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    Meet the GOP leaders in charge of critical House environmental committees

    Following the midterm elections in November, President Joe Biden faces a GOP-controlled House of Representatives largely opposed to the administration’s climate change and clean energy policies.
    The Republican-led environmental committees have started to launch oversight of the administration’s climate agenda and have unveiled legislation aimed to maintain or increase fossil fuel production.
    Meet the three GOP leaders who are now heading the key House environmental and climate committees.

    The US Capitol in Washington, DC, US, on Wednesday, Jan. 25, 2023.
    Al Drago | Bloomberg | Getty Images

    Following the midterm elections in November, President Joe Biden faces a GOP-controlled House of Representatives largely opposed to the administration’s climate change and clean energy policies and efforts to curb the country’s dependence on fossil fuel production.
    Although Republicans have a slim majority in the House, the newly GOP-led committees have already started to launch oversight of the government’s climate agenda and have unveiled legislation aimed to maintain or increase fossil fuel production.

    It’s unlikely that Republicans will advance major legislation to the president’s desk, but they will conduct oversight hearings on climate and energy legislation and attempt to redirect funding for climate programs under the historic Inflation Reduction Act.
    Meet the three Republicans who are now leading key House environmental and climate committees:

    Bruce Westerman, chair of House Committee on Natural Resources

    Rep. Bruce Westerman, R-Ark., speaks during a news conference in the Capitol Visitor Center on the Save Our Sequoias Act, that aims to protect the trees from wildfires on Thursday, June 23, 2022.
    Tom Williams | Cq-roll Call, Inc. | Getty Images

    House Republicans selected Westerman to lead the committee that oversees the Interior Department and the Forest Service and plays a role in dictating policy on issues like mineral resources, wildlife conservation, mining and irrigation.
    Westerman, a representative for Arkansas’s 4th Congressional District, has a background in engineering and is a licensed forester. He’s argued the country should focus on advancing technology such as nuclear power and carbon sequestration to address climate change, rather than aggressively limiting the country’s fossil fuel production. He’s also introduced legislation to plant 1 trillion trees globally by 2050 in order to pull carbon out of the atmosphere.
    As the Natural Resources Committee chair, Westerman said he would focus on conducting oversight of the Interior Department’s proposed five-year plan for new offshore oil and gas leases in federal waters. The proposal would block all new drilling in the Atlantic and Pacific oceans within U.S. waters but allow some lease sales in the Gulf of Mexico and the south coast of Alaska.

    “We’re going to be using a lot of oil and gas for the foreseeable future,” Westerman said in a phone interview with CNBC. “Under this administration, they have attacked U.S. production on federal land. That is bad policy, it’s not following the law, and we plan to have oversight.”
    Westerman also said he’s open to working with West Virginia Sen. Joe Manchin, a conservative Democrat, on bipartisan permitting reforms for the country’s energy projects. Such legislation includes Westerman’s Building U.S. Infrastructure through Limited Delays and Efficient Reviews (BUILDER) Act, which aims to speed up the review process for energy projects under the National Environmental Policy Act.
    “I’ve spoken to Manchin a couple of times — he is willing to work on commonsense solutions,” Westerman said.
    While the Natural Resources Committee is one of the most influential panels for environmental and climate policy, the GOP’s agenda will likely be limited by the Biden administration and the Democratic-controlled Senate.
    Domestic critical mineral production could be an area where Democrats and Republicans might work together. Westerman has called for expanding mining to collect minerals necessary for electric vehicles and other clean energy sources like lithium, copper, cobalt and nickel, arguing that doing so will boost U.S. energy security and limit the country’s dependence on Chinese supply chains.
    But Westerman has also emphasized that the U.S. is focusing too much on EV production as a climate solution and he is opposed to the idea of curbing fossil fuel development, both of which are key components of the Biden administration’s climate agenda.
    “We need a realistic approach to energy and the environment to address climate issues,” he said. “I want to focus on policies and programs that actually work.”

