Bitcoin jumps back above $69,000, and DC settles Michael Saylor tax fraud lawsuit: CNBC Crypto World

today DC's attorney general says micro strategies Michael sailor agreed to a $40 million settlement over a tax lawsuit President Biden vetos a resolution overturning SEC crypto accounting guidance and Mike novag Gratz of Galaxy digital sits down with us at consensus 2024 reacting to the sudden shift in crypto politics in the US welcome to cnbc's crypto world I'm Jordan Smith cryptocurrencies are mixed coming out of the weekend with Bitcoin Rising 2 .2% by noon Eastern it's trading above $69,000 up 3% in the first 3 days of June ether on the other hand is flat for both the day and the month so far trading just below $3,800 and salana is just slightly in the red trading at $164 all right let's talk about the top stories President Biden vetoed a repeal of the sec's staff accounting bulletin or Sab 121 the controversial piece of accounting guidance tells financial institutions holding digital assets for customers to keep the assets on their own balance sheets in this statement on Friday afternoon the president announced the veto writing quote by virtue of invoking the Congressional review act this republican-led resolution would inappropriately constrain the sec's ability to set forth appropriate guard rails and address future issues this reversal of the considered Judgment of SEC staff in this way risks undercutting the sec's broader authorities regarding accounting practices Biden said his administration will not support measures that jeopardize the well-being of consumers and investors Biden also doubled down on his previous comments on one wanting to work with Congress on a comprehensive regulatory framework for digital assets The veto came on the same day banking groups sent a letter to President Biden asking him to sign the resolution to overturn Sab 121 which passed both chambers of Congress last month with the Senate voting 60 to 38 in favor of the resolution next Michael sailor agreed to a multi-million dollar settlement with the District of Columbia and what the district's Attorney General's office calls the largest income tax fraud recovery in DC history today DC AG Brian Schwab announced micro strategies executive chairman and the company he co-founded will pay $40 million to resolve the tax fraud lawsuit filed by his office that lawsuit alleged sailor had defrauded the District of more than $25 million in income taxes the AG's office says this lawsuit is the first of its kind brought under updates to the DC false claims act it details how sailor who lived in the district since at least 2005 allegedly pretended to live in lower tax jurisdictions in an effort to avoid paying taxes on hundreds of millions of dollars of income in a statement micro strategy told us that this was a person tax matter involving sailor and that the company will not be obligated to make a financial contribution to the settlement last coinbase is pouring another $25 million into digital asset superpac Fair Shake as the industry continues to grow its support of crypto-friendly political candidates in a blog post today CEO Brian Armstrong wrote that coinbase plans to continue investing as crypto rules take shape around the world because it's a key part of how the company defends its customers rights and advances economic freedom last week Ripple donated another $25 million to fairshake doubling the blockchain firm's initial contribution of $25 million last year the next day the web three Focus crypto Venture firm Andre and Horowitz also pumped another $25 million into the pack Chris Dixon a6z crypto managing partner wrote on X last Thursday that the latest contribution brings a16 Z's total donations to Fair shake and related entities to $47 million he wrote that as an industry we need to keep up the momentum and show that the US can lead in creating the next wave of blockchain innovation all right let's continue our coverage of consensus 2024 in Austin Texas for our main story last week crypto worlds Mackenzie sallo sat down with Mike novogratz founder and CEO of Galaxy digital to discuss Washington's shift and support for the crypto industry along with institutional adoption of crypto now that spot Bitcoin ETFs have been trading for nearly 5 months a lot of people feel like they've gotten Whiplash in the last few weeks the SEC having this reversal and its stance on spot e ETFs uh a lot of legislation positive Pro crypto legislation wind it way through Congress help me read the tea leaves here what's going on UHC like if this is whiplash I want more of it uh listen what happened was really simple uh on the same day Joe Biden came out and said I'm going to veto this Arcane piece of accounting legislation from the SEC that's Pro crypto Donald Trump got on stage and said there are a lot of people that love this crypto stuff I'm going to be your crypto president and Twitter went wild and the crypto Community which for years saying we need bipartisan Solutions finally said enough uh I tweeted something I thought funny that was they're more crypto owners than dog owners and what if the Democratic party were the party that hates dogs and really quickly you know Mark Cuban was on Twitter that there was a a roar of people on the left saying what are we doing and you know politicians respond they want to get reelected and so you first had this this accounting Sab 121 one vote we saw nine influential Senators cross over uh and that was a big surprise including Senator Schumer thanks Chuck uh but great you know because he's the leader of the of the of the Democratic Senate and then you have the SEC out of nowhere call up all the applicants and say oh we're going to get this ETF done I don't have inside info but I would suspect someone at the Biden White House said we got to diffuse this issue called the SEC and said change your damn yeah and we also saw a lot of Democrats change their stance with respect to fit 21 which passed the house last week more than 70 shifted over that was an awesome shift and so for me it's game over people have finally got it this should not be political the Democrats don't want to lose an election over something as stupid as a a new technology that's good for the country it had been Elizabeth Warren really with her anti- crypto Army as the as the blocker and she's got a lot of power and these last two weeks have been horrible to be Elizabeth waren because the Senate and the house broadly rebuked her and said Elizabeth enough enough you're look what you're costing us this name election shut up yeah and it does seem like voters care