President Joe Biden's odds of securing the Democratic nomination for the 2024 presidential election surged to 45% on Polymarket, surpassing Vice President Kamala Harris’s odds. Despite Biden's increased nomination odds, his chances of winning the general election is still lower than Harris' and is way behind former President Donald Trump. Meanwhile, U.S. senators renewed efforts to ban congressional stock trading, and FDIC nominee Christy Goldsmith Romero stated that banks should be allowed to custody crypto during a congressional hearing.
Biden’s Nomination Odds Surge on Polymarket
After his first press conference in months, President Joe Biden's odds of becoming the Democratic nominee for president surpassed those of Vice President Kamala Harris on the crypto-based prediction market platform Polymarket. At one point, traders gave Biden a 51% chance of securing the nomination, up from 33% earlier in the day.
At press time, Biden’s odds stood at 45%. Harris’ probability dipped to 37% before recovering to 40%.
Democratic nominee 2024 odds (Source: Polymarket)
Despite Biden’s nomination odds increasing, his chances of actually winning the general election in November stand at 14%, slightly lower than Harris' 16%. Former President Donald Trump, the likely Republican nominee, is still the favorite to win the White House, with Polymarket’s contract giving him a 60% chance of victory.
During the press conference, Biden made a few verbal slips, including mistakenly referring to Harris as "Vice President Trump." However, he also addressed foreign policy issues and passionately spoke about gun violence, almost yelling at one point. Biden also talked about his plan to stay in the race but acknowledged that he needs to address concerns about his condition.
The president's age and cognitive health have sparked calls from many well known Democrats, donors, and even actor George Clooney, for him to step aside despite his insistence on staying in the race.
Polymarket has seen huge amounts of activity in recent months with hundreds of millions of dollars at stake. The platform was able to gain popularity despite having to restrict U.S. users because of regulatory settlement.
Senators Push to Ban Congressional Stock Trading
While the crypto community is free to make bets on politicians, a bipartisan group of U.S. senators renewed efforts to ban members of Congress from trading stocks. In a Jul. 9 letter to House Speaker Mike Johnson and Democratic Leader Hakeem Jeffries, 20 senators proposed an amendment to the Stop Trading on Congressional Knowledge Act of 2012 to prevent lawmakers from engaging in stock trading.
Senator Josh Hawley passionately spoke about the need to eliminate profiteering based on exclusive information during a press conference. According to Hawley, “Congress should not be here to make a buck.”
The senators pointed out that 97 members traded stocks in areas where their committees had a direct impact and also revealed that members of Congress outperformed the S&P 500 by an average of 17.5%. Shockingly, a recent investigation revealed that one in seven sitting members of Congress violated the STOCK Act between 2021 and 2023.
The proposed amendment will ban sitting congresspeople from trading stocks within 90 days of the bill's enactment and will also prohibit the sitting president, vice president, and the spouses and dependent children of all sitting Congress members from trading stocks starting in March of 2027. Violations will result in a penalty of 10% of the asset's value. This is a big increase from the current $250 fine per transgression.
The senators' letter also stressed the need for stricter measures to prevent unethical behavior and restore public trust in democratic institutions. Senator Golden believes that members of Congress should serve their constituents rather than exploit their positions for personal gain.
Attempts to amend the STOCK Act started back in January of 2022 with a letter to then-Speaker Nancy Pelosi and Minority Leader Kevin McCarthy. The push was fueled by public disclosures of profitable trades by top lawmakers during the early days of the COVID-19 pandemic.
Congresswoman Pelosi specifically raised a few red flags as her successful trading activity ended up increasing her net worth to over $250 million, despite an annual congressional salary of only $193,000.
FDIC Nominee Backs Crypto Custody for Banks
The rules of investment for banks are also changing. During a Jul. 11 hearing, Christy Goldsmith Romero, the nominee for the head of the Federal Deposit Insurance Corporation (FDIC), testified to Congress that banks should be allowed to custody crypto assets.
In response to Senator Cynthia Lummis, Romero stated that crypto is “another business just like any other business” and pointed out that it is not the FDIC’s role to direct banks on which assets to custody. The Digital Chamber, a crypto advocacy group in Washington, DC, has shown support for Romero's nomination because of her more progressive stance on the crypto industry.
Senator Lummis' question was the only mention of crypto during the hearing for candidates for positions at the FDIC, Securities and Exchange Commission, the United States Treasury, and the Financial Stability Oversight Council.
On the same day, Congress failed to overturn President Joe Biden’s veto of the Staff Accounting Bulletin-121 (SAB-121) repeal. The final vote was 60 votes short of a two-thirds majority. SAB-121, an SEC rule, mandates that banks custodying crypto assets have to hold these assets as liabilities on their balance sheets. This effectively discourages banks from holding digital assets for customers.
The regulatory battle over cryptocurrencies continues to be an issue in the US. The elections have also pushed crypto into the spotlight, especially after former President Donald Trump declared himself “the crypto President.” The 2024 election and the SEC's ongoing hostility toward the crypto industry have caused industry executives to engage with DC lawmakers and initiate political efforts, like The Bitcoin Voter Project and the Stand With Crypto political action committee.
Additionally, the Supreme Court's recent decision to overturn Chevron USA Inc. vs. Natural Resources Defense Council had serious implications. This ruling reverses a 40-year precedent that allowed federal regulatory agencies to create rules without Congressional approval.
Firms Navigate Around SEC Crypto Accounting Rule
Some companies and financial institutions have proposed business practices that the U.S. Securities and Exchange Commission (SEC) staff have agreed would allow them to avoid controversial crypto accounting guidance, according to an SEC source. Since the release of Staff Accounting Bulletin No. 121 (SAB 121) in March of 2022 and after numerous crypto industry bankruptcies, firms have asked for SEC advice on developing new cryptocurrency-related policies. Despite these consultations, SAB 121 itself has not changed.
Starting in 2022, several crypto firms, including Terraform Labs, Celsius, Genesis, and FTX, filed for bankruptcy. Naturally, these cases raised some serious questions about customer treatment. However, some firms have demonstrated that their procedures and technology allow customers to reclaim their crypto assets in bankruptcy situations, similar to traditional assets like dollars, thus avoiding SAB 121 obligations.
Firms have made multiple changes to protect assets, including policies and procedures on accounting, asset protection, and access control, according to the SEC source. The SEC did not confirm if crypto firms had been assured removal from SAB 121’s scope. However, the source mentioned that any entity with the appropriate technology, practices, and procedures could receive no-objection guidance from the SEC’s accounting staff.
Reps. Mike Flood and Wiley Nickel introduced a resolution to overturn SAB 121 in February. In May, the House voted 228-182 to overturn the bulletin, with support from mostly Republicans and 21 Democrats. The Senate later voted 60 to 38 in favor, with support from some Democrats, including Senate Majority Leader Chuck Schumer. However, President Joe Biden vetoed the resolution, and an attempt by the House to override the veto failed earlier this week.
