This week decoded

This week in digital asset federal policy, a group of Senate Democrats released a public statement calling for a closer bipartisan partnership with Republicans and more time to build support for market structure legislation.

Treasury issued a broad ANPRM on implementation of the GENIUS Act. The SEC approved rule changes on generic listing standards for exchange-traded products that hold spot commodities, including digital assets.

Upcoming: I will be in NYC early this week to discuss U.S. emerging tech policy at events around UNGA. If you’re there, let me know!

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Congress

Hearings

• Last week
  • The House Financial Services Subcommittee on Oversight and Investigations held a hearing on Fraud in Focus: Exposing Financial Threats to American Families, where Chair Dan Meuser announced a new online resource to help constituents recognize and report nine red flags of scams, including impostor schemes, phishing, card and check fraud, crypto scams, and elder exploitation. 
• This week
  • Congress is in recess.

Legislation

• The House passed a resolution concerning the District of Columbia, which included an unrelated section that retroactively adds the House-passed Anti-CBDC Surveillance State Act to the legislative text of the House-passed CLARITY Act. (Text)

Correspondence

• Sens. Elizabeth Warren (D-MA), Richard Blumenthal (D-CT), Chris Van Hollen (D-MD), Jeff Merkley (D-OR) and Bernie Sanders (D-VT) and Reps. Melanie Stansbury (D-NM), Betty McCollum (D-MN) and Rashida Tlaib (D-MI) sent a letter to White House Special Advisor for AI and Crypto David Sacks requesting information on whether Sacks has exceeded the 130-day term limit for serving in his role. (Letter)

• Rep. Sean Casten (D-IL) and Sen. Jeff Merkley (D-OR) sent a letter to the Securities and Exchange Commission (SEC) requesting oversight of Tron founder Justin Sun and multi-million dollar investments into President Donald Trump’s digital assets projects. (Letter)

Publications

• House Financial Services Chair French Hill (R-AR) published an op-ed in CoinDesk on The Clock Is Ticking on Crypto Market Structure Legislation in the U.S., saying, “Without a market structure framework that allows innovation while protecting consumers and investors, the U.S. digital asset ecosystem will not thrive, and we risk ceding ground to Latin America’s fast-moving adoption and Europe’s harmonized regulatory regime.” (Op-ed)

Trump Administration

Treasury Department

• Treasury issued an advance notice of proposed rulemaking (ANPRM) to solicit public comment on questions relating to the implementation of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, specifically regarding regulatory clarity, prohibitions on certain issuances and marketing, Bank Secrecy Act (BSA) anti-money laundering (AML) and sanctions obligations, the balance of state-level oversight with federal oversight, comparable foreign regulatory and supervisory regimes, and tax issues. The comment period ends October 20. (Federal Register)

Securities and Exchange Commission (SEC)

• The SEC voted to approve proposed rule changes by three national securities exchanges to adopt generic listing standards for exchange-traded products that hold spot commodities, including digital assets. As a result, the exchanges may list and trade Commodity-Based Trust Shares that meet the requirements of the approved generic listing standards without first submitting a proposed rule change to the Commission. (Press release)

Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC)

• The SEC and the CFTC will hold a discussion on regulatory harmonization efforts on September 29.

Noteworthy Quotes and Events

ADMINISTRATION

Securities and Exchange Commission (SEC)

• On SEC approval of the generic listing standards for ETPs, Commissioner Hester Peirce said, “After notorious delay and judicial prodding, the Commission previously provided an initial path for an exchange to list spot crypto-based ETPs. Specifically, the Commission issued orders stating that an exchange could meet its obligations under Exchange Act Section 6(b)(5) by demonstrating that the exchange has a comprehensive surveillance-sharing agreement with a regulated market of significant size related to the underlying or reference assets because such an agreement would assist in detecting and deterring fraud and manipulation related to that underlying asset. Market participants for crypto-based ETPs expressed concerns with this standard. Today’s approval order addresses these concerns by providing alternative rules-based eligibility criteria for the underlying holdings of commodity-based ETPs, including crypto asset-based ETPs.” (Statement)

CONGRESS

Market Structure

• Sens. Ruben Gallego (D-AZ), Mark Warner (D-VA), Kirsten Gillibrand (D-NY), Cory Booker (D-NJ), Catherine Cortez Masto (D-NV), Ben Ray Luján (D-NM), John Hickenlooper (D-CO), Raphael Warnock (D-GA), Adam Schiff (D-CA), Andy Kim (D-NJ), Lisa Blunt Rochester (D-DE), and Angela Alsobrooks (D-MD) released a statement saying, “Last week, we released a framework on market structure legislation, highlighting our desire to work on this issue. As we stated then, digital assets are a $4 trillion global market that will require a considered and bipartisan approach to regulation. We hope our Republican colleagues will agree to a bipartisan authorship process, as is the norm for legislation of this scale. Given our shared interest in moving forward quickly on this issue, we hope they will agree to reasonable requests to allow for true collaboration. For this process to work, it must start from a place of mutual understanding. We look forward to engaging with our Republican counterparts in such a manner.” (Press release)

