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| Washington dropped two crypto proposals holders have fought for years, and bitcoin is at $85,834, down 0.95% in a day. |
FinCEN withdrew its self-custody and mixer proposals
On Monday, FinCEN, the Treasury Department's financial crimes unit, withdrew two proposals that crypto holders have fought for years. One was a 2020 plan to put reporting rules on payments to and from wallets you hold yourself. The other was a 2023 finding that crypto mixing, which scrambles the trail between sender and receiver, is a primary money laundering concern.
The 2020 plan would have made banks and exchanges record who was on the other end of any withdrawal above $3,000 to a wallet outside a regulated firm, and report transfers above $10,000. It sat unfinished for nearly six years, across three presidencies. Coin Center, the Washington group that fought it, said the rules "would have expanded reporting into our pockets."
The withdrawal has a catch. FinCEN said it will keep watching mixers and may act again, so it has put away two documents and kept the option of writing new ones.
For anyone who holds their own coins, the change today is small. The 2020 plan was never in force, so no exchange has to stop doing anything, and the identity checks exchanges already run still apply when you buy or withdraw. What goes away is a pending rule that would have added to those duties every time you moved coins to a wallet of your own. People who often withdraw to wallets of their own were the ones the 2020 plan would have touched most.
If you use a mixer, FinCEN has told you it is still looking. If you only withdraw to your own wallet, the reporting proposed for that is gone.
We haven't read FinCEN's withdrawal notices. The account above comes from reporting on them and from Coin Center's reaction, and the 2020 thresholds are from the proposal as published then.
ECB's Lane links AI spending to higher rates
Philip Lane, who sits on the European Central Bank's executive board, said on Monday that the global AI investment boom is plausibly part of why long-term interest rates have risen worldwide. The 10-year US Treasury yield is near 5.3%, its highest since 2002.
The borrowing behind the boom is large. Nikkei counted about $1.65 trillion of AI obligations that Alphabet, Microsoft, Amazon, Meta and Oracle keep off their balance sheets, such as data center leases and chip contracts. Torsten Slok at Apollo said orders per dollar of their bonds fell from nearly five in February to under two in July. Goldman expects a record $420 billion of hyperscaler bonds next year. We haven't seen the Nikkei, Apollo or Goldman originals.
Bitcoin pays no interest, so a higher yield raises the cost of owning it. It has held near $85,800 anyway.
The CFTC asked about rules for leveraged crypto
The Commodity Futures Trading Commission published an advanced notice of proposed rulemaking on Monday, which is the earliest step in writing a rule. The agency is asking for comment before it proposes any text. It covers retail crypto trading with margin, leverage or financing, and a new registration category for the exchanges that offer it.
Chairman Michael Selig called it a federal option rather than a mandate. Spot exchanges, where you buy and sell coins outright, stay with the states. The notice would also write into rule that delivery to a customer's own wallet within 28 days counts as an exception to on-exchange trading.
If you trade with leverage, the CFTC is asking how a federal route should work. If you only buy coins, nothing in the notice changes where you buy them, and the patchwork of state rules stays.
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⚖️ The Odds
Live prices from prediction markets, where real money is staked on real outcomes.
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🔭 What to Watch
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📈 The Tape
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In Pro today Hike odds fell to 17%. The ten-year rose. On Monday 28 September, the Polymarket bet on whether the Fed raises rates by a quarter point at its 28 October meeting stood at 65%. On Monday 5 October it stood at 17%. Over the same week the ten-year Treasury yield went from 5.241% to 5.31%, a two-decade high, and the Fed's own measure of the dollar ended Friday 0.6% higher than it began. When traders expect the Fed to raise rates less, borrowing is supposed to get cheaper. At the short end it did. By Glassnode's count the two-year yield fell and the ten-year rose, so the gap between them went from about 0.2 percentage points around the Fed's rise on 16 September to 0.42 by Friday. The ten-year is the rate behind mortgages, and it's what a bitcoin holder gives up by owning coins that pay nothing. The week had its reasons for the odds to fall. On Thursday 1 October Philip Jefferson, the Fed's vice chair, said officials may need more time before deciding whether to raise rates again. On Friday the government reported 29,000 new jobs for September, far fewer than economists expected. The yield isn't a smooth line either: on Thursday it touched 5.34% and closed at 5.233%. On Monday it closed at 5.31%. The Wall Street Journal put that down to a jump in the prices-paid part of a purchasing managers' survey, and to investors wondering whether the Fed would have to raise rates hard after all. Bitcoin closed Monday at $85,839, up 2.7% on the Monday before. The Fed explains why the odds fell. Whether it explains why the yield rose is the question.
The rest of this one is for Pro readers. It picks up where this stops. |
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Treasury yields sit near two-decade highs this morning, and bitcoin is still above $85,000.
TC
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| We read what regulators publish for a living and still can’t predict what they’ll publish next, so what you do with your money stays with you. |
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