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All that and more in this 100th recap issue (and 196th issue overall) of Citation Needed! To celebrate the milestone, I'm running a membership drive with a goal of 50 new paid subscribers by issue #200. Please consider joining today and helping me reach it!

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$40 million in seized crypto held by the US Marshals was stolen in 2024, and crypto sleuth zachxbt has now linked the thefts to the son of a contractor managing the agency's crypto assets. The incident has renewed concerns about the government's ability to manage its crypto holdings.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

In crime
Something funky’s been happening with the US Marshals’ pile of seized crypto — the crypto they’re tasked with hanging on to as cases wind through the courts.b In March 2024, almost $25 million was inexplicably removed from a Marshals-controlled wallet containing funds connected to the 2016 Bitfinex hack. In October 2024, crypto sleuth zachxbt noticed that $20 million of the Marshals’ crypto assets had apparently been stolen, with the thief laundering the funds through various exchanges [W3IGG]. The next day, $19.3 million of those funds were mysteriously returned.

Now, zachxbt has linked the stolen government funds — as well as stolen assets belonging to other victims — to a man named John Daghita. According to zachxbt, Daghita was previously known only as “Lick” online, and was active in Telegram chat rooms where crypto thieves boasted about their wealth. When another thief taunted Lick for “only having $6 mil”, Lick evidently decided the only way to defend his honor was to go on a screenshare call to show proof of ownership by transferring funds between wallets. In doing so, he exposed several wallet addresses, and zachxbt was able to trace some of the crypto back to the US government wallet addresses.1415

Shockingly, Daghita’s father is reportedly Dean Daghita, the owner of an IT company called Command Services & Support (CMDSS). In November 2024, CMDSS began a contract with the US Marshals to provide management services for their seized crypto assets.16 The contract is still active. While Coinbase has since July 2024 managed what the Marshals call their “class 1” crypto assetsc — the most popular cryptocurrencies like bitcoin, ether, and Tether — CMDSS was chosen to manage the “class 2” through “class 4” cryptocurrencies.d

While it could be that the younger Daghita gained privileged information or access to the Marshals’ crypto wallets through his father, it’s not clear how that would have enabled thefts in the months prior to the contract award. I am hopeful that a FOIA request I filed with the Marshals earlier this week will shed some light on that. It’s also curious that many of the assets Lick siphoned from government wallets fall into the “class 1” category, which CMDSS is not involved in managing. The Marshals have declined to comment on the matter, citing ongoing investigations.17

The incident has renewed concerns about the US government’s ability to prudently manage crypto. In 2022, a Department of Justice Inspector General report identified “challenges” in the Marshals’ crypto custody practices, including “lack of comprehensive inventory management” and “inadequate, incomplete, and conflicting policies and procedures”.18 Last year, the Marshals struggled to provide even an estimate of how much crypto they held. An IT contractor who was passed over for a contract with the Marshals explained to CoinDesk, “As far as I’m aware, the USMS is currently managing this with individual keystrokes in an Excel spreadsheet. ... They’re one bad day away from a billion-dollar mistake.”19 Later in 2024, the Marshals disclosed in response to a FOIA request that they held around 28,988 BTC (more than $2.5 billion at today’s prices), though they did not provide an accounting of their other tokens.20

After zachxbt’s allegations, a wallet linked to the thefts launched a “John Daghita” token, with the ticker $LICK, on the pump.fun memecoin launchpad. I couldn’t help but laugh when I read reporting from Cointelegraph that “The deployer of LICK held 40% of the total supply at launch, according to blockchain data visualization platform Bubblemaps, a level of concentration often viewed as a red flag in early-stage token launches.”21 I’m not sure the degree of concentration is really the primary red flag here.

The SEC has dismissed with prejudice an enforcement action against the Winklevoss twins’ Gemini crypto exchange. This comes after the Winklevosses contributed $4.4 million to Trump, backed his sons’ ventures, and committed $21 million to elect pro-Trump, pro-crypto lawmakers.