    Cathy McMorris Rodgers, chair of House Committee on Energy and Commerce

    Rep. Cathy McMorris Rodgers (R-WA) during a House Energy and Commerce Environment and Climate Change Subcommittee hearing on Capitol Hill on April 2, 2019 in Washington, DC.
    Zach Gibson | Getty Images

    Rep. Cathy McMorris Rodgers, who represents the fifth district of Washington state, is leading the committee at the center of GOP plans to pass energy legislation and conduct oversight of the president’s climate agenda.
    Rodgers, who opposed the president’s Inflation Reduction Act, has argued that Democrats are moving forward with the clean energy transition too quickly, making the country more reliant on China for technology like solar panels and EV batteries.
    She’s introduced legislation that would limit the drawdown of petroleum in the Strategic Petroleum Reserve until the Energy Department develops a plan to increase the percentage of federal lands leased for oil and gas production.
    As the Energy and Commerce Committee chair, Rodgers has supported oversight plans that involve investigating climate spending under the IRA as well as legislative plans focused on streamlining permitting to modernize energy infrastructure and promoting carbon capture, nuclear power, natural gas and hydropower.

    More from CNBC Climate:

    For instance, Rogers has highlighted concerns over a Department of Energy loan program aimed at advancing clean energy technology not yet funded by the private sector. The program will be expanded under the IRA.
    “The Energy and Commerce Committee is at the center of solving the most important issues facing hardworking Americans – lowering costs, promoting free speech, and preserving free markets,” Rodgers said in a statement.
    Earlier this month, the committee reviewed 17 energy bills, including those that would boost mining and oil and gas drilling, curb taxes on the fossil fuel industry and roll back climate provisions under the IRA.
    The actions include repealing the Environmental Protection Agency’s Greenhouse Gas Reduction Fund, a $27 billion program designed to finance energy-saving projects, as well as eliminating the IRA’s Methane Emission Reduction Program, which imposes a federal fee on methane emissions from the oil and gas sector.
    It’s unlikely, however, that Republicans will have success changing or repealing climate programs under the IRA, since the president has the authority to veto congressional efforts to change climate-spending provisions.

    Frank Lucas, chair of the House Science, Space and Technology Committee

    Rep. Frank Lucas, R-Okla., chairman of the House Science, Space, and Technology Committee, is interviewed by CQ-Roll Call, Inc via Getty Images in his Rayburn Building office on Thursday, January 26, 2023.
    Tom Williams | Cq-roll Call, Inc. | Getty Images

    Rep. Frank Lucas, a fifth-generation Oklahoman who operates a farm and cattle ranch, is the new chair of the committee that has jurisdiction over key federal scientific research and development as well as authority over research activities at agencies like the Department of Energy, the Federal Aviation Administration, the National Weather Service and the EPA.
    Lucas has said the committee would focus on issues including securing the supply chain for advanced technologies, renewing U.S. leadership in space and aeronautics and researching ways to make domestic energy cleaner.
    “We’ll be focusing on promoting innovative technologies to facilitate our clean energy transition,” Lucas told CNBC. “Our goal is to make American energy cleaner, more affordable and more reliable. So every energy source and technology pathway is on the table in our effort to reduce emissions.”
    Lucas has introduced legislation that would make the National Oceanic and Atmospheric Administration — the agency that forecasts weather, monitors storms and researches the impacts of climate change — an independent agency rather than a part of the Commerce Department. The bill would require Democrats’ support to pass.
    Lucas said the committee would also conduct “robust oversight” of the spending being distributed to advance the country’s clean energy sector.
    “We’ll focus on helping fossil fuels become cleaner and more efficient now, investing in battery storage and other tools to make renewable sources like wind and solar energy more reliable and supporting advanced technologies for nuclear and hydrogen,” Lucas said.
    The previous chair of the committee, the now-retired Lamar Smith, R-Texas, had repeatedly questioned the science of climate change and accused federal researchers of manipulating climate research.
    In contrast, Lucas has acknowledged the threat of disasters like drought and heat waves that are growing worse with climate change, but has resisted moving to curb fossil fuel production to address the problem.

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    CNBC Daily Open: U.S. stocks don’t seem concerned about inflation, disregard jumping retail sales

    People walk along 5th Avenue in Manhattan, one of the nation’s premier shopping streets on February 15, 2023 in New York City.
    Spencer Platt | Getty Images

    This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Like what you see? You can subscribe here.

