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Kristin Smith: How Crypto Can Win Over Washington, DC

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Our industry seeks to revolutionize many of the most important and regulated functions of our society. Due to that ambition, no other industry of comparable size and age has so quickly captured the focus of policymakers and regulators.

This attention creates unique challenges and opportunities. Policies enacted in the coming years related to securities laws, anti-money laundering and know-your-customer requirements, market integrity and taxes could smother our nascent industry, or they could lay the foundation for a flourishing and vibrant cryptocurrency and blockchain economy. 

Kristin Smith is the executive director of the Blockchain Association, which celebrates its two- year anniversary this week.

For example, the Financial Action Task Force, an international financial surveillance standards-setting body, has signaled that some of its members may be seeking to restrict peer-to-peer cryptocurrency transactions and the use of un-hosted wallets. Eliminating or restricting individuals’ ability to transact directly with one another would undermine the fundamental innovation of cryptocurrencies and turn them, in essence, into yet another speculative asset class. 

On the other hand, legislation in the U.S. Congress such as the bipartisan Virtual Currency Tax Fairness Act, which would exempt from an individual’s taxable income any gain resulting from a personal transaction using virtual currencies so long as the gain is less than $200, would remove a significant barrier to the wider adoption of cryptocurrencies.

Our team at The Blockchain Association works to ensure that lawmakers and regulators see the industry for what it truly is: the future. And since we founded two years ago, there have been a number of positive regulatory developments for our industry.

They include the bipartisan Token Taxonomy Act, which would exempt certain digital tokens from U.S. securities laws; Securities and Exchange Commissioner Hester Peirce’s Safe Harbor proposal would exclude certain tokens from the definition of a security under U.S. law for three years; and the Office of the Comptroller of the Currency’s (OCC) recent interpretive letter, which opens the way for national banks to provide custody services for cryptographic assets and eliminates ambiguity inhibiting broader institutional adoption of cryptocurrencies and blockchain-based services.

However, these bright spots should not obscure the seriousness of several big challenges looming on the horizon. How do we secure the progress already made and combat threats to the potential of the industry? 

The public policies that we need for crypto to thrive cannot not be achieved if our industry is unwilling to unite and work with the government.

Some in the crypto world, based on a general aversion to anything centralized, view engagement with regulatory agencies and members of Congress as anathema to the spirit of permissionless networks. This approach is a losing one. The public policies that we need for crypto to thrive cannot not be achieved if our industry is unwilling to unite and work with the government. If men were angels, government regulation would be unnecessary. 

More established industries have long recognized that working together in Washington, even with their most vicious competitors, is an essential component of their success. Do Coke and Pepsi like collaborating in D.C.? They do work together, and not because the sugar has gone to their heads, but because they are more likely to get what they want from the government by combining their powers. Other industries, like Big Tech, have learned the hard way that robust engagement with national regulators is necessary to maintain and grow their market positions. 

For crypto to reach its true potential, we likewise must win looming policy debates in Washington by expanding our base of support and being better prepared for an ever-changing political environment. To put it bluntly, there are many who see anything to do with cryptocurrency as a scam, a tool for terrorists, or most mildly: an unsound investment. This sentiment is embodied by Rep. Brad Sherman’s diatribes against crypto. In 2019, he called for an outright ban of cryptocurrencies, noting: “It is the announced purpose of the supporters of cryptocurrencies to take th[e] power [of the U.S. dollar] away from [the United States].

On the other side of the debate, the U.S. crypto and blockchain industry does have a growing stable of champions. Reps. Tom Emmer, Darren Soto, Warren Davidson, and David Schweikert are only a few of many elected congressional representatives who have recognized the potential of cryptocurrencies to transform our financial system for the better. Regulators including Brian Brooks at the OCC and the SEC’s Peirce don’t need to be convinced that crypto has a role to play in our economy.

See also: Hester Peirce – Tell Me How to Improve My Safe Harbor Proposal

To maintain and grow that base of support, the responsible and compliant leaders of our (relatively tiny) industry must set aside old rivalries and speak with one united, forceful voice. There are some that point to crypto’s decentralized design as a reason to think it is essentially impervious to regulation. This is not true, and plays directly into the perspective of congressional members like Sherman. By working together and cultivating more champions, crypto can win over Washington.