To date, the SEC has paused, dismissed, or otherwise ended crypto lawsuits or investigations against Aave, Binance, Coinbase, ConsenSys, Crypto.com, Cumberland DRW, Dragonchain, Gemini (twice), Hex, Immutable, Kraken, Ondoe, OpenSea, PayPal, Ripple, Robinhood, Tron, Uniswap, Yuga Labs, and Zcash.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

SEC
The SEC has dismissed with prejudice its case against the Winklevoss twins’ Gemini cryptocurrency exchange. Filed in January 2023, the agency alleged that the company had violated securities laws with its Earn program, in which Gemini partnered with the Genesis crypto lender to offer Gemini customers up to 7.4% APY on assets they loaned through Genesis. When Genesis suffered major losses on loans to Three Arrows Capital [W3IGG] and Babel Finance [W3IGG], the company went under, and around $900 million in Gemini customers’ assets were suddenly locked up in bankruptcy proceedings [I17, 18, 42]. Now, the SEC has evidently decided no harm, no foul, stating: “The 100 percent in-kind return of Gemini Earn investors’ crypto assets through the Genesis Bankruptcy and the settlements noted above, and in the exercise of its discretion, the Commission believes the dismissal of the claims against Defendant is appropriate.”26

While “but we gave the money back” isn’t normally a successful defense (just ask Sam Bankman-Fried), contributing around $4.4 million to Trump’s campaign,27 donating an undisclosed amount to Trump’s ballroom project,28 spending $1 million to be among the first members of the Trump family-run Executive Branch club,29 investing in Donald Trump Jr.’s American Bitcoin venture,30 and committing $22 million to political projects backing pro-Trump crypto advocates in the midterms seems to have gone a long way. The SEC case was paused back in April [I81], and, as I wrote then, “it’s widely understood that these [pauses] mark the end of SEC scrutiny for these companies.” Two months later, as the Winklevoss twins stood behind Trump in the Oval Office as he signed the GENIUS Act stablecoin bill, Trump remarked about the crypto industry: “I got you guys out of so much trouble”. Thanking the Winklevosses specifically, he added: “They’ve got plenty of cash, and it’s great that you’re on our side.” [I89]

The dismissal of the Gemini Earn enforcement action adds to a long list of crypto-focused cases and investigations that the SEC has paused, dismissed, or otherwise ended. That list also includes: Aave [I99], Binance [I85], Coinbase [I78], ConsenSys [I78], Crypto.com [I81], Cumberland DRW [I79], Dragonchain,31 Gemini (a separate investigation) [I78], Hex [I82], Immutable [I80], Kraken [I79], Ondo Finance [I98], OpenSea [I78], PayPal [I83], Ripple [I80], Robinhood [I78], Tron [I78], Uniswap [I78], Yuga Labs [I79], and the ZCash Foundation [I99].

The crypto industry’s “educational nonprofit” has also launched an initiative to fund Congressional staff positions after participants go through weeks of “training” on “emerging technologies like crypto, AI, biotech, and defense tech”.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

The crypto industry’s “educational nonprofit”, the American Innovation Project [I91, 98], has launched a program to fund Congressional staff positions on the House Financial Services and Agriculture Committees — committees responsible for crypto oversight — after they go through weeks of “training” on “emerging technologies like crypto, AI, biotech, and defense tech”. The program will target young, [begin strikethrough] impressionable [end strikethrough] eager to learn college graduates.

The Fairshake PAC timed a press blitz about the nearly $200 million they’re brandishing towards members of Congress just ahead of a Senate Ag vote on crypto market structure. It passed, and amendments to address Trump’s crypto corruption or prohibit bailouts of crypto firms were shot down.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

In Congress
The Senate Agriculture Committee quickly voted to advance its version of crypto market structure legislation to the full Senate. The vote split along party lines, with all 12 Republicans voting in support and 11 Democrats voting against. While all committee Democrats ultimately voted against advancing the bill, pro-crypto Democrats Adam Schiff (D-CA) and Cory Booker (D-NJ) both spoke positively of crypto, with Booker gushing about “extraordinary humanity-changing breakthroughs that could give Americans a financial system that is faster, cheaper, and more inclusive”.37 No amendments from Democrats were approved, including ones that would have prohibited elected officials and their family members from profiting from crypto, that would require the CFTC to appoint at least four commissioners,e or that would prohibit bailouts of digital asset issuers.