    What you need to know today

    U.S. retail sales in January jumped 3%, versus an expected 1.9%. The figure handily beat a decline of 1.1% in December. Separately, industrial production was flat in January. Analysts were estimating a 0.4% gain.

    “BYD is so much ahead of Tesla in China … it’s almost ridiculous,” said Charlie Munger, Berkshire Hathaway’s vice chairman. He called the Chinese electric vehicle maker his favorite stock ever. Berkshire doesn’t seem to like TSMC so much anymore, however, dumping almost 86% of those shares between the third and fourth quarter of 2022.

    PRO Investors are “taunting the Fed with crypto, meme stocks, and unprofitable companies responding best to Fed communications,” said JPMorgan’s Marko Kolanovic, who correctly called the March 2020 bottom. He warned that “this divergence cannot go further.”

    The bottom line

    It’s as if investors aren’t concerned about inflation and higher interest rates anymore. Strength in the U.S. economy — which would imply further rate hikes — has been translating into gains in the markets.

    Yesterday I mentioned how sustained consumer spending might be propping up the economy. Indeed, the year-over-year increase in January’s retail sales — 6.4% — is exactly the same number as the year-on-year rise in the consumer price index. It appears that the prospect of sustained economic growth is injecting optimism into stocks too. The Dow Jones Industrial Average edged up 0.11%, the S&P 500 added 0.28% and the Nasdaq Composite rose 0.92%.
    Recent economic activity and market movement are forcing economists and investors to reconsider the effect of interest rates. The higher cost of borrowing typically slows economic growth by curtailing spending and increasing unemployment which, in turn, depress stocks. Yet “the monthly reports on industrial production, retail sales, and jobs were generally better than expected and point to a pickup in economic activity in early 2023 after a soft patch in late 2022,” as Bill Adams, chief economist for Comerica Bank, put it.
    This topsy-turvy relationship between higher interest rates and a pickup in economic activity is causing some investors, such as the founder of Santori Fund, Dan Niles, to predict that the Federal Reserve might raise rates higher than 6%. And if the price of everything keeps rising even then? It’s hard to imagine what the Fed would do next.
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    Charlie Munger says BYD is so far ahead of Tesla in China ‘it’s almost ridiculous’

    Charlie Munger said Wednesday that Tesla pales in comparison to BYD in China, calling the Chinese electric vehicle maker his favorite stock ever.
    “I have never helped do anything at Berkshire [Hathaway] that was as good as BYD and I only did it once,” the 99-year-old investor said at the Daily Journal’s virtual annual meeting Wednesday. Berkshire initial investment is now “worth about $8 billion or maybe [$9 billion]. That’s a pretty good rate of return,” said Munger, Warren Buffett’s longtime investment partner.

    related investing news

    BYD has been a lucrative bet for Berkshire, which first bought about 220 million shares in September 2008. The stock has jumped more than 600% in the past 10 years amid the massive growth in electric vehicles. Berkshire has actually been trimming its BYD stake in the past year as the stock has become increasingly pricey.
    “At the current price of BYD stock, little BYD is worth more than the entire Mercedes corporation. It’s not a cheap stock, but on the other hand, it’s a very remarkable company,” Munger said.

    Arrows pointing outwards

    Munger, Berkshire’s vice chairman and a Daily Journal board member, credited Li Lu, founder of Seattle-based asset manager Himalaya Capital, for introducing him to BYD. Munger also said BYD CEO Wang Chuanfu is unusual, calling him a genius and a workaholic.
    Asked if he would prefer Tesla or BYD as an investment, Munger said the answer is easy.
    “Tesla last year reduced its prices in China twice. BYD increased its prices. We are direct competitors. BYD is so much ahead of Tesla in China … it’s almost ridiculous,” Munger said.

    BYD recently said it expects record adjusted annual profit for 2022 of 16.3 billion yuan ($2.4 billion), about 1,200% above 2021.
    “BYD last year made more than $2 billion after taxes in the auto business in China. It’s incredible what’s happened,” Munger said. “If you count all the manufacturing space they have in China to make cars, it would amount to a big percentage of the Manhattan island, and nobody had ever heard of them a few years ago.”
    The longtime investor called Tesla CEO Elon Musk talented — and “peculiar.” He previously said what Musk achieved in the car business was a “minor miracle.”
    “I don’t buy him, and I don’t short him,” Munger said Wednesday.

