ONE YEAR LATER: One year to the day after crypto trade publication CoinDesk’s bombshell report on a leaked Alameda Research balance sheet became the first domino to fall in the implosion of FTX and its founder Sam Bankman-Fried, “one-time cryptocurrency king … has met his fate with the justice system,” POLITICO’s Declan Harty writes. “Now, much of the rest of the industry is facing its own legal showdowns with the government.” — “Bankman-Fried — whose FTX empire was one of the world’s largest digital assets powerhouses, allowing him to become a major Washington lobbying force — was found guilty late Thursday on seven criminal counts of fraud and conspiracy by a federal jury in lower Manhattan. The verdict capped what prosecutors called one of the biggest financial frauds in American history, setting up the 31-year-old fallen business mogul to potentially serve decades in prison.” — “Yet, as the emerging industry now looks to finally move on from Bankman-Fried, crypto giants like Binance, Coinbase and Gemini, among others, are still heading for courtroom clashes with regulators that could prove an even greater peril to the market’s future than FTX’s collapse in late 2022 ever did.” — “The Securities and Exchange Commission has brought more than two dozen crypto-related cases since FTX collapsed, with Chair Gary Gensler calling the business ‘a field rife with fraud, scams, bankruptcies and money laundering.’ New York Attorney General Tish James has gone after major players Gemini, Digital Currency Group and Genesis Global Capital for alleged fraud.” — “And while most of the cases against the industry are civil, the Justice Department has criminally charged some crypto executives … Meanwhile, on Capitol Hill, Sen. Elizabeth Warren (D-Mass.) is leading other lawmakers in pushing legislation to crack down on what they say is the industry’s money-laundering machine.” — “Many crypto executives have cheered the authorities in their pursuit of alleged criminality in crypto, insisting that those misdeeds have little to do with the digital assets business and unfairly taint the market. But the industry has taken up a far more hostile tone toward financial regulators’ attacks, vowing to fight claims that crypto companies are skirting investor protection and market rules.” WALL STREET’S NEW TACTICS: “Banks have become increasingly frustrated with their federal regulators and, in a break with tradition, have brought the battle out into the open,” per The New York Times’ Emily Flitter. — “In an effort to overturn new rules and challenge the legitimacy of regulators’ powers, bank lobbyists have added legal threats and public attacks to the more usual lobbying efforts that once took place behind closed doors on Capitol Hill.” — “In recent months, trade groups representing banks of all sizes, including the American Bankers Association, the Independent Community Bankers of America and the Bank Policy Institute, have accused federal regulators like the Consumer Financial Protection Bureau and the Federal Reserve of regulatory overreach.” — “You almost had to have some sort of cataclysmic event before a trade association like mine would file suit in the courts,” Cam Fine, the former longtime head of the ICBA, told the Times of the shift in strategy. — “Regulators say they are using powers they have long held to address specific problems in the industry, like racial discrimination. And a crisis among midsize banks that led to the collapse of four lenders this year has added urgency to the need for stricter capital rules, they say,” but industry lobbyists “say the Biden administration has picked regulatory heads who are often unwilling to compromise or listen to their concerns.” WITH FRIENDS LIKE THESE: The U.S. Chamber of Commerce is up with a new six-figure ad campaign boosting a dozen Republican House members “who are fighting for business during this challenging time in Washington.” The organization will run newspaper ads and finance billboards praising Reps. Mike Lawler (N.Y.), Marc Molinaro (N.Y.), Anthony D’Esposito (N.Y.), Don Bacon (Neb.), John James (Mich.), Brad Finstad (Minn.), Erin Houchin (Ind.), Chuck Edwards (N.C.), Ashley Hinson (Iowa), Mariannette Miller-Meeks (Iowa), Brian Fitzpatrick (Pa.) and Jen Kiggans (Va.) in their districts. HALEY TO HIT K STREET TO RAISE DOUGH: As GOP presidential hopeful Nikki Haley shows signs of momentum in the primary, Bloomberg’s Kate Ackley reports the former U.N. ambassador will rub elbows with the influence community this month as part of a fundraising swing in D.C. — “The campaign stop, billed as a roundtable discussion and reception, is set to take place Nov. 13 and is hosted by several lobbyists from the firm BGR Group and other shops. BGR lobbyist Jennifer Larkin Lukawski, principal Robb Walton, and the firm’s CFO Todd Eardensohn are among the hosts for the event, according to an invitation.” Other co-hosts include West Front Strategies’ Ashley Davis and BGR’s Lester Munson. — Haley “is generating more interest among lobbyists and political operatives, said Ozzie Palomo, a founder of Chartwell Strategy Group who has been helping the Haley campaign with fundraising efforts. He said her performance at the presidential debates has increased focus on the candidate among donors nationwide. ‘The interest from downtown is mirroring interest across the country,’ said Palomo, who is on the host committee for the Nov. 13 event.” — Notably, as Ackley points out, despite Haley’s campaign trail calls to “ban foreign lobbying,” several of the fundraiser’s hosts, Palomo and Munson, represent foreign clients.
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