States aren’t waiting for the federal government to regulate crypto

While the U.S. waits for a federal framework on crypto regulation, states are taking charge, Coinbase’s head of State and Local Public Policy David London says.

David London, Coinbase's head of State & Local Public Policy

"I think it's good that states are taking charge."

Photo: Coinbase

President Biden’s executive order on crypto punted the issue to agencies for further study. The SEC and CFTC are battling over regulatory turf. David London, Coinbase’s head of State and Local Public Policy, thinks that states aren’t going to wait for a federal framework.

Several states and cities have already put some kind of crypto regulation in place, and others are planning to. There’s New York’s expensive, restrictive BitLicense, Wyoming’s crypto-friendly laws and Miami’s proposal to pay city workers in bitcoin.

London elaborated on his experience working through multiple eras of the web to eventually land at Coinbase, the shape of the local regulatory landscape for crypto and what Biden’s executive order could mean for state legislation in an interview with Protocol.

This interview has been edited for brevity and clarity.

Can you talk a little bit about your prior experience before joining Coinbase, and why you chose to go into policy within tech companies?

I started in public policy in tech in the early 2000s. So literally, I've seen Web 1.0, to 2.0, to 3. I started my career at Cisco Systems and what motivated me getting into tech policy is when during the dot-com era everything was really hot in Silicon Valley. I was working in Maryland for a legislator, and I told him, “Boss, I love you. But I'm moving out to Silicon Valley.”

After that, I headed over to eBay and PayPal, and eventually managed all of eBay's and PayPal's state and local programs across the country. From there, I joined a couple more 2.0 companies, specifically a startup called Ofo, which was in the dockless bike-share space, after I left eBay. Most recently, I was at DoorDash where I headed up U.S. East and Canada, and also started its federal program as well.

So I've always been interested in fast-growing companies and companies that were sort of cutting edge, which brings me to my current position with Coinbase. So going from 1.0 to 3, this was like the best match for me moving forward. And I think the things that we're doing, and working with policymakers, I think it's going to be really life-changing, not just here in the U.S. but across the world.

What made you jump into the crypto industry from DoorDash?

There's the opportunity to really do economic empowerment. When I was first researching Coinbase, in the crypto space, maybe about six or seven months ago, I was really intrigued with the opportunities that lie before this industry, specifically around economic empowerment, by allowing individuals to be more empowered for themselves and for their communities, lifting up all boats.

So if you're thinking about something as simple as remittances, if you have relatives abroad, can crypto be that sort of new phase for you to get money to your relatives? Similarly, here, getting access to credit, getting access to capital, for some of the communities in the United States, I see crypto as also being one of those potential avenues for them as well.

It’s a lot of green space, which was really cool with DoorDash, we were doing some really cool stuff trying to educate policymakers. But after [California’s Prop. 22 was] out there, people's minds were kind of already made up about the industry. What I love here, people are so open-minded at this point, a lot of policymakers want to figure out what it is. What is this crypto thing? What is this blockchain thing? They're coming to us to educate them and trade ideas, so that's what's really exciting about this, is there's so much green space to work with policymakers across the country.

With DoorDash and the gig economy, labor is more regulated on the state and local levels. With crypto so far, federal legislation has taken the spotlight. What are your thoughts on the importance of state legislation within the crypto space right now?

I mean, we would love to have a solid federal framework that harmonizes, that's consistent and that makes sense for the industry moving forward.

But in lieu of that, what we have seen is that states are just going to do their own thing, and not just states, but also localities. We're literally tracking legislation all across the country, and seeing that states are putting policy proposals forward, in lieu of federal action.

So I think it's good that states are taking charge. What I really like and what I've seen from a lot of states is that they're really doing it in a very methodical way. That they're looking at the industry, they're looking at: How can crypto benefit their communities? What are some of the safeguards that they need to put up for their constituents? What are some of the things that the industry is looking for? And can industry be a partner with them?

So I think what I've liked, in my short time here, is that I've seen policymakers proactively come to us and ask me, “Hey, what is crypto? How do we get behind this? How do we protect our consumers? How do we make sure that the individuals that use it are successful?”

New York has its coveted BitLicense, and certain states are friendlier than others towards crypto. How do you think that affects the crypto industry and how Coinbase operates?

We're regulated, and we have money transmitter licenses in over 40 states in the United States. So we move forward to the states that we operate in, which is most of the states based upon that. And we're able to understand what the laws are, we work with our regulatory team in getting a good sense of sort of what is the regulatory landscape in an individual state, and we engage at that point. We have very close relationships with regulators in the states that we operate in.

Now, obviously, having multiple states with different licenses, one size doesn't fit all for every state, but one of the things that we have seen is most of them are pretty consistent, generally speaking. What we really love is that the regulators are really good to work with and we have good opportunities to engage with them.

Do you have any thoughts on Biden's executive order and how that might impact state legislation with a more federal framework down the line?

I think the executive order is, as we always have to remember, it's the first step in a much larger process. We applaud the administration for leaning into the issue and, and wanting to bring in industry and to go through the process and see what makes sense from a federal perspective on regulation of our industry.

But in lieu of that, as I mentioned before, the states aren't waiting. It wouldn't surprise me if you start seeing more states introduce things themselves to lean more into crypto in the coming months and years. So I think that's really positive.