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    Stocks making the biggest moves after hours: Roku, Cisco Systems, Twilio and more

    In this photo illustration, a hand holding a TV remote control points to a screen that displays the Roku logo.
    Rafael Henrique | Lightrocket | Getty Images

    Check out the companies making headlines after hours.
    Roku — Shares spiked roughly 12% after Roku beat on the top and bottom lines in its latest quarter. The streaming device company reported a loss of $1.70 per share, better than the forecasted $1.73 per share from analysts polled by Refinitiv. Roku posted $867 million in revenue, greater than the consensus estimate of $802 million.

    Cisco Systems — Shares advanced 4% in extended trading after Cisco Systems surpassed expectations in its latest earnings results. The digital communications company reported earnings of 88 cents per share, slightly higher than consensus estimate from Refinitiv that showed 86 cents earnings per share. Cisco reported revenue of $13.59 billion, better than expectations of $13.43 billion.
    Twilio — The stock jumped 12% in extended trading after Twilio reported a revenue beat. The communications tools maker reported revenue of $1.02 billion. Analysts polled by Refinitiv were forecasting $1 billion in revenue.
    Shopify — Shopify shares fell more than 6% after the e-commerce company issued lighter-than-expected guidance for the current quarter. Otherwise, Shopify beat expectations on the top and bottom lines.
    Zillow Group — Shares added more than 2% after Zillow Group beat profit and sales expectations. Zillow reported adjusted earnings of 21 cents per share on revenue of $435 million. Analysts surveyed by Refinitiv were expecting earnings of 7 cents per share on revenue of $415 million.
    Boston Beer — Shares dropped more than 10% after the brewing company behind Samuel Adams reported results from its latest quarter. Boston Beer CEO Dave Burwick said revenue growth was “strong,” but margins fell below the company’s expectations. Burwick added that Twisted Tea is experiencing double-digit growth, while hard seltzer is in decline. “We have new initiatives in place to improve Truly share trends and adapt our cost structure to the current volume environment, which we believe will lead to long-term success,” he said in a statement.
    Synopsys — Shares declined more than 4% after Synopsys reported weaker-than-expected guidance for its fiscal second quarter. The silicon design company beat earnings expectations in the first quarter, but revenue came in line with expectations.

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    AMC Networks names a new CEO: Kristin Dolan, spouse of chairman James Dolan

    AMC Networks has selected Kristin Dolan, an industry veteran and spouse of interim chairman James Dolan, as its new CEO.
    AMC Networks, which owns networks AMC and IFC, is struggling with cord cutting and a tough ad market.
    AMC is known for airing “The Walking Dead” and “Breaking Bad.”

    Founder and CEO of 605 Kristin Dolan participates in a keynote panel on the future of video at CES 2018 at Park Theater at Monte Carlo Resort and Casino in Las Vegas on January 10, 2018 in Las Vegas, Nevada.
    Ethan Miller | Getty Images

    AMC Networks, the company that owns TV channels like AMC and IFC, named Kristin Dolan its new CEO on Wednesday.
    Dolan, who will become CEO effective Feb. 27, has served on AMC’s board and worked closely with the company. She’s an industry veteran, and most recently served as CEO of 605, a data analytics firm that measures audience numbers for TV networks.

    She is also the spouse, albeit separated, of James Dolan, the AMC Networks interim executive chairman James Dolan.
    “I look forward to bringing my broad experience — across programming, cable operations, and most recently, utilizing data to reimagine television advertising — to leverage AMC Networks’ strong assets, drive the next phase of the company’s growth, and build shareholder value in the coming years,” Kristin Dolan said in a news release on Wednesday, noting AMC is where she started her career.
    Dolan held various marketing roles at AMC, when it was known as Rainbow Media, in the early part of her career. She also spent 16 years in various roles at Cablevisions Systems Corp., the cable-TV company once owned by the Dolan family before it was sold to Altice in 2016.
    In November, Christina Spade stepped from her role as CEO less than three months after being promoted to the position. That same week, AMC told its employees it would be going through a significant round of layoffs, which amounted to roughly 20% of its U.S. staff, CNBC previously reported.
    The Dolan family has been considering the best way to move AMC Networks forward as it deals with cord-cutting and a tight ad market.