Amid all this, the crypto industry has amassed at least $315 million to spend in the midterms — more than double their recordbreaking 2024 spending that helped install Trump and members of Congress who either support his atrocities or are too craven to do anything about them.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

In elections and political influence
Although most of the pro-crypto super PACs are waiting until the January 31 filing deadline to disclose their 2025 fundraising details, Fairshake is previewing its disclosure with a press blitz publicizing their $193 million war chest for the midterms.41 That they can brandish this figure right around when Senators are deciding how to vote on crypto market structure legislation is, from their perspective, fortunate timing.

While most other pro-crypto super PACs have yet to submit their disclosures, public statements from the Fellowship PAC, Digital Freedom Fund, and other new crypto super PACs put the industry’s midterm fundraising total at a minimum of $315 million. To put that in perspective: in 2024, the crypto industry’s $133 million in spending surpassed traditional lobbying juggernauts like Big Oil and Big Pharma, making it one of the largest corporate political forces in America. Now they’ve amassed more than double that.

The answer, of course, is that they never actually cared about these principles at all. In fact, many of these executives have long made it clear that authoritarianism isn’t just collateral damage in their pursuit of business-boosting deregulation, but a desirable outcome.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

The answer, of course, is that they never actually cared about these principles at all. Anyone who believed they did was dangerously naive. These were marketing slogans and talking points, deployed when convenient to ward off regulation and burnish crypto’s reputation, discarded the moment they might conflict with business interests. The atrocities of Trump’s regime have clearly done nothing to lose crypto’s support: Coinbase, Ripple, and Andreessen Horowitz have each contributed another roughly $25 million apiece to the political machine that installed Trump and bought Congress.9 Gemini’s Winklevoss twins and Kraken have contributed at least $22 million and $2 million, respectively, to new pro-crypto super PACs and dark money groups that are even more explicitly Trump-aligned [I91, 93].a

Many of these executives have long made it clear that authoritarianism isn’t just collateral damage in their pursuit of business-boosting deregulation, but a desirable outcome. Marc Andreessen, an outspoken Trump supporter, adviser, and recruiter,10 published a 2023 manifesto on “techno-optimism” that explicitly cited as one of its “patron saints” Filippo Tommaso Marinetti — co-author of the Fascist Manifesto that formed the platform for Mussolini. Coinbase and Andreessen Horowitz alum Balaji Srinivasan has promulgated the idea of the “network state”, an autocratic proposal to create tech-governed city-states free from democratic oversight.11 Current Coinbase CEO Brian Armstrong, Andreessen, and the Winklevoss twins have all expressed support for the concept.12 And the Winklevosses have even funded a proposed network state called Praxis, whose CEO rather overtly embraces fascism.13

For years, crypto executives have touted cryptocurrency’s supposed anti-authoritarian and human rights credentials. But where are they when their beloved president claims Alex Pretti’s lawful gun ownership justified his killing, or when ICE leaders tell subordinates to enter homes without warrants?

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

For years, crypto executives have touted cryptocurrency’s supposed anti-authoritarian and humanitarian credentials — whether to fend off regulators or convince the public that crypto has viable use cases beyond speculation. The technology is necessary and good, they claim, because it could support dissidents living under authoritarian regimes, help persecuted groups escape their oppressors, shield people from surveillance, or somehow inherently protect citizens from government overreach. Many of them spent years posting piously about the importance of due process and protection from abuses of power, or shared quotes from Martin Luther King Jr. and Frederick Douglass about freedom.

