MCCARTHY OUT — For the first time in history, the House has deposed its speaker. Democrats joined with Rep. Matt Gaetz (R-Fla.) and his small group of conservative allies to vote to strip Kevin McCarthy of his gavel today. It’s unclear who would succeed McCarthy long term, though his allies expect he will try to run for speaker again and members pledged to continue supporting him. Gaetz joined with seven other Republicans to vote against McCarthy: Reps. Eli Crane (Ariz.), Ken Buck (Colo.), Andy Biggs (Ariz.), Matt Rosendale (Mont.), Bob Good (Va.), Nancy Mace (S.C.) and Tim Burchett (Tenn.). The House clerk announced Rep. Patrick McHenry (R-N.C.) would act as a temporary speaker immediately after the vote concluded.
TOXIC CLEANUP — Sam Bankman-Fried once dominated Washington. The scruffy founder behind fallen cryptocurrency exchange FTX pressed lawmakers for friendly regulations, commanded meetings with high-ranking regulators and gave millions to Democrats across the country — all while slyly running one of the biggest financial frauds in American history, as prosecutors have alleged.
Now, as the one-time crypto kingmaker’s criminal trial kicks off today in lower Manhattan, the crypto lobby is taking up a different playbook in the nation’s capital. The goal: Divorce the market from Bankman-Fried.
“Sam’s spectacular and ongoing implosion has created space for groups that have a broader perspective,” said Sheila Warren, who leads the Crypto Council for Innovation, an industry trade group that counts Andreessen Horowitz, Coinbase and OpenSea as members. “Sam was really looking out for Sam — not even necessarily FTX.”
Bankman-Fried, who is facing a slate of criminal fraud and conspiracy charges, quickly became a force in the endless policy debates around how the U.S. should regulate crypto, as FTX emerged in recent years as a powerhouse in the market. But when FTX crumbled as a house of cards late last year, so too did just about everything else with Bankman-Fried’s fingerprints on it.
Crypto has been scrambling to escape Bankman-Fried’s shadow ever since. Executives and lobbyists have primarily done so by pointing out that the 31-year-old’s alleged misdeeds were fraud — plain and simple. But the SBF-sized hole that has emerged within Washington’s crypto operation is a vacancy that few want to fill themselves — or even be seen as filling. Bankman-Fried’s name is still toxic to many across Washington. Becoming his successor as the face of crypto is a prospect that few idealize, especially as they continue to advocate for new rules around the $1 trillion market in the face of a crackdown from Wall Street regulators like the Securities and Exchange Commission.
Instead, the crypto lobby is pushing to make digital assets regulation a grassroots issue that hits entrepreneurs, developers and companies across the country. Crypto exchange giant Coinbase, for instance, recently launched a nonprofit advocacy organization called the Stand with Crypto Alliance that is pushing to advance crypto legislation on Capitol Hill. A lynchpin of the group’s pitch? The size of the U.S. crypto market: the company touts around 52 million people.
“The idea that one man and one company dictated an entire industry was frustrating for a lot of people,” Kara Calvert, head of U.S. policy at Coinbase, told Nightly. “At the end of the day, the industry is so broad based. Nobody wants to let the whole future of technological development in the United States be dictated by a criminal.”
Lawmakers have shown signs of warming to the need for crypto legislation, with the House expected to vote on a pair of historic crypto bills this fall. The bills, passed out of committee with bipartisan support, would set up how Wall Street regulators should police the market and the federal oversight of certain crypto tokens.
And yet, crypto still has a ways to go in Washington. Regulators have not eased up on their policing of the market. Senate Democrats appear unlikely to sign onto the bills. And investor advocates and crypto skeptics have questioned basic facts about the market, such as the actual size of it in the U.S..
Ultimately, whether the grassroots movement becomes big enough to lead the industry’s efforts in Washington remains to be seen. For now, though, lobbyists simply hope the industry can soon start to eclipse lingering concerns about Bankman-Fried.
“Over time, the attitude will start to shift, but we’ve still got some work to do,” Blockchain Association CEO Kristin Smith said. “The pieces are coming together, it’s just going to take time to see the results of the investment that the crypto industry is putting into Washington.”
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— Judge in fraud trial imposes gag order after Trump attacks judge’s aide: The judge overseeing Donald Trump’s civil fraud trial issued a gag order today barring Trump from making comments about court staff after the former president posted a social media attack on the judge’s principal law clerk that included her photo. “This morning one of the defendants posted to his social media account a disparaging, untrue and personally identifying post about a member of my staff,” said Justice Arthur Engoron, addressing Trump as he sat in the courtroom, about 15 feet from the clerk, Allison Greenfield. “Personal attacks on members of my court staff are unacceptable, inappropriate and I will not tolerate them in any circumstances,” Engoron continued.
— Justices voice doubts about challenge to consumer protection agency funding: The Consumer Financial Protection Bureau appears likely to escape a potentially devastating blow from the Supreme Court after several conservative justices expressed doubts about arguments that the agency’s funding stream is unconstitutional. During oral arguments today, all the court’s liberal justices and at least three members of the conservative majority sounded skeptical about claims by financial services companies that Congress’s decision to insulate the CFPB from the annual budget process ran afoul of the Constitution’s clause about appropriations of federal money.
