Jake Chervinsky Profile picture
Lawyer, but not yours. Head of Policy @blockchainassn. Advisor @variantfund. Board @fund_defi. Tweets are my own + not legal or financial advice. ❤️🇺🇦
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May 13 23 tweets 6 min read
1/ On algorithmic stablecoins & the UST collapse:

There’s no sugarcoating it, this is among the most painful weeks in crypto history & one we'll reckon with for a long time to come.

Some thoughts for policymakers as they consider the path forward for stablecoin regulation 🧵 2/ First, a quick summary of what happened:

TerraUSD (UST) was a stablecoin on the Terra blockchain. It aimed to hold a peg to the US dollar, a stable value of $1 per UST.

Unlike most stablecoins, UST was purely algorithmic, meaning it didn't use any collateral to hold its peg.
Apr 18 12 tweets 7 min read
Comments on the SEC's proposed rule expanding the definition of "exchange" to (maybe) capture DeFi are due today.

As usual, the crypto industry is showing up in a big way. Read @BlockchainAssn's comment here: theblockchainassociation.org/wp-content/upl…

Some other great comments I've seen so far 👇 The DeFi Education Fund (@fund_defi):

"We are concerned that this vagueness could be seriously detrimental to the digital asset ecosystem in the United States.... The SEC has not justified, and cannot justify, such a sweeping change."
Mar 1 21 tweets 5 min read
1/ Russia can't & won't use crypto to evade sanctions.

Concerns about crypto's use for sanctions evasion are totally unfounded. They fundamentally misunderstand:

- how sanctions work
- how crypto markets work
- how Putin is actually trying to mitigate sanctions

I'll explain 🧵 2/ To begin, I want to express my strong & unequivocal support for the people of Ukraine fighting a totalitarian invader to defend their homes & their basic rights to liberty & self-sovereignty. Glory to Ukraine 🇺🇦

The free world must assist Ukraine & fight back against Putin.
Feb 16 14 tweets 4 min read
1/ There's a ton of action in Congress on stablecoin regulation right now & @RepJoshG just proposed a draft bill with the best language we've seen yet.

If Congress does anything on crypto this year, it may look like this. An update on stablecoins in DC 🧵
gottheimer.house.gov/news/documents… 2/ Congress is working on a bunch of crypto-related policy issues now, but stablecoins are top priority.

That's largely due to the stablecoin report issued by the President's Working Group on Financial Markets (PWG) in November. Read more on that here:
Jan 9 10 tweets 2 min read
1/ A small silver lining of a crypto bear market is that it may relieve some regulatory pressure.

For good reason, regulators with limited resources focus attention on issues with widespread impact & systemic importance.

To a degree, shrinking markets = lower risk = less focus. 2/ Regulators looking at the crypto market over the last 12-18 months see a high-risk speculative mania inflated by unrealistic or even false promises.

They assume it will end badly for most participants just like it did after the 2017 ICO bubble & they want to limit the damage.
Jan 8 4 tweets 1 min read
I'm a person who uses Twitter.

My feed is packed with threads by self-declared thought leaders sharing 10 tips for this & 20 lessons about that.

Here's 30 ways to get the most value from them 🧵 1/ The next time you see one, scroll past it.
Nov 25, 2021 12 tweets 3 min read
It's another holiday season in a crypto bull market.

You know what that means: questions from family members who are curious about crypto, or skeptical, or downright hostile.

Are you expecting questions like these? Here are 10 tips I've learned for answering them effectively 🧵 1: Skip the hard sell.

Nothing turns people off faster than an aggressive pitch, especially when they're trying to relax over the holidays.

If your family wants to talk about crypto, great. If not, great. Don't force it. You'll only make them more closed-minded if you're pushy.
Nov 18, 2021 21 tweets 9 min read
1/ 🚨 A full update on the infrastructure bill:

President Biden signed the bill into law on Monday. The crypto tax provisions are officially set to take effect on January 1, 2024 (for FY2023 reporting).

Several members of Congress have already proposed new bills to fix this 👇 2/ As a reminder, the infrastructure bill imposed tax reporting requirements on an unknown but possibly massive number of actors in crypto, even where compliance is impossible.

This could include miners, validators, software developers, wallet providers, NFT creators, & more.
Nov 18, 2021 5 tweets 3 min read
I really can't wait to explain @ConstitutionDAO to folks here in DC.

This is Web3 at its best: thousands of passionate people coming together to fund the preservation of a historic document & make it available to the American public after decades in private hands. Truly amazing. The Constitution isn't just a set of laws or a historic artifact. It's a symbol of the freedom & opportunity at the heart of our democratic experiment.

Before Web3, who would've imagined that anyone, regardless of background, could participate in the American dream in this way?
Nov 9, 2021 11 tweets 4 min read
1/ I'm excited to announce my new role as Head of Policy for @BlockchainAssn, the crypto industry's premier trade group in DC.

My sole focus will be crafting & advancing good crypto policy in the USA & abroad. This is our main challenge now. I'm all in.

Why BA & what's next 👇 2/ Crypto took the world by storm in 2021.

Bitcoin is legal tender. DeFi is a nine-figure sector. NFTs are on every magazine cover. Web3 has tech giants struggling to keep up.

At this point, it's impossible to deny crypto's geopolitical, macroeconomic, & cultural significance.
Nov 4, 2021 7 tweets 2 min read
Here's the truth: we've dodged most of the regulatory fire so far, but things will likely get worse before they get better.

