America has always been known as the Land of the Free, particularly when it comes to free markets.

But the latest declaration handed down by the powers-that-be may threaten all of that. Today, we’re digging deep into the latest effort in Washington to ban crypto.

Espresso Shots

☕️ Europe's Crypto Bill Passes! 🇪🇺 🪙

As we all expected, the groundbreaking crypto legislation, Markets in Crypto-Assets (MiCa), has been voted through European Parliament.

The voting took place in Strasbourg, France on Thursday. The end results were 517 votes in favor of the legislation, 38 against, and 18 members abstained.

“The European Parliament’s adoption of MiCA today is a pivotal moment for the crypto industry in the region, and the work of European policymakers should be seen as exemplary,” said Tom Duff Gordon, Coinbase’s VP of International Policy.

Gordon praised the EU’s decision, but at the same time couldn’t resist mentioning that, “other notable jurisdictions are struggling to provide a solid, cohesive regulatory framework that gives clarity to a burgeoning, innovative industry.”

That’s you, America.

MiCA won’t go into effect immediately. Exchanges and crypto providers operating in Europe will have until July 2024 to catch up with Europe’s new licensing and regulatory laws.

But once MiCA goes into effect, this may be the best thing to happen to Europe since Alexander Fleming accidentally discovered penicillin just in time for WWII.

☕️ Coinbase Looks Overseas 🌍 👀

Amidst constant and unclear regulatory pressure, Coinbase has made another decisive move toward relocating overseas.

Coinbase obtained a digital assets business license from the Bermuda Monetary Authority. Coinbase intends to open a derivatives exchange on the island “as soon as next week,” said an anonymous source.

In addition to Bermuda, Coinbase has also expanded into Canada, Brazil, Singapore, and Abu Dhabi.

This is part of an ongoing, eight-week campaign at Coinbase referred to as the company’s “International Expansion Drive.”

International Expansion Drive being CEO Brian Armstrong’s second choice name. He was told by employees that he couldn’t call his initiative, “Manifest DeFi-nity.”

☕️ CryptoPunks Take Paris! 🇫🇷 🥖

The long-talked about CryptoPunks exhibit is finally on display at the Centre Pompidou and it’s the talk of the town.

The exhibition entitled, “Policies of the Immaterial: From Certificate to Blockchain,” displays the work of 13 artists from around the world. CryptoPunk #110 is prominently featured among them.

According to the museum’s curators, the exhibition is intended to be an “original study of the crypto-economy ecosystem and its impact on definitions and boundaries of artworks, creators, collections, and the audience.”

“It’s a real honor, obviously, but it’s also quite a surprise,” said Matt Hall, co-founder of Larva Labs, the creator of CryptoPunks. “It has been a wild ride, certainly over a relatively short number of years.”

The exhibition will run until January of 2024.

Exciting development, but CryptoPunks in Paris will never rival the impact of Rugrats in Paris! on the French art scene.

Spilling the Beans

USA v. Crypto 🥊

In America, SEC Chairman Gary Gensler has become crypto’s boogeyman.

Gensler’s pervasive, unclear legislation has caused quite a few crypto exchanges to pull up stakes and shut down American operations entirely. He also looks spooky.

And rather than enter into a period of self reflection in which Gary might wonder to himself, “Am I killing the spirit of American entrepreneurship?” 

Gensler has doubled down on the SEC’s less than stellar position.

On March 29th, Gensler testified before the House Appropriations Subcommittee on Financial Services.

Gensler was asked by Congressman Sanford Bishop (D-GA) if he had “any plans to issue a rule to clarify how securities laws apply to digital assets?”

Gensler held firm in his current definition that digital assets are, in fact, securities.

“The regulations actually already exist, sir,” replied Gensler. “They’re called the securities regulation, and so there are disclosure regulations for when somebody tries to raise money from the public.”

Now, the existing rules in place are dependent upon the definition of crypto as a security. 

But more than applying a decades-old label to a years-old tech, Gensler gets really frustrated when crypto companies don’t follow his incredibly vague, case-to-case regulations.

Gensler wrapped up by lashing out at these companies, insisting as always that, “we’ve seen the Wild West of the crypto markets, rife with noncompliance.”

And so many crypto companies have already been burned by the current framework.

Here's one enraging clip from Gensler's recent hearing in which he can't quite seem to decide whether or not his agency is regulating the world's second largest crypto:

As is alluded to in the clip, there have been more than fifty crypto-related enforcements conducted by the SEC in the past three years alone.

Kraken famously was fined $30 million for violating securities laws.

Genesis and Gemini are both involved in an SEC lawsuit for offering unregistered securities.

Coinbase has received a “Wells Notice” which means that enforcement action is likely coming against them soon. If we had to guess, it will be related to unregistered securities.

And Coinbase isn’t having this.

As you saw in our espresso shots, Coinbase already has its eyes on overseas expansion.

Coinbase CEO, Brian Armstrong, has publicly stated that, “I think if a number of years go by where we don’t see regulatory clarity emerge in the US, we may have to consider investing more in other regions of the world.”

And we saw a stellar example of regulatory clarity yesterday when European Parliament passed their new crypto licensing framework.

If Gensler and the SEC are allowed to run rampant with their current regulation, we may see a de facto migration of crypto companies and providers to greener pastures.

Gensler won’t ban crypto outright. But he’ll make it so impossible for crypto to exist that it will be forced out of the American market.

That is, unless Gensler goes before crypto does.

Republican lawmakers are already considering legislation that would remove Gensler from his post.

This past Tuesday Gensler was called before the House of Representative Committee on Financial Services to explain what exactly he’s doing.

And we hate to leave you on a cliffhanger, but the political countermovement against Gensler has enough for an entire deep dive.

But in the meantime, we’ll keep track of this face-off.

Gensler has repeatedly called crypto, “the Wild West” but now it appears it’s a duel at sundown in front of the clock tower.

And only one of these cowpokes is walking back into that dusty saloon.

Meme of the Day

In case you missed it: beanie babies are securities now.

Crypto 101

 Tokenomics: Slightly more complicated than a portmanteau of “token” and “economics.”

Tokenomics is the study of a token’s behavior and how they fluctuate given the total supply, market demand, utility, speculation and technology behind any given token.

It’s also a study of how human behavior can be influenced and incentivized given all of these elements of a particular token.

The Last Sip

As a part of Coinbase’s International Expansion Drive, Coinbase also intends to open offices in:

• North Korea

• Atlantis

• Gary Gensler’s Mom’s House

Stay Caffeinated,

Coffee & Crypto Team

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