    In a memo to staff in November, James Dolan said it was the company’s belief that cord-cutting losses would have been stemmed by streaming. “This has not been the case. We are primarily a content company and the mechanisms for the monetization of content are in disarray,” he told staff in a memo at the time.
    Shortly after Spade stepped down, AMC announced it would begin a restructuring “designed to achieve significant cost reductions, in light of ‘cord cutting’ and the related impacts being felt across the media industry as well as the broader economic outlook,” according to a securities filing. The company said it expects the restructuring to be completed by the end of this year.
    More than half of AMC Networks’ revenue comes from the traditional pay-TV bundle, which has been bleeding subscribers as they opt for less expensive streaming services.
    In addition to its linear TV namesake channel, which is known for content like “The Walking Dead,” and recent new series built off the library of the novelist Anne Rice, the company owns streaming services like AMC+ and horror-focused Shudder.
    For some time now, AMC Networks has been considered an acquisition target for larger media companies looking to bulk up their libraries.

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    Stocks making the biggest moves midday: Roblox, Airbnb, Barclays, Silvergate Capital & more

    Rafael Henrique | SOPA Images | LightRocket | Getty Images

    Check out the companies making the biggest moves midday Wednesday:
    Roblox — Shares of the video game company skyrocketed 26.38% after the company reported $899.4 million in fourth-quarter bookings, surpassing the $875.3 million bookings expected by analysts, according to StreetAccount. CEO David Baszucki also said, “With 65 million daily active users in January, we are driving towards our vision to reimagine the way people come together by enabling deeper forms of expression, communication and immersion.”

    Airbnb — Shares of the vacation rental company popped 13.35% after a stronger-than-expected fourth quarter. Airbnb reported 48 cents in earnings per share on $1.90 billion of revenue. Analysts surveyed by Refinitiv had projected 25 cents per share and $1.86 billion of revenue. The company also said it was seeing “continued strong demand” in the first quarter.
    Silvergate Capital — The crypto bank surged 28.57% after Ken Griffin’s Citadel Securities revealed a 5.5% stake in the company worth about $25 million.
    Devon Energy — Shares tumbled 10.49% after the energy company reported fourth-quarter earnings and revenue that came in below expectations. Devon earned $1.66 per share on revenue of $4.3 billion. Analysts expected a profit of $1.75 per share on revenue of $4.39 billion.
    Akamai Technologies — The cloud stock dropped 10.41% after Akamai issued first-quarter revenue and earnings guidance that was below expectations. RBC Capital Markets also downgraded shares to sector perform from outperform and slashed its price target to $85 from $100 per share.
    Generac Holdings — Shares rallied 8% after the power-generator maker reported fourth-quarter earnings of $1.78 per share, topping StreetAccount’s estimate of $1.75 per share. Generac’s revenues of $1.05 billion came in just below a consensus forecast of $1.07 billion.

    Barclays — The U.K. bank’s U.S.-listed stock tumbled 8.35% after Barclays reported an annual net profit slide of 19%, thanks in part to a trading blunder in the U.S. that resulted in litigation and conduct charges.
    Analog Devices — The chipmaker gained 7.47% after reporting adjusted earnings for the fiscal first quarter of $2.75, higher than the $2.61 expected from analysts, per StreetAccount. Revenue came in at $3.25 billion, topping expectations of $3.15 billion.
    Bath & Body Works — Shares of the retailer shed 3.76% after being downgraded to neutral from buy by Citi. The Wall Street firm said it sees significant margin headwinds continuing into 2023 and beyond.
    Paramount Global — Shares gained 9.31% after Berkshire Hathaway revealed it increased its stake in the entertainment company. Warren Buffet’s firm now owns more than 93 million shares of Paramount.
    Martin Marietta Materials — Shares gained 7.47% after the company reported fourth-quarter net income of $183.6 million, up from $156.8 million a year ago. However, it missed Wall Street’s expectations, with adjusted earnings per share coming in at $3.04, versus Street Account’s estimate of $3.08. Products and services revenue also missed expectations.
    American Eagle Outfitters — The apparel company’s stock dipped 2.93% after Jeffries downgraded it to hold from buy. The Wall Street firm cited the historically low performance of the clothing and footwear category over the past 8 recessions.
    Taiwan Semiconductor — The Taiwanese semiconductor maker’s stock declined 5.31% after Berkshire Hathaway revealed it reduced its stake in the company by 86% from the previous quarter to $168 million.
    — CNBC’s Michael Bloom, Alex Harring, Jesse Pound, Hakyung Kim and Pia Singh contributed reporting.

