Tag Archives: Stephen T. Gannon

What Could a “Strategic Bitcoin Reserve” Mean in Practice?

by Stephen T. Gannon and Daniel M. Payne

Photos of the authors

Stephen T. Gannon and Daniel M. Payne (photos courtesy of authors)

The United States is no stranger to stockpiling strategic assets to serve important national interests. The U.S. strategic gold reserve provides financial stability and supports the value of the U.S. dollar. The U.S. strategic petroleum reserve, in contrast, protects the U.S. from emergencies and economic shocks in the oil industry, on which much of the modern economy depends. Now, the U.S. is strongly considering a new strategic reserve: the Strategic Bitcoin Reserve (“SBR”), in which billions of dollars’ worth of the digital currency Bitcoin would be securely stored as a new financial hedge and support for the U.S. dollar.

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“Operation Chokepoint 2.0”: De-Banking Policies and the Adverse Use of Reputational Risk in Bank Supervision

by Stephen T. Gannon, Max Bonici, Elizabeth Lan Davis, and Kristal Rovira

Photos of the authors

Left to Right: Stephen T. Gannon, Max Bonici, Elizabeth Lan Davis, and Kristal Rovira (photos courtesy of Davis Wright Tremaine LLP)

How subjective supervisory standards suppressed innovation and damaged innovators.

“The power to regulate—in addition to the power to tax—is the power to destroy.”

Peter Wallison, Judicial Fortitude (2018)

As we have previously noted, we expect that the second Trump Administration will be significantly more favorable to crypto than the Biden Administration, especially with the recent appointment of David Sacks as the Administration’s “Crypto Czar.” We anticipate that in short order the new Administration will address “de-banking,” a regulatory practice that has vexed the digital asset industry—and banking in general—over the last several years. In this context, “de-banking” means canceling banking services to crypto entities and individuals associated with them or crypto activities. It is a practice that has been sharply criticized and has become even less comprehensible as the digital asset industry has matured and embraced (indeed, has sought) reasonable regulation. In the last several days the attention paid to this issue has increased sharply as a result of comments by Marc Andreessen on the Joe Rogan podcast.

Regrettably, the de-banking problem is not new. De-banking crypto is simply the latest variation of regulators using vague and amorphous standards to supervise bank conduct through the subjective lens of what the federal banking agencies call “reputational risk.”

Below we discuss how we got here and some ways forward.

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Crypto 2023: The Storm Breaks

by Stephen T. Gannon and Madison J. Breshears

Photos of the authors

From left to right: Stephen T. Gannon and Madison J. Breshears (photos courtesy of Davis Wright Tremaine LLP)

The first quarter of 2023 may go down in history as one the most intensive periods of enforcement activity and related oversight in the history of the SEC and the bank regulatory agencies.[1] While digital assets have never been free of regulatory scrutiny, this most recent escalation could have an existential impact on an industry which has been subject to repeated disruptions since mid-2022.[2] The market has made quick work of separating the wheat from the chaff, sparing not even key, widely-respected players­. Such conditions, coupled with increasingly aggressive regulatory action, could result in an increase in the number of firms who choose to seek shelter off-shore, or protection through acquisition by larger, traditional incumbent financial institutions. What follows is a brief summary of this recent regulatory activity, but there is surely more to come. This article will also reflect on the causes and consequences of this regulatory initiative, and what lessons might be learned.

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