• In an interview with Politico, Rep. Tom Emmer (R-MN) said, “The Senate needed more time to work through market structure. They’ve just not been involved in this like the House. The House has been working on this particular bill for the last five years with the CLARITY Act. The best way to describe the situation, which the White House understands, is having GENIUS without a regulatory market structure bill like CLARITY, is like having a cell phone without cell towers. It just, you got to have both to make the system work. I think the Senate’s doing a good job of working through it. What we’re hearing is that the Senate’s going to mark up their version sometime this month, that the Senate Agriculture Committee will put out whatever they’re going to do; they’re part of it. Sometime in October, they expect to move it through committee, and we are hopeful that there’s going to be a vote before the end of the year.” (Politico)

Hearings

• In the House Homeland Security Committee Oversight, Investigations and Accountability Subcommittee hearing on How China Uses Illegal Marijuana to Build a Criminal Networks, Rep. Mark Green (R-TN) asked about the use of digital assets by Chinese illicit finance networks:
  • Rep. Mark Green: “And are they using crypto currency?”
  • Christopher Urben, Managing director of Nardello & Co.: “Yes. So certainly, in the last two years, the crypto component of the money laundering cycle has taken, taken. A much more substantial role as crypto is being used more and more globally, it’s actually taken on more of a role in the money laundering process because the Mexican cartels would like to receive those funds in crypto. So it’s part of the process.”
  • Rep. Mark Green: “Now, how do you recommend we deal with this, given that we now have this, these electronic transfers, makes it rather difficult to I want to stop it. I’m just trying to get a sense from you as experts as to how we can do it.”
  • Christopher Urben: “So the networks that exist right here within the United States, those Chinese money launders on a daily basis pick up that bulk cash. So we were talking about earlier of this interagency task force that was designed to go after Chinese organized crime with severe penalties, such as the racketeering laws should be, we should be stood up and funded. That’s the first thing. The second thing is, in terms of what we saw last couple weeks ago from FinCEN, that directive to the banking industry to enhance compliance red flag reporting on the money laundering transactions. And lastly, WeChat itself needs to be impacted. It cannot be utilized by Chinese money launderers on an ongoing basis, again, in this trusted network where they can communicate and move money.”
  • Rep. Mark Green: “The suspicious activity reports are not enough for this large sum of money.”
  • Christopher Urben: “It’s not enough in the sense that financial institutions, crypto companies, wire remitters, need to enhance and increase the suspicious activity reporting and their AML Compliance to focus on Chinese money laundering networks.”

Miscellaneous

• Rep. French Hill (R-AR) posted, “I hope they’ll [the Senate] use the CLARITY Act, that got 78 votes from Democrats in the House, as their base text for passing their own bill for market framework.”

• House Committee on Agriculture posted, “RepFrenchHill is right: In July, the House overwhelmingly passed the bipartisan CLARITY Act by a vote of 294-134. The time is now. We must keep pace with the rest of the globe by enacting digital asset market structure by the end of the year.”

• Sen. Marsha Blackburn (R-TN) posted, “Tennessee has embraced digital innovation because our state has all of the right ingredients for companies to thrive. It was great to join Bitcoin Park’s ‘Imagine IF’ Summit today to share what the Senate is doing on crypto tax policy.”

• Sen. Elizabeth Warren (D-MA) posted, “America First? Nope. Donald Trump is selling out our national security through shady foreign crypto deals that enrich his family’s crypto firm. Any crypto bill must ban Trump, his family & senior officials from profiting. Otherwise, Congress is turbocharging corruption.”

• Warren also posted, “The Trump Administration is cashing in on foreign crypto deals — and weakening guardrails that protect our advanced technology. We should not pass any crypto legislation without shutting this down.”

• Sen. Chris Coons (D-DE) posted, “President Trump and his family are pocketing billions while working families’ wage continue to shrink. This is corrupt, it’s wrong, and it’s a deep disservice to American taxpayers.”

• Rep. Sara Jacobs (D-CA) posted, “Grocery prices are up, tariffs are piling on, job numbers are down – and Trump is too busy lining his own pockets with crypto schemes to care.”

• Rep. Pramila Jayapal (D-WA) posted, “A couple weeks ago, Big Tech billionaires & wealthy CEOs flocked to the White House to praise Trump. In return for their loyalty, donations to Trump’s campaigns, and purchases of his crypto scam, he’s giving them massive handouts. Trump is a president for billionaires, not us.”

• Rep. Tom Emmer (R-MN) posted, “It was a pleasure to moderate a panel discussion today on the future of digital asset policy. Our goal is clear: we must get the CLARITY Act to POTUS’ desk ASAP. Thanks to SpeakerJohnson for hosting this event and ensuring crypto remains a HouseGOP priority.”

About Zero One Strategies

Zero One Strategies is a boutique government relations practice dedicated to navigating the complex landscape of U.S. federal policy in emerging technologies. As advancements in technology continue to outpace regulatory frameworks, Zero One Strategies aims to provide strategic guidance and bipartisan advocacy for innovators and businesses operating at the forefront of technological development.

The practice focuses on key areas such as artificial intelligence, blockchain, decentralized technologies, cybersecurity, data, and digital infrastructure, as well as the multiple policy issues impacting these sectors, including tax and financial services.

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