Reading time – 5 min.
We devoted the second part of our exciting story to the brightest representatives of the so-called “New York group”, and now we are ready to introduce you and its influential opponents – we will call them the “Feds”.
And let’s start, of course, with the main characters:
Meet Steven Turner Mnuchin, American entrepreneur, investment banker, financier, film producer and former top executive at Goldman Sachs.
Donald Trump’s victory in the 2016 elections brought him the chair of the Cabinet of the President of the United States – Mnuchin has been heading the Treasury Department since February 13, 2017.
The department controlled by the head of the Ministry of Finance – the Office of the Comptroller of the Currency (OCC) – has been trying since 2018 to introduce a new comprehensive set of rules regulating the activities of non-banking structures and financial technology companies (and, of course, players in the cryptocurrency market).
The voluminous document, containing over 80 recommendations addressed to regulators and Congress, is proudly referred to in the ministry as the “national fintech charter”. Experts share this opinion, since most of the provisions of the new rules will make life easier for companies developing innovative business solutions. That’s just to achieve the practical implementation of the “Charter” the Ministry of Finance has not yet succeeded.
Why? The fact is that the mentioned document not only greatly simplifies the procedure for licensing various types of activities in the field of “fintech”, but also encroaches on the right of the New York State Department of Financial Services (NYSDFS) to issue “licenses” (read the first part of the material).
Guess who is stubbornly blocking the adoption of the “charter”. That’s right – the NYSDFS department! What court are the litigations in? Guessed? That’s right – in the Southern District, in the state of New York!

Meet another powerful representative of the Feds. This is an old acquaintance of Steven Mnuchin – Brian Brooks (Brian P. Brooks). Mr. Brooks, until his recent appointment as head of the Office of the Comptroller of the Currency of the US Department of the Treasury, worked at Coinbase, where he was responsible for legal issues and provided legal support for the project of another “stablecoin” – USDC.
Years of work at Coinbase brought Brooks the status of a true expert in the field of the crypto industry, and the current position has expanded powers to successfully lobby for specific regulatory ideas in the cryptocurrency market.
Looks like that’s what he’s doing today. For example, Brooks has already filed a cross-appeal against the NYSDFS’s blocking of a “national fintech charter.” And the chances of “Federal” to win are quite high.
And he has a lot of reliable allies. Here are just the first persons from the conditional group of “Federals”:

Jay Clayton is the current head of the US Securities Commission (SEC). Donald Trump’s henchman has been seeking an investigation into the activities of Tether and Bitfinex in the courts for three years now, considering the leadership of these two structures to be the organizers of the greatest pyramid scheme in the history of mankind. At the same time, Clayton definitely does not belong to the number of ardent opponents of the crypto industry, since already under him, the SEC gave Grayscale the go-ahead to place securities on the US stock market.

Jeremy D. Aller is the CEO and Founder of Circle, which is responsible for issuing USDC.
Recall that the source of funding for Circle is $135 million in venture capital, and $50 million is direct investment from one participant, Goldman Sachs.
A short list of crypto industry players who share the goals of the Feds today looks something like this: OTC Markets, Grayscale, Consensuns distributed, Ripple.
Special mention should be made of the Chicago Mercantile Exchange (CME Group), which trades bitcoin derivatives (options and futures) with the permission of the SEC Commission.
Are the Feds going on the offensive?
It seems that the “Federals” decided to push the position of the “New York”. And the recent presidential decree looks like a kind of go-ahead: on June 20, 2020, Donald Trump removes Jeffrey Berman, who pretty much annoyed him, from the post of Attorney for the Southern District of New York.
On the same day, rumors spread around Washington that lawyer Jay Clayton, a longtime friend and golf partner of the President of the United States, would become the new district attorney. Yes, the same Clayton who today heads the US Securities Commission – SEC. And the current head of the SEC, without hesitation, confirmed his readiness to take a responsible post in the district where the future fate of “fintech” and the crypto industry is being decided.
The gentlemen are fighting, and the serfs’ forelocks are cracking?
Forecasting is a thankless task, especially when it comes to the excessively close merging of politics with the economy, and the career paths of representatives of the warring parties are bizarrely intertwined for many decades.
The power potential of the groups is quite comparable, and the “Federals”, accustomed to relying on the support of the head of the White House, may well lose an enviable head start in November – following the results of the presidential election.
The hypothetical victory of the “feds” will contribute to the more rapid development of the crypto industry as a whole, since the “New York” gentlemen are concentrated to the maximum extent on protecting personal interests and lobbying the prospects of companies affiliated with the group.
However, do not forget that the first “New York” licenses (BitLicense) were received by nominally “federal” Circle and Ripple. Behind them are other people whose names we are unlikely to know in the near future. Perhaps it is they who write the scenario for the development of the global financial system, and the confrontation between New York and the Feds is only a modest chapter in this saga.
What “shines” Tether? It seems that an unenviable fate was destined for him from the very beginning, because the “New York” group did not issue its “safety certificate” not only to Tether, but also to Bitfinex (although Bitstamp received it). Most likely, the investigation into the activities of the beneficiaries of Tether and Bitfinex will begin to be conducted a little faster. However, one should clearly not count on special promptness before the announcement of the results of the November elections in the United States.
The most negative scenario for ordinary users could be the arrest of Tether and Bitfinex accounts (more precisely, balances on them), followed by protracted litigation in courts of various instances in order to pay compensation to the victims.
This prospect looks especially painful for citizens of Russia, Belarus and Ukraine, since it will be extremely difficult for them to provide legally verified documents with exhaustive confirmation of the sources of origin of funds on blocked accounts (accounts). Most likely, ironically, they will have to send all the papers to the same federal District Court for the Southern District of New York.
The hookmakers at Davis Polk & Wardwell, together with Annette Nazareth, will continue to write and lobby for a variety of bills at a high international level. You don’t think that Anatoly Aksakov, a deputy of the Russian State Duma, is really the sole author of the draft law on crypto regulation for the Russian Federation?
And finally, pay attention to exactly how USDC reacted to Donald Trump’s June 20 decision. There is probably nothing more to add…

If you find an error, please select a piece of text and press Ctrl+Enter.