Crypto’s Big Washington Week | Eye Scanning For Crypto

Exchange disputes U.S. jurisdiction. Crypto bills catch wind on the Hill.

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Nina Bambysheva Senior Reporter, Forbes Money & Markets
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Steven Ehrlich Director, Forbes Digital Assets
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BINANCE SEEKS DISMISSAL OF CFTC COMPLAINT

The world’s largest cryptocurrency exchange and its cofounder Changpeng Zhao asked a U.S. federal judge to dismiss a lawsuit filed by the Commodity Futures Trading Commission. The motion and the accompanying brief, filed on Thursday, argue the agency is “stretching the territorial reach of its jurisdiction” by trying to regulate foreign individuals and corporations that reside and operate outside the United States and is using legal theories relying on inconsistencies while also making unsound claims and irrelevant allegations.

The CFTC sued Binance, Zhao and former chief compliance officer Samuel Lim in March, alleging the exchange allowed Americans to trade crypto derivatives without registering with the agency as a futures commodity merchant. Lim has also filed a motion to dismiss the case against him.

CRYPTO BILLS CATCH WIND ON THE HILL

A crypto-friendly bill cleared two House committees this week, and now moves to the chamber’s floor. Known as the Financial Innovation and Technology for the 21st Century Act, the legislation seeks to dispel regulatory uncertainty looming large over the embattled industry. Part of the plan includes giving the CFTC more authority in regulating digital assets while imposing new boundaries on the less crypto-friendly Securities and Exchange Commission.

A stablecoin bill is also up for a potential floor vote, though the House Financial Services Committee passed it without bipartisan support Thursday.

The same evening, the Senate passed the 2024 National Defense Authorization Act (NDAA), which includes a provision that tightens oversight of financial institutions engaged in crypto trading and takes aim at “anonymity-enhancing” technologies and services such as mixers that can obfuscate the origins and ownership of digital assets.

CURRENT PRICE OF TOP 5 COINS (7-Day % Change)

Coin

Price

Percent Change

Bitcoin (BTC)

$29,301

1.9%

Ether (ETH)

$1,874

1%

Tether (USDT)

$0.99

0%

XRP (XRP)

$0.71

9%

Binance Coin (BNB)

$243

0.5%

Source: Forbes Digital Assets. Prices as of 4:00 p.m. on July 28, 2023.

The True Value Of Cryptocurrencies

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WHAT TO KNOW ABOUT WORLDCOIN, THE EYEBALL-SCANNING CRYPTO IDENTITY PROJECT

After years in the making, the Worldcoin project, spearheaded by OpenAI chief Sam Altman, finally launched on Monday. Its core offering is called World ID, which the company describes as a "digital passport" that proves that its holder is a real human, not an artificial intelligence (AI) bot. To get a World ID, customers sign up to do in-person iris scans using Worldcoin's Orb device. In exchange, they receive Worldcoin crypto tokens. “The goal is simple: a global financial and identity network based on proof of personhood. This feels especially important in the AI era,” Altman said.

After attracting more than 2 million users during its beta test that occurred mostly in developing countries, Worldcoin announced its intention to ramp up operations to 35 cities across 20 countries.

The project has raised concerns about the use of biometric data—the eye scans—to verify users’ identity, particularly the privacy risks involved with collecting, storing and employing such data. The project incentivized early users to sign up in exchange for some of the cryptocurrency, which could be considered bribes for giving up personal data.

France's privacy watchdog CNIL told Reuters on Friday that the legality of Worldcoin’s biometric data collection "seems questionable." Britain's data regulator has reportedly stated it will be making “further inquiries.”

THIS STARTUP WANTS TO DEANONYMIZE BLOCKCHAIN

Another bit of bad news for the anonymity-loving world of crypto: blockchain analytics firm Arkham Intelligence has created a marketplace that allows people to buy and sell blockchain data. Privacy purists are up in arms. Read more.

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