Gary Gensler and Elizabeth Warren for their mishandling of crypto.

The public usually hears from Cameron, but this was one of those rare occasions when even Tyler jumped into the fray.

But you can trust Cameron to bring it home.

“Imagine just letting the youth vote slip through your fingers like that,” said the two men who famously lost Facebook.

Spilling the Beans

☕️ Crypto's Identity Crisis 😅 🇺🇸

The true debate on crypto in America centers on one definitive question.

Is crypto a security?

So many of the lawsuits and fines that the SEC has dished out in the past years have been securities violations.

But much of the current American securities statutes are derived from a piece of legislation from 1933 that was intended to regulate Florida orange grove securities.

You can’t just write an article in 2023 that says “Friends” or “Seinfeld” was unwoke. It was the 90s, they didn’t know any better. Or maybe they knew better after all, depending on how long we keep talking about it.

But it’s beyond unfair and quickly approaching ludicrous to apply the rules and conventions of one time period to another.

So, why would we apply financial constraints from 1933 to an industry that started in 2009 with the launch of Bitcoin?

Well, if we’re going to empathize with the SEC, securities might have been the closest classification the government could find when it came to deciding which regulatory body would be in control of the burgeoning crypto industry.

But we’re quickly finding that there are quite a few players in the American government who don’t feel the same way.

In a meeting last Tuesday between the House Agriculture Committee and the Commodities Futures Trading Commission (CFTC), the CFTC Chair Rostin Behnam was questioned on the SEC’s current crypto control, according to Blockworks.

When asked about the SEC’s position and whether that power over crypto should be ceded elsewhere, Benham replied: “This is not a zero-sum game […] For anything that the CFTC might get in legislative or legal authority, I’m not taking it from someone else. There is a regulatory vacuum, there is a gap in regulation over digital commodity assets.”

And while the SEC has certainly seized control in this power vacuum, it may not be that way for long.

There are efforts currently underway in Washington to reclassify crypto, taking it out of the SEC’s jurisdiction.

Majority Whip Tom Emmer and Representative Darren Soto are introducing a bipartisan bill called the Securities Clarity Act.

This bill will attempt to clear up the regulatory uncertainty surrounding crypto, aiming to reclassify it as an investment contract, which would render crypto a commodity, not a security.

But if only it were that simple. This is Washington we’re talking about, not a group of reasonable, civil individuals.

Even in the bipartisan efforts to reclassify crypto and provide some much-needed clarity, we should expect substantial infighting on Capitol Hill.

Infighting that will only be exacerbated by the coming election cycle.

This update is good news and we’re hopeful. But the cogs of sweeping, governmental change move at a glacial pace.

Yes, crypto will one day be reclassified and it will be partially, if not totally out of the SEC’s clutches.

But we can only hope that day arrives before a future when Apple Vision becomes affordable and the entire country becomes digital hermits, unable to make eye contact.

Meme of the Day

We are LOVING the Twitter drama lately… 😁

Crypto 101

Finfluencer: A portmanteau of “Finance” and “Influencer,” these problematic social media personalities were covered extensively in the BEUC’s report (pg. 10).

Essentially, they’re influencers who promote financial products and investments, offering impossible gains and the promise of quick returns.

These scammers are ubiquitous in crypto, and young people are particularly susceptible to these cults of personality.

Finfluencers are not, as we initially thought, sharks and dolphins with substantial social media followings.

The Last Sip

As American companies flee to England to establish power, here are three more pieces of hard evidence for “reverse-Imperialism”:

3. There’s a McDonald’s, Shake Shack, and Five Guys all within half a mile of Buckingham Palace.

2. Pepsi co-owns half of Lipton Tea, England’s largest tea company, and they’re ready to dump their shares in the harbor at a moment’s notice.

1. Prince Harry has been saddled with an American wife who is as beautiful as she is deadly. With just the right sequence of deaths, Meghan Markle could ascend to the throne as the first, American Queen Consort.

Stay Caffeinated,

Coffee & Crypto Team

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