“We will hold governments accountable if we see bad activity, to protect your rights.” Coinbase CEO Brian Armstrong, May 2025
“I stand for human rights and believe that evil prevails when good men do nothing.” Kraken founder and chairman Jesse Powell, February 2022
“It's also hard to believe how some people want to make justice a political issue. It’s a human rights and dignity issue.” Gemini co-founder and president Tyler Winklevoss, June 2020
“It’s interesting to see who is standing up in favor of unlimited, unaccountable, un-appeal-able, unconstitutional power wielded by unelected bureaucrats and rogue politicians.” Andreessen Horowitz general partner Marc Andreessen, December 2024
“Freedom of all kinds is worth fighting for - economic, speech, due process, etc.” Coinbase CEO Brian Armstrong, May 202

And yet now these voices are silent on the authoritarianism unfolding before us. Where are their defenses of the Constitution when the president claims Pretti’s lawful gun ownership justified his killing,6 or when ICE leaders tell subordinates to enter homes without warrants?7 Where are their warnings about surveillance states now that ICE is photographing protesters for their “domestic terrorist” lists and Palantir is contracted by the government to build databases of people living in the US they can target for raids?8 In 2022, they were incensed when Canadian authorities froze bank accounts belonging to truckers protesting vaccine mandates (and delighted for the opportunity to promote crypto as an alternative funding mechanism) — but now, when ICE agents murder bystanders and invent pretexts that footage shows are false, where is the righteous outcry against state violence towards those exercising their right to protest?

As ICE terrorizes communities, crypto executives who spent years posting about freedom have gone conspicuously silent. But behind the scenes, they’ve contributed at least $315 million — more than double their record 2024 spending — to elect more lawmakers to enable this administration.

https://www.citationneeded.news/issue-100/

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The SEC is in a similar situation, having just lost its last Democratic and crypto-cautious Commissioner, Caroline Crenshaw. In her last speech as a Commissioner she warned of “dire repercussions” from the SEC’s deregulatory pivot, drawing comparisons to the period prior to the Great Depression.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

Trump’s strategy to control the regulators is also playing out over at the SEC, where the single remaining Democratic and crypto-cautious Commissioner Caroline Crenshaw has departed after her renomination vote was canceled in December 2024 after complaints from the crypto industry.22 In her last speech, she expressed concern that the SEC is “shrouding its policymaking in darkness, shunning public comments and, instead, relying on hidden voices to drive its agenda.”22 She summarized the past year:

“The appetite to deregulate has been rapacious; the analysis of the costs and benefits of our policies has been non-existent; and, the repercussions, I would argue, could be dire. We live in an echo chamber where politicians and policymakers make their own truth through repetition. But, the markets have a way of correcting themselves—not always immediately, but over time. So, I think the true advisability of these policies will reveal themselves eventually. I certainly wouldn’t be alone in analogizing the trend toward deregulation in the current environment to the period prior to the stock market crash in 1929.”

The Senate has confirmed the CFTC’s new Chairman, Michael Selig. He has very minimal regulatory experience, and is now the only Commissioner on what is supposed to be a five-person bipartisan Commission.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

The CFTC has a new Chairman now that the Senate has confirmed Michael Selig. Selig’s background is primarily in private practice representing crypto clients like Paradigm and eToro.20 In 2025, he briefly served as chief counsel for the SEC’s crypto task force, but besides that, Selig has extremely minimal regulatory experience — particularly in the many non-crypto markets the CFTC is expected to regulate.

Selig is also the only commissioner at the normally five-person CFTC, as Trump has seized control of regulators by appointing his own loyalists without appointing replacements for departing commissioners. Acting Chair Caroline Pham had previously announced she planned to leave when a chairman was appointed, and she has followed through on that promise. She immediately rocketed through the revolving door right into the lap of the crypto firm MoonPay, where she is now chief legal and administrative officer.21 You might recognize MoonPay as a frequent Trump crypto partner, helping process payments for both the $TRUMP memecoin and for Melania Trump’s 2021 NFT projects. You also might remember that they snagged that lucrative Trump memecoin partnership only weeks after attempting to make a $250,000 contribution to Trump’s inaugural committee, but got scammed instead [I88].