To the extent I seem overly optimistic, that's a strategic choice. It's the best way to be effective, & when I *do* need to sound the alarm, you'll listen. But when I say "we will prevail," as I often do in the course of explaining some enforcement action or proposed legislation or whatever, I mean it.

It won't be easy, there'll be hard days, & I don't know exactly what path we'll take to get through. But we will.

It's inevitable.
Nov 4, 2021 6 tweets 2 min read
1/ The infrastructure bill is heading for a vote in the House.

Yes, the crypto provisions are just as bad as they were months ago. Yes, the impact of Section 6050I has been underexplored.

No, you don't need to call your reps. The political reality is: it's out of our hands now. 2/ Importantly, nothing will happen right away.

The crypto provisions don't go into effect until 2024 (for FY2023 reporting). We can try to get them repealed or amended before then.

They also need rulemaking from Treasury to define their scope. We'll be active in that process.
Nov 1, 2021 4 tweets 1 min read
We'll have plenty of time to pick apart the new stablecoin report.

For now, the highlight in my mind is the recommendation that "Congress act promptly to enact legislation...."

Prompt action from this Congress on *anything* is unlikely, let alone on something like stablecoins. In the meantime, the report seems to acknowledge that federal agencies lack the authority necessary to implement its many & varied recommendations.

The report tells FSOC to "consider steps available to it" -- "in the absence of Congressional action, which is urgently needed...."
Oct 30, 2021 4 tweets 1 min read
If you think the metaverse comes packaged in a set of VR goggles or branded with a Web2 corporate logo, you don't understand the metaverse. I suspect the reason most people don't understand the metaverse, including all the trad tech journos who've spilled tons of ink on it this week, is because they haven't experienced it yet.

"Unfortunately no one can be told what the metaverse is. You have to see it for yourself."
Oct 28, 2021 7 tweets 4 min read
FATF published its updated crypto AML guidance today. It's marginally better than the March draft.

As often happens, industry explained why the draft made no sense, & FATF's reaction was just to make it more vague. No answers here. The saga continues.

🧵 of threads & writeups: From @coincenter's @valkenburgh, explaining the good, bad, & ugly of the updated guidance & why it's "far too vague and verbose to actually create reasonably clear and narrow limits for surveillance obligations."
Oct 1, 2021 6 tweets 2 min read
1/ Some personal news: after 2.5 amazing years, yesterday was my last day at @compoundfinance ❤️

It's been a genuine honor helping @rleshner, @justHGH, & the Compound Labs team build the future of finance 🤖

I'm taking October off, then starting a new challenge (stay tuned) 🧵 2/ I joined Compound in May 2019 in the depths of crypto winter. BTC was around $6k & ETH was around $200.

The Compound v2 protocol was one month old. TVL was about $10m. Only a handful of DeFi projects existed & they weren't even called DeFi yet.

What an incredible journey 🤯
Sep 29, 2021 6 tweets 2 min read
1/ I'm very excited to be working with @graadient & the Grwth Lbs team as a strategic advisor as they build out & decentralize @groprotocol 🎉

Gro is a next-gen yield protocol that fills a huge gap in DeFi market structure: autonomous risk management 👇
thedefiant.io/gro-protocol-l… 2/ Gro uses risk tranching to create two stablecoin pools, PWRD & Vault, with different risk & reward profiles.

By design, PWRD offers lower yield while Vault offers higher yield at a cost: Vault bears the risk of loss for the whole protocol. In other words, Vault protects PWRD.
Aug 8, 2021 6 tweets 2 min read
1/ A few thoughts on my Senator @MarkWarner:

Although I've had some strong words for him this week, I don't think he's against crypto on principle.

I think he was just trying to help move the infrastructure bill forward & didn't know this issue was so important & controversial. 2/ I've always thought he would eventually come around to supporting crypto, & even now, I'm still as hopeful about that as ever.

As senators go, he understands technology far better than most: he himself was a successful entrepreneur & tech investor before taking public office.
Aug 6, 2021 21 tweets 7 min read
1/ A quick explainer on what happened with the infrastructure bill last night:

We were on track to pass the Wyden-Lummis-Toomey amendment to fix the worst issues with the bill, & then Senators @RobPortman & @MarkWarner came from nowhere to blow it up.

Now the vote's tomorrow 👇 2/ As a refresher, the current infra bill draft has a provision expanding the Tax Code definition of "broker" to include:

"any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person."
Jul 30, 2021 21 tweets 5 min read
1/ 🚨 Here's the deal with the US infrastructure bill:

A new provision has been added that expands the Tax Code's definition of "broker" to capture nearly everyone in crypto, including non-custodial actors like miners, forcing them all to KYC users.

This is not a drill 👇 2/ The bill expands the definition of a "broker" to include "any person who (for consideration) is responsible for and regularly provides any service effectuating transfers of digital assets."

Earlier drafts said "even if non-custodial" & explicitly included DEX & P2P markets.
May 27, 2021 5 tweets 3 min read
1/ I'm thrilled to announce that I'm joining the @variantfund team as a strategic advisor!

@jessewldn & @spencernoon are two of the most insightful, hardworking, & effective investors in crypto. I'm beyond excited to help them & their founders build out the Ownership Economy. 🔥 2/ I've been a huge fan of Jesse's work for a long time, especially since he wrote the definitive playbook on "progressive decentralization" in January 2020.

This piece has become a cornerstone of protocol development strategy across the entire industry:
a16z.com/2020/01/09/pro…