about it a lot more than they did in the last presidential cycle a Harris poll showing that onethird of voters care about the political St on crypto you I remember when abortion used to be the hot issue they're they're these single issue voters not all the 55 607 they 85 million crypto users where 20% are single issue voters that's 17 million single issue voters that aren't necessarily left or right to start with right you've got Libertarians that love Bitcoin but you've got progressives that should love crypto that cuts out the middleman and so it's not a inherently political technology five months into to the spot Bitcoin ETS roughly 58 billion doar in assets under management across all of those funds I my question though is more about the institutional interest so I was going through all those 13f filings looking at which banks newly had exposure to bitcoin through this spot ETF and it's not a lot you know Morgan Stanley $270 million not all the banks have uh exposure and the ones that do say that this is more a reflection of what their wealth management clients are asking for not an endorsement by the bank of the but you wouldn't expect a lot of banks to put Bitcoin or Google stock on their balance sheet headphones aren't doing aren't really jumping in as much hedge funds are mixed some hedge funds have huge positions often those are Arbitrage positions uh you're listen we're seeing movement prices are significantly higher in crypto than they were three months ago trading close to the highs and that's with interest rates giving us no love right at the beginning of the year we thought the Fed was going to cut five to six times now they haven't cut at all and don't look like they've cut and so the crypto markets are strong because we have the sentiment shift crypto is now an asset class it will be next year it will be forever and it wasn't that way two years ago there was risk around the asset class and it's been drisk and so every day some Morgan Stanley salesman is picking up a phone and trying to sell one of his high net worth clients crypto and you're just going to see a constant drip of money come into this space and prices go higher especially as long as the government keeps spending I mean you are a macro guy you mentioned the fact that you know interest rate Cuts don't seem like they are in the cards uh this year are you anticipating any sort of listen we could have a cut in September if all of a sudden grow slows and you get a little bit of inflation but we're not going to get the five six seven cuts to your point like usually you had Bitcoin track those decisions so closely and they've just like broken free of of that but same with gold same with silver the markets are telling us that we should be damn scared about what the government is doing with our deficit right we're adding a trillion dollars of debt every hundred days to our to our giant pile of $36 trillion dollar in debt if you're a Wall Street if if you're stay in Dr or ralio that's existential to this country and in an election year no one's is going to talk about it but we've got a populist left president and we had a populist right president and now he's a candidate and so like populism isn't good for fiscal you know stewardship populism spends and when you're spending like that assets like Bitcoin are going to go higher you've been talking about the herd is coming that's your your catchphrase said that a few years ago we have seen more institutions come into the space I mean you come from Goldman yourself you work with a lot of major institutional names from the trafi world what's the sentiment what are people not saying publicly but they you know they feel they are waiting for the endorsement from Congress through a a bill like fit 21 through an infrastru to a market infrastructure bill that gives them Clarity no bank that makes as much as JP Morgan or Goldman wants to put any reputation at risk on a new technology when the rules aren't clear and so if Sab 120 his wife out you'll see places like Bank of New York and State Street enter custody that'll make those places feel more comfortable but we need the full endorsement from Congress SEC and the fed and then you're going to see a stampede of those guys into our space make my business is going to be harder because the competition is going to go way up uh but it's going to bring a lot of Assets in predictions for the end of the year are we going to see this legislation actually get passed into law are we going to see a turnover in the White House are we going to see gendler out listen I think uh I think gendra is going to be gone at the end of the year one way or the other or the at the beginning of next year if Biden or Trump wins Gary has probably serve plenty of time at the SEC I think the election we're going to literally go to bed an election night not knowing who's going to win right there's six six or seven swing States they're all going to be tight right now they're all trending Trump's way but remember it's a long time in those last couple months both parties spent a bazillion dollars in those States courting those independent voters and I just really believe it's going to be one of those I can't believe we're going to bed again not knowing who's going to win um I think listen I think crypto prices are going to be higher there's a 50 40% chance we get legislation this year you're going to have to have the Senate put together it its counterparty remember like house passes bills Senate makes laws and so they take each each little piece of it a little more seriously you mush those two two things together I do think Senator Schumer will put it to a vote if they do that and and President Biden wouldn't veto it and so the path is clear and if it doesn't happen this year happen early next year all right that's all for crypto world today we'll be back again tomorrow with a conversation with Franklin templeton's Jenny Johnson and we'll see you then [Music]

Channel: CNBC Television

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Keywords: crypto world, cryptocurrency, bitcoin, digital currency, Bitwise, NYSE, New York Stock Exchange, Lynn Martin, Katherine Dowling, CNBC, business news, finance stock, stock market, news channel, news station, breaking news, us news, world news, finance news, money, money tips, financial news, stocks, crypto investing, crypto, crypto mining, bitcoin mining, crypto industry, ether, U.S. currency, cryptocurrency news, Bitcoin, blockchain, nft, etf, btc, markets, eth, ethereum, Consensus 2024

Id: iDZftvmzwrs

Length: 11min 44sec (704 seconds)

Published: Mon Jun 03 2024