The Trump family’s World Liberty Financial crypto project has applied for a national trust bank charter. If approved, the Comptroller of the Currency — who serves at the pleasure of the President — will be expected to enforce the law against Trump’s own company and its competitors.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

The Trump family’s World Liberty Financial crypto company has announced that they have applied for a national trust bank charter with the Office of the Comptroller of the Currency, through a proposed entity called World Liberty Trust Company. Senator Elizabeth Warren quickly sent a letter to Comptroller of the Currency Jonathan Gould to urge him to delay the review of World Liberty Financial’s application “until President Trump divests from WLF and eliminates all financial conflicts of interest involving himself or his family and the company.” She wrote:27

“If the application is approved, you would promulgate rules that influence the profitability of the President’s company. You would also be responsible for directly supervising and enforcing the law against the President’s company—and its competitors. You would be in charge of these functions while serving at the pleasure of the President. In effect, for the first time in history, the President of the United States would be in charge of overseeing his own financial company.”

Trump has claimed “the leaker” has been jailed, seemingly referring to a group of wallets that made large profits from Polymarket bets with apparent advance knowledge of US military action against Venezuela. One such wallet profited around $410,000.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

In prediction markets
After the US military kidnapped Venezuelan President Nicolás Maduro, observers were quick to notice that several Polymarket accounts had all placed large bets on a market pertaining to whether Maduro would be removed from power by the end of January, and other Venezuela-related markets. One account began placing bets in late December, and continued to add thousands of dollars to its positions right up to the day Maduro’s capture was announced, ultimately purchasing $32,000 in shares. The trader profited $410,000 when their predictions came to pass, leading many to believe they had access to inside information.29

Table of closed Polymarket bets Maduro out by January 31, 2026? 436,759.6 Yes at 7¢ Total bet $32,537.28 Amount won $436,759.61 $404,222.33 (1,242.34%) Trump invokes War Powers against Venezuela by January 31? 5,371.7 Yes at 5¢ Total bet $249.99 Amount won $2,714.64 $2,464.65 (985.91%) Market icon Will the U.S. invade Venezuela by January 31, 2026? 17,857.9 Yes at 6¢ Total bet $999.99 Amount won $3,143.26 $2,143.27 (214.33%) US forces in Venezuela by January 31, 2026? 1,197.8 Yes at 12¢ Total bet $146.00 Amount won $1,197.77 $1,051.78 (720.4%)

Days later, Representative Ritchie Torres (D-NY) introduced a bill seeking to prohibit elected officials and other politicians and staff from participating in prediction markets connected to “government policy, government action, or political outcomes” when they possess or could obtain inside information.30

Then, on January 14, Trump said in a press conference that “The leaker [on Venezuela] has been found and is in jail right now” and would likely face a long sentence. He also noted that “there could be some others”.31 The identity of the leaker, how they gained access to sensitive information, and whether they were also the person who placed the bet has not been disclosed, nor has the charge on which they’ve been jailed.

Former NYC Mayor Eric Adams is fending off rug pull allegations after a wallet connected to his “NYC Token” project extracted almost $1 million in liquidity less than an hour after launch, crashing the token price.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

Former New York City Mayor Eric Adams launched “NYC Token”: half memecoin, half social experiment to determine how many glaring red flags you can stuff into one pitch and still convince people to buy. A figurehead who Trump had to rescue from federal bribery and corruption charges: check. An unidentified team running the project: check. Massive quantity of tokens to be held back in “reserve” with no details around custody, access control, or planned use: check. Pointers to documentation that doesn’t exist: check.c Lofty and numerous promises — educating kids about crypto, combatting “antisemitism” and “anti-Americanism” in NYC, and providing financial aid to students seeking higher education — with no specifics whatsoever about how they will fulfill them: check.

With all those red flags flapping in the wind, it’s perhaps no surprise that the token launch quickly turned into disaster [W3IGG]. Almost immediately after the token was launched, the project’s liquidity providerd withdrew more than $2.4 million in USDC from the one-sided liquidity pool,e causing the token price to plummet by about 85%. Though the project team later claimed they had been “rebalanc[ing]” liquidity, they only returned $1.5 million to the liquidity pool, with more than $900,000 of it left sitting in the LP wallet. That same wallet then began making automated purchases of $NYC every minute, which the team claimed is part of a TWAP (time-weighted average price) buying strategy. This is a strange explanation that doesn’t address why the third-party liquidity was withdrawn, why it was only partially returned, or why the remaining USDC is now being used in a way that seems intended to create the appearance of sustained demand without any new money actually coming in.