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    SEC proposes rules that would change which crypto firms can custody customer assets

    SEC chair Gary Gensler proposed amending federal custody requirements, expanding the rules to include assets like crypto, a change that would require crypto exchanges to gain further regulatory approval.
    The proposed changes would mandate custodians, including crypto exchanges, secure or maintain certain federal or state registrations, even as regulators are both increasing scrutiny on crypto companies and making it more difficult to secure regulatory approval for crypto products.

    The Securities and Exchange Commission voted 4-1 on Wednesday to propose sweeping changes to federal regulations that would expand custody rules to include assets like crypto and require companies to gain or maintain registration in order to hold those customer assets.
    The proposed amendments to federal custody rules would “expand the scope” to include any client assets under the custody of an investment advisor. Current federal regulations only include assets like funds or securities, and require investment advisors, like Fidelity or Merrill Lynch, to hold those assets with a federal- or state-chartered bank, with a few highly specific exceptions.

    It would be the SEC’s most overt effort to rein in even regulated crypto exchanges that have substantial institutional custody programs serving high-net-worth individuals and entities which custody investor assets, like hedge funds or retirement investment managers.

    U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler, testifies before the Senate Banking, Housing and Urban Affairs Committee during an oversight hearing on Capitol Hill in Washington, September 15, 2022.
    Evelyn Hockstein | Reuters

    The move poses a fresh threat to crypto exchange custody programs, as other federal regulators actively discourage custodians like banks from holding customer crypto assets. The amendments also come as the SEC aggressively accelerates enforcement attempts.
    While the amendment doesn’t specify crypto companies, Gensler said in a separate statement that “though some crypto trading and lending platforms may claim to custody investors’ crypto, that does not mean they are qualified custodians.”
    Under the new rules, in order to custody any client asset — including and specifically crypto — an institution would have to hold the charters, or qualify as a registered broker-dealer, futures commission merchant, or be a certain kind of trust or foreign financial institution.
    SEC officials said that the proposal would not alter the requirements to be a qualified custodian and that there was nothing precluding state-chartered trust companies, including Coinbase or Gemini, from serving as qualified custodians.