— Biden calls allies amid concerns over support for Ukraine: President Joe Biden convened a call with world leaders today, the White House said, in an effort to reassure allies about U.S. support for Ukraine after Congress passed a short-term government funding bill that did not include aid for the country during its war with Russia. The call comes amid concern from the Pentagon about dwindling resources available to send to Ukraine as the country looks to drive Russian forces out of its territory. The Defense Department still has $5.4 billion worth of weapons available to send to Ukraine, but is fast running out of money to replenish its own stockpiles.
RULEMONGERS — The Republican National Committee told former New Jersey Gov. Chris Christie and entrepreneur Vivek Ramaswamy Monday night that if they went through with a separate joint appearance on Fox News they would be forbidden from participating in subsequent committee-sanctioned debates, reports POLITICO’s Meridith McGraw.
The warning, relayed to POLITICO by a person familiar with the conversations, had an effect. The candidates and network have decided to change up the format. Instead of appearing side-by-side, they will now sit for two separate, back-to-back segments. The RNC approved of the new format, according to another person familiar with the matter and granted anonymity to discuss it freely.
The RNC has explicitly forbidden candidates from participating in non-sanctioned debates, though it is not always entirely clear where the line is drawn. Florida Gov. Ron DeSantis is slated to debate California Gov. Gavin Newsom on Fox News, but it is believed that such a head-to-head doesn’t violate the committee’s rules as it is not explicitly a GOP primary forum.
KINGMAKER — It’s a Tuesday night, and Chad Connelly is addressing a small congregation inside the Truth Christian Ministries International Church. The church is usually shuttered on Tuesdays, but the pastor has called a special meeting. This is unlike their Sunday worship services or their Wednesday Bible study. Tonight, their guest is sharing his story — how he went from an upbringing in small-town South Carolina, to a career in engineering, to family tragedy, to national politics. Connelly, the church’s guest, has emerged as perhaps the most active evangelical political organizer in the 2024 presidential race, reports Samuel Benson of the Deseret News.
Connelly isn’t your typical evangelical kingmaker. He’s not a pastor, nor is he linked to one of the longstanding powerbrokers, like the Christian Coalition or the Faith & Freedom Coalition. He’s not a traditional politician, either — aside from a stint as the Republican Party chair in South Carolina, he’s never held elected office. But under the banner of his organization Faith Wins, Connelly has amassed an army of some 16,000 evangelical pastors, to whom he’s issued two specific requests: register your congregants to vote, and teach them to vote “Biblical values.”
ACCESSION PLAN — The European Union is gearing up to open negotiations with Ukraine on its future accession to the bloc with a formal announcement expected as soon as December, report Nicholas Vinocur, Jacopo Barigazzi and Clea Caulcutt.
According to three diplomats with knowledge of the plans, leaders are preparing to give Kyiv the green light to begin formal talks on joining the 27-country bloc before the end of the year.
Ukraine is at the heart of a major new push to expand the EU to as many as 35 countries. European Commission President Ursula von der Leyen said in her annual address to Parliament last month that Ukraine’s future was “in the Union.”
EU countries granted Kyiv status as a candidate for EU membership in June, and the Commission is due to issue a “progress report” on how well Ukraine and other aspiring members are meeting the bloc’s conditions for joining in November, according to an EU official who spoke to journalists today.
Once the progress report has been adopted, the Commission will make a statement that will make it “very hard for member states not to say let’s open negotiations” for Ukraine, said one EU diplomat who, like others, was granted anonymity to discuss confidential matters. “The political push around that will just be too big for individual member states to resist. The working assumption is indeed that by December, the European Council will decide to open negotiations.”
Any decision to open formal negotiations for Ukraine to join the EU is politically and legally fraught. In order to start talks, Ukraine is legally required to meet seven conditions laid out by the Commission, including judicial reforms and curbing corruption. As of August, only two of the seven conditions had been met, the Ukrainian government said at the time.
BREAKING BARRIERS — Canada’s House of Commons has elected Liberal MP Greg Fergus as speaker — the first time a Black Canadian will hold the role, writes Nick Taylor-Vaisey.
Fergus, who represents a Quebec district across the river from Ottawa, bested six other candidates: Chris d’Entremont, Carol Hughes, Alexandra Mendès, Peter Schiefke, Sean Casey and Elizabeth May.
Fergus takes on the task of presiding over a fractious House. “What motivates me, and what I vow to work night and day to promote and advance, can be summed up in one word, respect,” Fergus said during a short speech before polling stations opened in the chamber.
He promised to be “firm, thoughtful, collaborative, consistent and certainly fair.”
Some Conservatives were vocally opposed to Fergus’s candidacy. Calgary MP Michelle Rempel Garner claimed a past ethics violation made him unfit for the role.
MPs voted in person on a secret ranked ballot. The detailed vote breakdowns are never released publicly.
CLEAR THE QUEUE — Netflix shipped its last DVDs last week, finally ending the era of DVDs sent through the mail. It was the death knell in a long move away from physical media shipping to our door or being rented from a video store. Now, we all stream. But what’s the current state of streaming media? It’s necessarily a different business model, prioritizing above all else drawing new subscribers to a service. And with the proliferation of streaming services, sometimes it makes sense for these services to allow shows or movies to move around, going on and off platforms. That changes what TV and movie executives want to make, and so on down the line. The model means that unlike Netflix’s once vast library of DVDs, consumers are now at the whim of the services that they do subscribe to in order to decide what to watch. Streaming has left us with entertainment at our fingertips, but has also in some ways narrowed and changed our choices. Angela Watercutter reports for WIRED, along with some of her own memories of working in a video store.
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