HODLpac is Back
Re-launching HODLpac's newsletter, a recap of the last few months in crypto-related policy, the case for HODLpac, and more.
HODLpac is the single issue voter DAO.
Our mission is to build legislative support in Congress for the development of the cryptoeconomy in the United States by:
Donating to champions of crypto-friendly public policy;
Donating to opponents of crypto’s antagonists in Congress (e.g. Brad Sherman);
Using the tools of our industry to organize the crypto community into a powerful grassroots political force.
The events of the last few months have made it more clear than ever that (1) crypto faces several regulatory threats in the immediate future and (2) we need to build an organization like HODLpac to help counteract them.
As a way to restart this newsletter, below is a recap of what’s happening in crypto policy, how the crypto community has responded, and what’s next for HODLpac.
Going forward, this newsletter will hit your inbox every Monday with:
Everything you need to know about crypto-related politics and policy from the previous week;
“The Crypto in Congress Update” by Ron Hammond of the Blockchain Association (keep scrolling for this week’s);
Spotlights on candidates for Congress and their positions on crypto;
A collection of the best tweets, essays, podcasts, reports, and blogs on crypto-related policy;
Updates on HODLpac’s progress, fundraising, community governance, and more.
Here’s how you can help:
Subscribe and share our newsletter with your friends and colleagues:
Join our Discord to help shape the future of HODLpac:
Donate to HODLpac, get governance tokens, and be a part of the first political DAO in history:
Deteriorating Regulatory Environment
A recap of the last few months in crypto policy:
The yet-to-be-passed infrastructure bill includes a nonsensically-written anti-crypto “pay-for” that unfairly labels software developers, DAOs, and miners as “brokers,” exposing them to onerous (and unfeasible) IRS reporting requirements and undue legal liability. In addition, the bill also includes a mostly-overlooked and likely unconstitutional tax provision that subjects cryptocurrency to draconian financial surveillance requirements.
“Crypto Industry Regroups After Senate Keeps Blurry Regulation in Infrastructure Bill,” Alex Vuocolo, Cheddar News
“Infrastructure Bill Hangs in the Balance, and So Does Crypto,” Nick Anthony, Cato Institute
“An unworkable and arguably unconstitutional tax change tucked away in the infrastructure bill,” Peter Van Valkenburgh, Coin Center
“Tax code section 6050I and digital assets,” Abe Sutherland, Proof of Stake Alliance
Regulators - such as Treasury Secretary Janet Yellen, SEC Chair Gary Gensler, and Acting Comptroller of the Currency Michael Hsu - have signaled that they are focused on clamping down on crypto in ways that would threaten the United States’ future as a home to crypto innovation.
“Gary Gensler sharpens criticism of cryptocurrency in Senate hearing,” Tory Newmyer, Washington Post
“Risks of Crypto Stablecoins Attract Attention of Yellen, Fed and SEC,” Paul Vigna, Wall Street Journal
“Cryptocurrencies, Decentralized Finance, and Key Lessons from the 2008 Financial Crisis,” Michael Hsu, Speech to the Blockchain Association
The Crypto Community’s Response
In response to crypto’s deteriorating regulatory environment in the United States, the industry has rallied together in a variety of ways:
The team behind universe.xyz released the “Lobby Lobsters” NFT collection with 100% of the proceeds going to “policy and lobbying efforts” like Coin Center
Leaders in the crypto ecosystem like Ryan Selkis of Messari and Jesse Powell of Kraken have rallied American crypto users to action in the political sphere, championing the idea of the “single issue voter”
Why We Need HODLpac
The efforts described above are amazing and showcase the power of the crypto community to rally together and fight for our common interests.
However, we need to add more tools to the crypto community’s policy advocacy toolbox. We need both:
A political fundraising operation to reward our champions in Congress, deter our opponents, and play the DC money-in-politics game. Whether we like it or not, campaign contributions open doors and are a powerful tool to build legislative support.
A grassroots membership organization (like the NRA) that will institutionalize the demonstrated energy that crypto users, builders, investors, and enthusiasts have to engage with policymakers and regulators.