Since then, Adams has been fighting off allegations that he “rug pulled” the token. It seems too early to tell on that front, as the unaccounted funds are still sitting in the crypto wallet — perhaps to be restored to the liquidity pool, or perhaps to be withdrawn once whoever controls the wallet thinks attention has moved elsewhere. Some have speculated that this was all a way for Adams to surreptitiously accept belated bribes, I guess by having a would-be briber purchase a large amount of the token, and then extracting the funds as we saw. This is certainly possible, I suppose — there are some wallets that spent tens or even hundreds of thousands of dollars to purchase the token. But with Adams out of office and no longer needing to file disclosures, I don’t see why he’d go about it this way rather than just quietly creating a wallet and having people transfer crypto to him directly.

Neither Adams nor the NYC Token team responded to questions about the removal of liquidity, the automated buying strategy, or details about the token, its team, or its plans to follow through on its promises. However, shortly after I sent the questions, the automated token buys stopped.

Meanwhile, Edward Cullen — whose Innovate NY PAC spent nearly $100,000 on AI-generated flyers and other materials to back Andrew Cuomo last October after his last-minute crypto industry appeal — is back. Cullen claims that he pitched the NYC Token idea to Adams last year, and that Adams stole it from him, then “butchered” it for “short-term gain”. Cullen is now threatening to sue, although I’m not sure on what grounds.40

But Coinbase’s flex may have caused something of a power struggle with the White House. “This is President Trump’s bill at the end of the day, not Brian Armstrong’s,” said a source close to the Trump administration.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

This brazen display seems to have caused something of a power struggle between Coinbase and President Trump, who was reportedly infuriated by Coinbase’s surprise “rug pull”. “This is President Trump’s bill at the end of the day, not Brian Armstrong’s,” a source close to the Trump administration told journalist Eleanor Terrett, adding that the White House was considering yanking its support for the bill if Coinbase can’t come up with a satisfactory compromise proposal on stablecoin yield.13 Armstrong later objected to Terrett’s reporting, claiming “The White House has been super constructive here”, but confirming that the White House had directed Coinbase to “go figure out a deal with the banks”.14

The crypto lobby wrote their dream bill. Senators proposed some amendments. Coinbase tweeted their disapproval, and Senate Banking Chair Tim Scott immediately canceled the markup. When you spend $130M, you expect to get exactly what you want.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

Last Wednesday afternoon, Coinbase withdrew its support for the Senate’s draft market structure bill, citing concerns about limits on tokenized stocks and stablecoin rewards, burdensome requirements for defi protocols, and excessive authority granted to the SEC.1 Within hours, Senate Banking Committee Chair Tim Scott (R-SC) canceled the markup hearing scheduled for the following day.

While mainstream news sources are often hesitant to draw cause and effect between two suspiciously timed events, it was too overt even for them, with the New York Times writing that Coinbase had “scuttled” the vote.2 Coinbase further emphasized its degree of control over the Senate when CEO Brian Armstrong stated in an interview with CNBC, “We’ve got a chance to do a new draft and hopefully get back into a markup in a few weeks” — speaking as if Coinbase, not Congress, controlled both the drafting process and legislative calendar.

This is nothing new — just the latest demonstration of the crypto industry’s power over Congress after it spent over $130 million installing allies in the 2024 election. Within weeks, House Agriculture Committee Chair GT Thompson (R-PA) made the new power dynamic explicit when he said how crypto legislation was being drafted in “tripartisan” fashion, with the crypto industry forming the new third political wing of Congress [I76].

