WORKWEEK

FSOC urges Congress to speed up crypto rules

• The Financial Stability Oversight Council (FSOC) issued a report on Monday in which it urges legislators to focus on passing needed regulation around digital assets. The FSOC is formed by members of top financial regulators such as the SEC, Treasury, Currency Comptroller, the Fed, and CFTC.
• It has been reported that current debates in Congress, mainly around the regulation of the stablecoin market, are still far from reaching consensus and passing legislation. However, the report underlines the importance of speed in the matter, stating that the current lack of jurisdiction by federal agencies and loopholes within securities legislation leaves investors vulnerable. 
• During the whole debate about crypto regulation, it has been argued whether the SEC or the CFTC should be the main regulator, a discussion that implies defining the nature of digital assets as securities or commodities. The FSOC report doesn’t lean towards any of these positions, but rather suggests interagency cooperation mechanisms to allow both authorities to regulate the market together. 

Crypto lender Nexo buys a Bank Charter

• Nexo, a Swiss-based crypto lender, announced the acquisition of an undisclosed stake in Hulett Bancorp, parent company of Summit National Bank, and plans to use their national bank charter to expand their product offering in the US to checking accounts, crypto-backed loans, custody services, card services, and more. 
• The acquisition announcement comes shortly after the crypto lender was sued by 8 US States for allegedly offering interest earning accounts to its clients without complying with securities laws and regulations. The firm stated that they have been working with federal regulators. 
• This is not the first time a fintech company obtains a bank harter through M&A, SoFi and LendingClub made similar moves in the past, however it remains unusual in the industry. Although it will allow them to expand their product offering, it will also place them formally under the regulatory scope of the Comptroller, and they will have to comply with federal banking and securities regulations. 

Bessemer’s Steel DAO

• Back in March, Bessemer had announced a commitment towards investing in the Web3 industry and the creation of BessemerDAO with the intention of fostering a community of founders, investors, and operators that could trade investment ideas and opportunities in an attempt to democratize alternative investments. 
• This week, a new name chosen by members of the DAO was announced, Steel DAO, along with two initiatives: Links, a community-as-a-scout program, and Bridge, a community driven talent collective and job board. 
• The Links initiative will create a Governance Committee integrated by members of the DAO, in charge of evaluating and presenting investment opportunities to the community, which will then be voted on and open for investment from members. It’s always interesting to see creative and innovative ways in which alternative assets and investments are evolving, either by new technologies such as DAOs, or new ways to structure funds, as we saw last week with ARK’s new retail investor fund.