The next few years will be pivotal. This is not the time to narrow our view to issues that matter only within our wonderful, rowdy bubble of an industry. Nor is it the time to go at it alone and put rivalry over policy objectives. Members of Congress and key regulators have a lot on their plates. The only way to get their sustained, engaged attention is to speak with a voice loud enough that they can’t ignore what’s being said. 

Let’s learn from the success of other industries in shaping positive policy outcomes and not be left sitting quietly on the sidelines in the fight for the future of our industry. 





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General Motors (GM) Posts Strong Q2 2021 Earnings Report; Misses Wall Street Expectations

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Despite a strong profit and raising its guidance for the year, General Motors announced second-quarter earnings, which did not meet Wall Street’s estimates.

General Motors (NYSE: GM) posted second-quarter (Q2) earnings of $34.2 billion in revenue and $1.97 in adjusted EPS, which missed Wall Street expectations. In comparison, Wall Street projected that General Motors would hit a $30.9 billion revenue, and a $2.23 adjusted EPS. 

The discrepancies in figures were due to several challenges the automakers have been weathering since last year. They include a $1.3 billion warranty recall deficit, including $800 million from the Chevrolet Bolt EV. Also, its electric vehicles have been recalled twice in the past year due to fire risks.

In addition, GM, just like other automobile companies worldwide, has been grappling with a shortage of semiconductor chips. This led to factory shutdowns and cost the automobile industry billions of dollars in 2021. Only on Tuesday, GM announced plans to shut down its three North American full-size pickup truck assembly plants next week. As a result, the reduced number of available vehicle units produced now cost higher, leading to bigger profits.

General Motors Forecasts

GM Financial forecasted earnings for the year to initially range between $10 billion and $11 billion. The company also forecasted $4.50 to $5.25 per share in adjusted pretax profits. In addition, there was also an adjusted automotive free cash flow of between $1 billion and $2 billion. These forecasts factored in the potential impact of the chip shortage currently plaguing the industry. Consequently, the company projected a drawdown of between $1.5 billion and $2 billion in earnings. 

Despite this, General Motors’ shares rose. Although at the time of this writing, GM’s shares saw a 3% dip during premarket trading to $56.35 a share, the carmakers on Wednesday, raised its full-year guidance to between $11.5 billion and $13.5 billion. This roughly translates to earnings of $5.40 to $6.40 a share, which is a significant increase from $4.50 to $5.25 YoY. Furthermore, the overall compounded value now sits at $11 billion from $10 billion. In the face of strong demand, the car company anticipates its first-half EBIT-adjusted to range between $8.5 billion and $9.5 billion. This represents a rise from an earlier year forecast of $5.5 billion.

GM Earnings in 2020

Last year, General Motors reported a $536 million adjusted pretax loss in the Q2 of 2020. Its revenue was $16.8 billion, and it had a Financial EBT-adjustment of $0.2 billion. A net income loss of $758 million was also reported, and the automakers had to shut down several production plants. This wasn’t surprising and was a similar fate shared by many other companies in the industry in the face of the pandemic.

As a follow-through to its recent quarterly report, company GM CFO Paul Jacobson intends to hold a conference call for investors and analysts to discuss recent developments as well as the company’s growth blueprint.

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Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.



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Elon Musk, Tim Cook Deny Meeting to Discuss Tesla Acquisition

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Besides Musk, Cook has also owned up to not having met with Musk on no occasion when he appeared on the New York Times Sway Podcast.

Elon Musk, Tim Cook Deny Meeting to Discuss Tesla Acquisition

The claims published in Tim Higgins new book ‘Power Play: Tesla, Elon Musk and the Bet of the Century,’ that the Tesla Inc (NASDAQ: TSLA) CEO and Tim Cook, the Chief Executive Officer of Apple Inc (NASDAQ: AAPL) had a meeting to discuss the possible acquisition of the electric automaker has been refuted by both parties.

According to Insideevs, the conversation in which Tim Cook said ‘f*** you’ to Musk via a phone call has been adjudged as false. According to the book from Higgins, a New York Times reporter, the Apple boss called Musk to discuss a possible acquisition deal as far back as 2016. Higgins claims that both CEOs’ discussions fell apart when Musk demanded to continue being the CEO of Apple following the acquisition. The proposition was not well received by Cook who said ‘f*** you’ and hung up the phone.