HODLpac can fill both of these needs by building a crypto-native political organization (read: a DAO or as close to it as we can get).
Connor Spelliscy @c_spelliscySmart contracts may be unstoppable, but the crypto industry is not @holmesworcester and I break down how the industry can protect itself from potentially crippling regulation in this week’s @DefiantNews🛡️ See Part I of our Article + TL;DR👇 https://t.co/1l8WLDvrDt
Next week, this newsletter will feature a full description of HODLpac’s plans for the 2022 election cycle. But here is a preview:
HODLpac is building a donation app that functions like "Gitcoin for political giving.” Everyone in the crypto community will be able to donate directly to candidates they want to support, in fiat or cryptoassets, while PAC funds act as the quadratic funding matching pool amplifying grassroots donations.
HODLpac recently received funding from the DeFi Education Fund to build out "HODLscore" - a tracker on what legislators and candidates are doing and saying about crypto-related policy. This will help the crypto community know who deserves our support and why.
Individuals who participate in HODLpac by donating to the matching pool (i.e. the PAC) and to candidates through the donation app will receive governance tokens that will be used to steer the organization, shape how HODLscore works, build out other advocacy capabilities, and, in the process, create the first political DAO.
Join our Discord:
Donate to HODLpac to build the matching pool for political donations and get governance tokens:
Crypto in Congress - October 13, 2021
By Ron Hammond
Last week's House Financial Services Committee hearing with SEC Chair Gensler was by far the most crypto dominant hearing to date. The questions ranged in terms of depth and call for action, but one takeaway is that Congress is getting ready for some legislation.
Other hearing tidbits: There were around 18 Members of the Committee who asked Gensler some sort of question on crypto. Crypto was the second most discussed topic besides climate. More D's asked about crypto than R's (there are more D's on the Committee though). Most of the Financial Services Committee D's who asked crypto questions sit on the Digital Asset Working Group (a group of Committee D's who are tasked to craft legislation and policy on crypto). For many Democrat Members, this was the first time they asked about crypto.
Some observations on the D's asking about crypto: crypto-skeptical Members tend to be older and more senior, the younger members were genuinely curious and had pointed questions for the SEC Chair, and no one was critical of Gensler's approach (it is rare to attack your own party)
Some notable questions: Rep. Auchincloss (D-MA) asked if would it be most helpful for Congress to create and delineate a new class of security that has a separate regulatory apparatus or would it be most useful for Congress to divide explicitly crypto assets between SEC and CFTC. Rep. Garcia (D-TX) and Rep. Ritchie (D-NY) focused on stablecoins and their relation to consumer protection, securities laws as well as whether they are actually systemically risky or not given their smaller, but growing market cap size at the moment.
Keep an eye on these Members as well as more senior Committee D's as they begin to work on potential crypto legislation. The D's majority in the House may come to an end in 2022 so there is mounting pressure to tackle these issues (and others) now while they have the majority.
📚 Good Reads
“Why Progressives Should Love Bitcoin: An Open Letter to Senator Elizabeth Warren,” Samantha Messing, Samantha Messing Medium
“Congressional Bitcoin Believers,” Jameson Lopp, BTC Times
“Crypto Isn’t the Cause of Ransomware. It Might Be the Cure,” Ari Redbord, CoinDesk
“SEC commissioner: Investors have the right to make their own decisions without regulators standing in the way,” Hester Peirce, CNN Business
“Senator Ted Cruz Says Texas Should Use Wasted Natural Gas to Mine BTC,” Jinia Shawdagor, CryptoTelegram
“Stablecoin Rules Must Come From Congress, Senator Tells Yellen,” Jesse Hamilton, Bloomberg
“How the Greatest Decentralizing Force for Crypto Projects Is the SEC with Collins Belton and Greg Xethalis,” Laura Shin, Unchained Podcast
“Hidden Danger in the Infrastructure Bill with Abraham Sutherland & Greg Xethalis,” Peter McCormack, What Bitcoin Did Podcast
Disclaimer: HODLpac is FEC-registered hybrid political action committee and is not legally affiliated with any party, party committee, candidate or candidate committee.