In an alternate universe, Congress might be focused on passing laws that don’t elevate the interests of corporations and oligarchs above the everyman. Ones that ensure the stability of the American financial system, protect consumers, address officeholder ethics concerns, and prevent financial crimes. Sadly, in this universe, lawmakers are primarily concerned with satisfying the demands of their newest and most generous campaign contributors. Senate Banking Ranking Member Elizabeth Warren (D-MA) told Politico, “These are folks who think that when they’ve bought themselves a Congress, then they expect it to behave the way they say.”3 After a year of this Congress, it would be hard to argue they’re wrong.

Newsletter: Coinbase calls the shots in the Senate, former New York City Mayor Eric Adams faces rug pull allegations, and a crypto executive is breaking up with Trump

https://www.citationneeded.news/issue-99/

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

Crypto firms are lobbying Trump for tax carveouts. Meanwhile, a new 501(c)(3) they back hosted a private dinner with tax lawmakers — despite rules against “substantial” lobbying. Purely educational, of course.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

In elections and political influence
As the market structure bill plods along, the crypto industry is already eyeing its next punchlist item: tax policy. The Solana Policy Institute penned a letter to President Trump on November 20 urging him to “promote tax clarity for the digital asset economy and American people”, including by creating a de minimis exemption for crypto transactions below $600, making blockchain development eligible for the research and development tax credit, and delaying rules that would require digital asset transactions be reported to the IRS and FinCEN in the same way as cash. The letter also included other requests that the president could achieve with the “stroke of a pen”41 — that is, without needing to go through Congress — including creating defi “safe harbors and sandboxes”, pressuring the SEC and CFTC to create exemptions for crypto, directing FinCEN to carve out non-custodial crypto projects from the Bank Secrecy Act,e and pushing the Justice Department to dismiss the two remaining charges against Tornado Cash developer Roman Storm [I90]. The letter was signed by 62 crypto groups, including Paradigm, various Solana entities, Uniswap, and others.42

Days earlier, the American Innovation Project, an “educational nonprofit” launched in August with backing from the Solana Policy Institute, Paradigm, Kraken, Coinbase, Andreessen Horowitz, DCG, Uniswap, and the Cedar Innovation Foundation pro-crypto dark money group [I91] hosted a private dinner with members of the House Ways and Means Committee and various other pro-crypto Congresspeople to discuss crypto tax policy. As a 501(c)(3), the AIP is prohibited from making a “substantial part of its activities ... attempting to influence legislation”.43 But while many of the AIP’s same backers have directly lobbied President Trump, and the Solana Policy Institute, Paradigm, and Kraken have spent a combined $5.25 million on lobbying around crypto tax issues since 2024,44 the AIP insists that the dinner was purely educational.41

Meanwhile, Binance is all‑in on Trump’s USD1 — and just made Zhao’s partner Yi He co‑CEO. Zhao is banned from managing the company, but Binance and Zhao seems keen to honor only the most technical reading of that rule.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

Since Zhao’s pardon, Binance has ramped up its support for the Trump family’s USD1 stablecoin. The exchange announced a set of new no-fee trading pairs for USD1, meaning that people can now exchange their bitcoin, ether, or various other tokens for USD1 without paying fees for the privilege. Binance has also announced it will convert all assets backing its BUSD stablecoin into USD1. According to BUSD’s latest attestation, that’s more than $55 million that will be converted to USD138 — generating millions of dollars in interest for World Liberty between now and the end of Trump’s term if they maintain those USD1 holdings for that duration.c

As for Zhao’s role at Binance, Trump’s pardon doesn’t nullify the stipulation in Binance’s plea agreement that Zhao be prohibited from “any present or future involvement in operating or managing [Binance]”.39d But since Zhao’s release from prison, it’s been clear he remains closely involved with Binance’s operations. Now his influence is even harder to dispute, as his partner in life, parenthood, and business, Yi He, has been named co‑CEO of the exchange.40 She is also the co-founder and namesake of Zhao’s family office, YZi Labs.

House Judiciary Committee Democrats have published a 27-page staff report on how “Donald Trump has turned the Oval Office into the world’s most corrupt crypto startup operation”.

#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter

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