While there has been a consideration to give up Tesla to Apple as Musk agreed to, that was when the former’s valuation is just about 6% of what it is today. Moreover, Musk said despite requesting to meet with Cook for the takeover consideration, the meeting never actually happened.

“Cook & I have never spoken or written to each other ever. There was a point where I requested to meet with Cook to talk about Apple buying Tesla. There were no conditions of acquisition proposed whatsoever. He refused to meet. Tesla was worth about 6% of today’s value,” Musk revealed via his official Twitter account.

Besides Musk, Cook has also owned up to not having met with Musk on no occasion when he appeared on the New York Times Sway Podcast according to an earlier Bloomberg report.

Elon Musk Says He Had No Interest Running Apple and Tim Cook

As the most valuable automaker in the world by market capitalization, there appear to be no signs that Tesla is up for sale as Musk once intended close a decade ago. Moreso, Elon Musk has said via his Twitter account that he never at any time expressed interest in taking over Apple. Per his words:

“Indeed. Both Cook & I have been clear publicly that we have never spoken or otherwise communicated. I tried to speak to him & he declined. Nor have I ever expressed any interest in running Apple to anyone. Cook is, all things considered, obviously doing an incredible job.”

The doubled-checked claim from both Cook and Musk leaves Higgins’s assertions to be questionable. Despite the book being reviewed by the Los Angeles Times, Musk duly noted that the author has “managed to make his book both false *and* boring.”

 

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Benjamin Godfrey

Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.



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Li Auto Set for Secondary Listing in Hong Kong to Raise $1.93 Billion

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Chinese carmaker Li Auto set to offer secondary listing in Hong Kong as a hedge against geopolitical risks between America and China.

Automobile manufacturer Li Auto (NASDAQ: LI), is going ahead with a secondary listing on the Hong Kong Stock Exchange (HKEX) despite regulatory crackdowns in the country. The Chinese electric vehicle startup, which is already listed on the NASDAQ, is looking to raise $1.93 billion. It plans to do this by offering 100 million Class A ordinary shares to investors at 150 Hong Kong dollars or $19.29. Li Auto plans to funnel the proceeds from its share offering into research and development of technology and future models. The automobile company is also looking to scale production and increase retail activities around its products. 

Li Auto will announce a final price on August 6th amid the crackdown on Chinese listings. The recent regulatory actions have sparked a huge recent sell-off in Chinese technology stocks. The sell-off has affected everything from food delivery to ride-hailing.

The Chinese government looks to tighten its grip over Chinese technology companies in a bid to avoid a tech-led bubble bursting. This comes on the back of the US SEC imposing stricter listing requirements for Chinese-based companies in America. Amid the excitement and uncertainty of the crackdown, Chinese electric vehicle makers are also looking to capitalize.

Li Auto Is One of Many Chinese Tech Companies with Secondary Listings in Hong Kong

Several Chinese companies already listed on Wall Street have secondary listings in Hong Kong to hedge against Chinese-American tensions. In July, Xpeng (NYSE: XPEV) generated $1.8 billion in a Hong Kong listing. The Li Auto rival issued 85 million Class A ordinary shares and is also already listed in the US. Other Wall Street Chinese technology companies with secondary listings back home are Alibaba, NetEase, and JD.com. 

Owing to the increasing growth of Chinese electric vehicles, the competition has become very intense in recent times, especially among startups. Li Auto, Xpeng, and Nio are all jockeying for dominance in the playing field. In addition to this, all three companies are also directly competing with established companies such as Tesla and BYD. Even the more traditional automakers are always looking to take a sizable market share in the automobile industry. As far as the electrical startups go, Xpeng has already proven to be a force in coming years and is already being dubbed ‘The Chinese Tesla Rival’.

In July 2021, Li Auto recorded a record number of monthly vehicle sales. The company said it delivered 8,589 of its Li One vehicles, the only model in its current model lineup. The Li One is a hybrid vehicle with a fuel tank for charging the battery, giving the car an increased mile range.

Li Auto sold the highest number of vehicles among the trio of Chinese electric vehicle startups listed in the US. Xpeng delivered 8,040 vehicles which was also a company record. In comparison, Nico sold 7,931 cars in the same period.

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Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.



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