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Illustration: Jeremy Bezanger / Unsplash

The CIA has its eyes on crypto

Protocol Fintech

Hello and welcome to Protocol | Fintech! This Friday: the CIA and crypto, the rise of neobanks and two Blocks on the block.

Crypto intelligence

A quirky conspiracy theory claims cryptocurrencies are actually a CIA project and that Satoshi Nakamoto, bitcoin’s fabled creator, is a secret agent. CIA Director William Burns didn’t help put any wild rumors to rest when he disclosed publicly last week that the spy agency has “set in motion a number of different projects focused on cryptocurrency.”

That the CIA boss would make such a cryptic disclosure in public is puzzling, as it “created a whirlwind of speculation,” Kudelski Security CEO Andrew Howard told Protocol.

But the picture Burns painted doesn’t require a web of photos on a pinboard: Crypto-related crime is rising and the feds need to ramp up their response.

“It’s an important priority,” Burns said. The CIA must pay attention to the growth of crypto and crypto-related crimes “because they’re going to have an enormous impact.”

  • The spike in ransomware attacks is the most obvious example. Stopping these operations means being able to pinpoint the “financial networks that so many of those criminal groups use as well,” Burns said.
  • And the CIA is looking to work with “our colleagues and other parts of the U.S. government to provide solid intelligence on what we're seeing as well.”
  • In June, the Justice Department recovered $2.3 million in bitcoin ransom paid to DarkSide, the criminal group that hacked Colonial Pipeline. In October, the DOJ said it was forming a team to focus exclusively on crypto crimes.
  • The fed crackdown has led to an unusual problem: where to store seized digital assets. That led the U.S. Marshals to sign a deal with Anchorage Digital, which stores and manages crypto assets for institutions.

The crypto industry likes to wave away digital cash’s role in money laundering. Security experts disagree.

  • The feds are targeting “a big pipeline for money laundering,” Ian McShane, field chief technology officer at IT security firm Arctic Wolf, told Protocol.
  • It’s a huge challenge to try to stay ahead of what has become “a dependable monetization scheme for attackers,” Howard of Kudelski Security said. “It is not surprising that our nation’s spy agency is staying close to this.”
  • On Thursday, Chainalysis reported that crypto scammers managed to steal about $8 billion this year, an 81% jump from last year. Trend Micro also warned of more crypto-related attacks aimed at corporate cloud infrastructures next year.
  • And as crypto-related threats grow, so does the need for reliable intel to help agencies like the CIA, the NSA and the ATF find ways to “triangulate threat actors and nation-states based on the payment addresses and crypto wallets,” McShane said.

It’s an intelligence challenge tailored for the CIA. Long before bitcoin existed, the CIA was prowling the internet looking for mentions of “DigiCash.” Klaros co-founder Adam Shapiro cited the agency’s “historic focus on new technologies” — including one that some speculate it created — as an asset. “I hope they still have the private keys for all the coins they mined in the early years,” Shapiro quipped.

— Ben Pimentel


Tezos is a self-upgradable and energy-efficient Proof of Stake blockchain with a proven record of security and scalability. In 2021, Tezos recorded over 50 million transactions with a carbon footprint of just 17 individuals. Seamlessly adopting innovations without disruption, Tezos is designed to evolve and built to empower.

Learn more

From Protocol | Fintech

Katie Haun is leaving a16z. The co-founder of Andreessen Horowitz’s crypto funds is launching her own firm.

H&R Block sued Block over its name change. The tax-prep firm hit the company formerly known Square with a trademark infringement suit.

Lendtable wants to help max out your 401(k)s. The fintech startup offers employees a way to take advantage of employer match programs for retirement savings.


“At Coinbase, we want to help pull all the pieces of identity together — essentially creating an identity on-ramp into the Metaverse.”Brian Armstrong, Coinbase CEO, and Alex Reeve, Coinbase’s identity product lead, on the crypto exchange’s work with ENS, the Ethereum Name Service.

“DeFi is the most dangerous part of the crypto world. This is where the regulation is effectively absent, and — no surprise — it’s where the scammers and the cheats and the swindlers mix among part-time investors and first-time crypto traders. In DeFi, someone can’t even tell if they’re dealing with a terrorist.” Sen. Elizabeth Warren, at a Senate banking committee hearing on stablecoins.

“Weaknesses in how banks identify, measure, monitor and control the potential physical and transition risks associated with a changing climate could adversely affect a bank’s safety and soundness, as well as the overall financial system.”Office of the Comptroller of the Currency, in draft guidelines advising banks to protect themselves from climate risk.

Three questions with … Anabel Perez, CEO, NovoPayment

What fintech trend are you most excited about? (besides your own sector):

Niche neobanks are especially interesting to watch as we see financial products come to market that are increasingly personalized. There are mortgages specifically for remote workers, brokerage accounts tailored to clients’ interests and investment needs, ESG and sustainability-focused neobanks and even neobanks created to support historically marginalized groups that have faced discrimination in the traditional banking system. Just this year, three major neobanks have launched around that idea.

There is Greenwood, a mission-driven neobank that is working toward socio economic parity for the Black and Latinx communities; Majority, a neobank designed to mitigate the financial and confusion immigrants face when new to the U.S. through education and easy-to-use financial products; and most recently, Daylight, the first digital bank for LGBTQ+ clients. To me, fintech is about improving access to financial services through technology, and the hyper-personalization we see taking place in the niche neobank space is a prime example of that in action.

What fintech trend is most troubling for you?

Part of what is so exciting about the fintech space is the breakneck speed at which we innovate and create new products, but the downside is the pressure to be the first, which leaves us with the ultimate reality that products and businesses go to market without the necessary foundation. Recently, I’ve seen far too many fintechs, hoping to be competitive, offer services they know are popular but are not equipped to provide. This is especially common around services that require regulatory measures in place. And I get it, it’s not fun, it’s not sexy, but financial transparency, deposit insurance, data privacy and data integrity could all be compromised without proper compliance, not to mention the expense of eventually getting up to code.

What's been your biggest professional blunder and how did it help you?

My company is part of a movement to define an industry vertical (banking as a service), so there are a lot of unknowns we come up against, especially operating in 14 markets across the U.S. and Latin America. There is a lot of local knowledge to factor in that is specific to running a successful BaaS business. Regulations, certifications, economic climates, accessibility, technological maturation, consumer temperatures — these are all examples of invisible barriers I came up against when I first started out. I wish I had more local mentorship when we were first expanding the business and entering new markets. That was an important lesson to learn early on and thankfully, have transferred this knowledge to our team as we scale operations today.

Need to know

Bitwise launched an index fund to track NFTs. The fund will buy and hold in custody CryptoPunks, Bored Apes and CyberKongz.

Chief revenue officer at Celsius reportedly had a side business with a convicted money launderer. Roni Cohen-Pavon is the second executive at the crypto lender connected to the investigation, according to the Times of Israel.

Making moves

Amrita Ahuja joins Airbnb’s board. The Block CFO has her own compelling personal story.

Deal flow

Anchorage raised $350 million. The crypto custodian’s round was provided by KKR, Goldman Sachs and others.

Dune Analytics is reportedly raising at a $1 billion valuation. The startup raised an $8 million Series A just four months ago.


Tezos is a self-upgradable and energy-efficient Proof of Stake blockchain with a proven record of security and scalability. In 2021, Tezos recorded over 50 million transactions with a carbon footprint of just 17 individuals. Seamlessly adopting innovations without disruption, Tezos is designed to evolve and built to empower.

Learn more

Thanks for reading — see you Tuesday.
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