    The officials emphasized that the proposed amendments did not make a decision on which cryptocurrencies the SEC considered securities.
    The amended regulation would also require a written agreement between custodians and advisors, expand the “surprise examination” requirements, and enhance recordkeeping rules.
    The SEC had previously sought public feedback on whether crypto-friendly state-chartered trusts, like those in Wyoming, were “qualified custodians.”
    “Make no mistake: Today’s rule, the 2009 rule, covers a significant amount of crypto assets,” Gensler said in a statement. “As the release states, ‘most crypto assets are likely to be funds or crypto asset securities covered by the current rule.’ Further, though some crypto trading and lending platforms may claim to custody investors’ crypto, that does not mean they are qualified custodians.”
    But Gensler’s proposal seemed to undercut comments from SEC officials, who insisted the moves were designed with “all assets” in mind. The SEC chair alluded to several high-profile crypto bankruptcies in recent months, including those of Celsius, Voyager, and FTX.
    “When these platforms go bankrupt—something we’ve seen time and again recently—investors’ assets often have become property of the failed company, leaving investors in line at the bankruptcy court,” Gensler said.
    The proposed changes by the SEC are also intended to “ensure client assets are properly segregated and held in accounts designed to protect the assets in the event of a qualified custodian bankruptcy or other insolvency,” according to material released by the agency on Wednesday.
    Coinbase already has a similar arrangement in place. In its most recent earnings report, the exchange specified that it keeps customer crypto assets “bankruptcy remote” from hypothetical general creditors, but noted that the “novelty” of crypto assets meant it was uncertain how courts would treat them.
    The SEC has already begun to target other lucrative revenue streams for crypto institutions like Coinbase, which is the only publicly traded pure crypto exchange in the U.S. Last week, the SEC announced a settlement with crypto exchange Kraken over its staking program, alleging it constituted an unregistered offering and sale of securities.
    At the time, Coinbase CEO Brian Armstrong said a potential move against staking would be a “terrible path” for consumers.
    Coinbase reported $19.8 million in institutional transaction revenue and $14.5 million in custodial fee revenue for the three months ending Sept. 30, 2022. Together, that institutional revenue represented about 5.8% of Coinbase’s $590.3 million in revenue for that same time period. But that percentage does not include any revenue from blockchain rewards or interest income from institutional custody clients.
    “Coinbase Custody Trust Co. is already a qualified custodian, and after listening to today’s SEC meeting, we are confident that we will remain a qualified custodian even if this proposed rule is enacted as proposed,” Coinbase chief legal officer Paul Grewal said. “We agree with the need for consumer protections — as a reminder, our client assets are segregated and protected in any eventuality.”
    Grayscale Bitcoin Trust (GBTC), for example, custodies billions of dollars worth of bitcoin using Coinbase Custody, holding roughly 3.4% of the world’s bitcoin in May 2022.
    In the aftermath of the SEC’s approval vote, comments from commissioners made it unclear what the full extent of the SEC’s proposed rulemaking would be, and how it could impact existing partnerships. Grayscale is not a registered investment advisor, and so under the proposed amendments would not apparently face any material impact to their custody arrangement.
    A person familiar with the matter did not expect the relationship would be adversely affected, noting Coinbase Custody’s qualified custodian status as a New York state-chartered trust, and observing that investment advisors might even transition from directly holding bitcoin to owning GBTC shares as a result of the proposed amendments.
    Within the commissioner’s ranks, there was dissent and questions over the nature of the proposed rules. “The proposing release takes great pains to paint a “no-win” scenario for crypto assets,” SEC commissioner Mark Uyeda said. “In other words, an adviser may custody crypto assets at a bank, but banks are cautioned by their regulators not to custody crypto assets.”
    But Uyeda also noted that the proposal was a move towards rulemaking, rather than what he called a historic use of “enforcement actions to introduce novel legal and regulatory theories.’
    It was a sentiment echoed by Coinbase’s chief legal officer, who emphasized a need for clarity, a clarion call that has been echoed throughout the industry. “We encourage the SEC to begin the rulemaking process on what should or should not be considered a crypto security, especially given that today’s proposal acknowledges that not all crypto assets are securities. Rulemaking on that topic could offer needed clarity to consumers, investors, and the industry,” Grewal said.
    — CNBC’s Kate Rooney contributed to this report.

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    Lael Brainard will take control of America’s economic nerve centre

    A dimly lit room, with space for just a small meeting table and a desk, may not sound like a nerve centre of the American economy. But the office for the director of the National Economic Council (nec), located in the White House’s west wing, is crucial to charting the country’s direction. Its occupant for the past two years, Brian Deese, has crafted the Biden administration’s response to the covid-induced slowdown, the rise in inflation and challenges from China. In the coming days Lael Brainard, who has been a board member of the Federal Reserve since 2014, will take over the poky but powerful office.Amid all the formidable political machinery in Washington, at first glance the institution of the nec also seems puny. It is young—having been founded three decades ago—and has only 30 staff. But it is the clearing-house for the White House’s economic debates, helping the president decide on strategy. It then co-ordinates departments in the design and implementation of policy. With power concentrated in Joe Biden’s White House, the nec has gained extra clout compared with cabinet agencies, notably the Treasury.After a tenure of 25 months, Mr Deese steps down at a natural time for a reshuffle, following midterm elections. He has had a productive run. Congress passed four big pieces of economic legislation, adding up to trillions of dollars of spending: a covid-recovery package, plus hefty investment in infrastructure, semiconductors and clean technologies.Legislative success stems from many officials working together. But Mr Deese was consistently at the centre of the action, meaning Ms Brainard has big shoes to fill. “He had a commanding understanding of every issue,” reports Jason Furman, an economist and deputy director of the council More