There’s also tons of smaller cities that are looking to get into the crypto space. And so I think these are like incubators of innovation across the country.

Also, it's not like a red issue or a blue issue. A lot of times in our industry, people line up on one side of the aisle or the other side of the aisle. What I really love about this industry is it's really bipartisan; we have folks on both sides of the aisle, whether they be far to the left or far to the right, and tons in the middle, that like crypto and want to understand what it is and the benefits of it for their community.


Judge Zia Faruqui is trying to teach you crypto, one ‘SNL’ reference at a time

His decisions on major cryptocurrency cases have quoted "The Big Lebowski," "SNL," and "Dr. Strangelove." That’s because he wants you — yes, you — to read them.

The ways Zia Faruqui (right) has weighed on cases that have come before him can give lawyers clues as to what legal frameworks will pass muster.

Photo: Carolyn Van Houten/The Washington Post via Getty Images

“Cryptocurrency and related software analytics tools are ‘The wave of the future, Dude. One hundred percent electronic.’”

That’s not a quote from "The Big Lebowski" — at least, not directly. It’s a quote from a Washington, D.C., district court memorandum opinion on the role cryptocurrency analytics tools can play in government investigations. The author is Magistrate Judge Zia Faruqui.

Keep ReadingShow less
Veronica Irwin

Veronica Irwin (@vronirwin) is a San Francisco-based reporter at Protocol covering fintech. Previously she was at the San Francisco Examiner, covering tech from a hyper-local angle. Before that, her byline was featured in SF Weekly, The Nation, Techworker, Ms. Magazine and The Frisc.

The financial technology transformation is driving competition, creating consumer choice, and shaping the future of finance. Hear from seven fintech leaders who are reshaping the future of finance, and join the inaugural Financial Technology Association Fintech Summit to learn more.

Keep ReadingShow less
The Financial Technology Association (FTA) represents industry leaders shaping the future of finance. We champion the power of technology-centered financial services and advocate for the modernization of financial regulation to support inclusion and responsible innovation.

AWS CEO: The cloud isn’t just about technology

As AWS preps for its annual re:Invent conference, Adam Selipsky talks product strategy, support for hybrid environments, and the value of the cloud in uncertain economic times.

Photo: Noah Berger/Getty Images for Amazon Web Services

AWS is gearing up for re:Invent, its annual cloud computing conference where announcements this year are expected to focus on its end-to-end data strategy and delivering new industry-specific services.

It will be the second re:Invent with CEO Adam Selipsky as leader of the industry’s largest cloud provider after his return last year to AWS from data visualization company Tableau Software.

Keep ReadingShow less
Donna Goodison

Donna Goodison (@dgoodison) is Protocol's senior reporter focusing on enterprise infrastructure technology, from the 'Big 3' cloud computing providers to data centers. She previously covered the public cloud at CRN after 15 years as a business reporter for the Boston Herald. Based in Massachusetts, she also has worked as a Boston Globe freelancer, business reporter at the Boston Business Journal and real estate reporter at Banker & Tradesman after toiling at weekly newspapers.

Image: Protocol

We launched Protocol in February 2020 to cover the evolving power center of tech. It is with deep sadness that just under three years later, we are winding down the publication.

As of today, we will not publish any more stories. All of our newsletters, apart from our flagship, Source Code, will no longer be sent. Source Code will be published and sent for the next few weeks, but it will also close down in December.

Keep ReadingShow less
Bennett Richardson

Bennett Richardson ( @bennettrich) is the president of Protocol. Prior to joining Protocol in 2019, Bennett was executive director of global strategic partnerships at POLITICO, where he led strategic growth efforts including POLITICO's European expansion in Brussels and POLITICO's creative agency POLITICO Focus during his six years with the company. Prior to POLITICO, Bennett was co-founder and CMO of Hinge, the mobile dating company recently acquired by Match Group. Bennett began his career in digital and social brand marketing working with major brands across tech, energy, and health care at leading marketing and communications agencies including Edelman and GMMB. Bennett is originally from Portland, Maine, and received his bachelor's degree from Colgate University.


Why large enterprises struggle to find suitable platforms for MLops

As companies expand their use of AI beyond running just a few machine learning models, and as larger enterprises go from deploying hundreds of models to thousands and even millions of models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

As companies expand their use of AI beyond running just a few machine learning models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

Photo: artpartner-images via Getty Images

On any given day, Lily AI runs hundreds of machine learning models using computer vision and natural language processing that are customized for its retail and ecommerce clients to make website product recommendations, forecast demand, and plan merchandising. But this spring when the company was in the market for a machine learning operations platform to manage its expanding model roster, it wasn’t easy to find a suitable off-the-shelf system that could handle such a large number of models in deployment while also meeting other criteria.

Some MLops platforms are not well-suited for maintaining even more than 10 machine learning models when it comes to keeping track of data, navigating their user interfaces, or reporting capabilities, Matthew Nokleby, machine learning manager for Lily AI’s product intelligence team, told Protocol earlier this year. “The duct tape starts to show,” he said.

Keep ReadingShow less
Kate Kaye

Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of and is the author of "Campaign '08: A Turning Point for Digital Media," a book about how the 2008 presidential campaigns used digital media and data.

Latest Stories