Yesterday we were supposed to have a preliminary injunction hearing in Texas Blockchain Council v. Department of Energy. But, as often happens in litigation, things change quickly. The judge on Tuesday issued an order canceling today's hearing based on the parties reaching a “tentative agreement” on the overall dispute. This agreement must be completed and submitted by Friday, March 1.
Speculation time.
What could this mean? One element of the standard for a temporary restraining order (TRO), and a preliminary injunction, is that the party requesting it must demonstrate that it is “likely to succeed on an objective basis.” This means that the judge must believe that success is not only possible, but more likely than not. Here, the judge did agree that “Plaintiffs are likely to succeed in showing that the facts alleged by Defendants in support of the emergency motion do not rise to the level of justification for such action.” and that the government's action was arbitrary, capricious, or abused its discretion.
Losing a TRO, while not a positive thing, is a big red flag. The government doesn't like to lose, and once they lose on this measure, they very likely already know they will lose on the following motions: preliminary injunction and permanent injunction.
One problem there is detection. As part of the proving process, prosecutors must request internal communications and other materials that might show an abuse of discretion or undue influence. The EIA has only used its emergency data collection authority in a few states Actual emergenciessuch as an emergency survey in response to the 2021 Colonial Pipeline cyberattack.
Given the context of Senator Warren and the Biden Administration's ongoing attacks on Bitcoin mining and Bitcoin, is there any reason to believe that there are no emails or bad communications showing undue influence between those offices and the EIA? What could have prompted a historically cautious and respected agency to suddenly undertake such modest work as EIA 862, which was then certified by the President's Office of Management and Budget in clear technical violation of their own internal standards?
It's not as if this kind of undue influence hasn't happened before… Look at the lawsuit filed by Custodia Bank, for example, where “perhaps the most surprising fact that would never have seen the light of day had it not been discovered is: In the wake of the collapse of FTX and Vice President Barr's ambiguous briefing regarding Custodia membership and master account requests, Board staff edited and rewrote key portions of an internal Kansas City Fed memo …Discovery reveals that the board was deeply involved in the outcome of Custodia's key account application. This level of involvement is inconsistent with the idea of unfettered Reserve Bank discretion. “Page 54 of Custodia’s December 22, 2023 brief of the ruling as a matter of law.
While we await further information, it seems clear that any voluntary concession on the part of the government here reveals a combination of a perception that they have demonstrated either clear incompetence, or that this finding will have a significant and undue impact on the process.
This is a guest post by Colin Crossman. The opinions expressed are entirely their own and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
