Hi!

Welcome to Web3 Bits, where I share a few of the most interesting web3 bits for you to consumer over the weekend.

It's been an incredible two weeks on the regulatory front in crypto, with politics and regulation taking center stage. As token designers, builders and investors in the space, it's imperative we understand the implications and follow them closely.

Here's a run down of the most interesting and relevant items:

Interesting things

• Crypto becomes a Red vs Blue topic: With the US house of representatives back in session, the GOP is taking control of the narrative and trying to push forward a pro crypto stance. The Democrats have faced off with Elizabeth Warren's anti crypto army Through the ~10+ hours from 3 different hearings I've watched the lines are clear: Democrats are anti crypto, Republicans are pro. The one stand out to break party lines, was Rep. Richie Torres (Democrat) from NYC who supported the NYDFS and their existing regulatory approach for crypto.
• The SEC has come out swinging with two large moves: a lawsuit against Bittrex, a trading platform, and served Coinbase with a Wells notice of impending litigation. It seems clear from these two moves that the SEC under Gary Gensler, deems every token (besides Bitcoin) as a security. To be honest, close watchers of Chair Gensler's course at MIT would not be surprised by this (it's a good course and I recommend it).
• Coinbase strikes back: Coinbase responded to the Wells notice and more importantly sued the SEC - demanding a response to their inquiries regarding token listing.
• Speaking of Chairman Gensler, he got absolutely grilled in a 4 hour hearing by the House Financial Oversight Committee. It's worth watching if you want to see how regulation works (and doesn't).
• A hearing on stablecoins by the same committee is also worth watching. As is this hearing from yesterday on the gaps in regulation regarding digital assets.
• The rest of the world is not watching passively. In the EU they've just passed the MiCA bill, a first of its kind regulatory framework for digital assets. While strict, especially on KYC/AML, it finally provides a framework of sorts to work with. South Korea, a major crypto hub is passing regulation, as is the UK and Hong Kong.
• Paradigm, a VC fund, also filed an amicus brief in the SEC vs Do Kwon suit, pushing back against the SECs approach to regulation via litigation - and mainly suing dead projects that have already harmed investors simply to set legal precedent.

In short - there's a lot happening on the regulatory front. I've spent the past two weeks reading suits, watching testimonies and following politicians. It saddens me that this has become a partisan issue in the US. On the other hand, it's clear that crypto is here to stay and that there's enough real activity going on that other locations around the world are competing for the talent and capital it brings with it.