Biden in the B of a bitcoin
Photo illustration: Drew Angerer/Getty Images; Protocol

Biden’s crypto order resets the regulatory debate

Protocol Fintech

Good morning, and welcome to Protocol Fintech. This Thursday: Biden’s no Crypto Joe, LeBron James gets airdropped, and Kraken gives to Ukraine.

Off the chain

Sanctions are now touching the crypto business. CoinZoom has stopped signing up Russian customers — not because crypto transactions are officially blocked, but because existing sanctions make funding accounts with wires or credit cards difficult, CEO Todd Crosland told Reuters. Meanwhile, the EU has made clear that its sanctions program includes digital assets too. It’s a reminder that crypto might have been conceived of as a replacement for fiat money, but its path to the mainstream is all about coexisting with it.

— Owen Thomas (email | twitter)

Crypto Joe? More like Regulatory Process Joe.

President Biden’s executive order on crypto got rave reviews from key players in the digital assets industry. But calling him Crypto Joe may be premature.

Crypto execs and leaders called the order a milestone for a set of companies that have long complained that the federal government doesn’t take them seriously — or worse, is just plain out to get them.

Meanwhile, administration officials, including key regulators, said they’re prepared to follow Biden’s lead in defending against the dark side of crypto: risks to financial stability, investor safety, national security and law and order.

There’s something for everyone in Biden’s crypto order, and what you see in it largely depends on where you stand.

Crypto thinks this means the White House finally gets it. Biden gave the industry the head-pat it has long been waiting for.

  • “First and foremost, this is an affirmation that crypto is here to stay,” Ripple CEO Brad Garlinghouse tweeted.
  • Coinbase Chief Policy Officer Faryar Shirzad said “digital assets are now widely embraced by millions and there's growing interest in it from officials across government. Today, the White House has confirmed they know this too.”
  • Garlinghouse echoed that point, saying the White House “finally” said “what we and the industry have been saying for years — if the U.S. wants to maintain its status as a responsible tech leader, it needs to provide a clear regulatory framework for an industry that’s exploding in growth.”

Will crypto and regulators finally get along? Peace breaking out between Silicon Valley and D.C. wasn’t immediately evident from key regulators’ reactions.

  • The regulators made it clear they’re prepared to work … with other regulators. Gary Gensler said he looked forward to “collaborating with colleagues across the government” to focus on “protecting investors and consumers, guarding against illicit activity and helping ensure financial stability.”
  • Rohit Chopra said the CFPB will work “with partners across the government” to take on a technology that has “created profound implications for financial stability, consumer protection, national security and energy demand.”
  • Gensler is not exactly a popular figure in the crypto world. Garlinghouse, whose company is locked in a legal battle with the SEC, also hit back at “years of damage done by the SEC’s siloed regulation by enforcement approach.”

So what’s the order really about? There’s a strong status quo element of working with the existing architecture of government and policy to bring crypto into the fold.

  • The Biden order didn’t address a key request from the crypto industry: rationalizing the multiple agencies weighing in on crypto regulations. Rep. Don Beyer, who introduced a crypto regulation bill last year, called this out in a statement: “The order does not clearly delineate regulatory responsibility between the SEC and the CFTC.” He also noted that the order didn’t specifically address stablecoins.
  • “It would have been good to acknowledge the big elephant in the room … which is the presence of competing definitions and competing jurisdictions for regulatory oversight,” Gartner Vice President Avivah Litan told me.
  • The order is best thought of as “directing agencies to study the crypto industry in a more methodical and coordinated approach” instead of relying on “a patchwork of rules,” Kristin Smith, executive director of the Blockchain Association, said. In other words, it will take time, and a lot of process.
  • One concern: The Biden order might give regulators too much leeway. The mandate to protect U.S. and global financial stability could be a “catch-all for regulators” and “a very broad tool” to slow down crypto’s growth while avoiding “political pushback,” said Bradley Tusk, co-founder and managing partner at Tusk Ventures.

Hoping for an era of good feelings in crypto may be wishful thinking. Still, Biden’s crypto order could help reset the raging debates over crypto by reminding everyone of what’s at stake. But the heated debates over how to regulate crypto will likely continue. “I am confident this announcement is not the welcome mat that crypto thinks it is,” Santa Clara University law professor Stephen Diamond told me.

— Ben Pimentel (email | twitter)


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On the money

Coinbase wasn’t the only one with a Super Bowl QR code.’s Super Bowl commercial had a hidden QR code that linked to a secret web page offering a chance to win limited-edition LeBron James NFTs. It just airdropped 5,550 of the artworks to fans.

The EU clarified that Russian and Belarusian sanctions include crypto assets. The European Commission stated that crypto assets fall under the scope of “transferable securities,” and are therefore subject to sanctions.

Dubai created a regulatory and licensing authority for digital assets. The independent authority was established under the country’s new virtual assets law, and will oversee the development of digital assets while ensuring transparency and security for investors.

The U.S. Treasury is launching a crypto education campaign. The initiative aims to raise awareness around the risks of investing in cryptocurrencies and crypto assets, as well as how crypto differs from existing financial products.

Kraken is distributing over $10 million to Ukrainian clients. Ukrainian clients with a Kraken account before March 9 will be eligible to receive $1,000 in bitcoin, with part of the aid package funded by the total trading fees paid by Russian clients in the first half of 2022. Kraken CEO Jesse Powell has rejected calls to freeze Russian citizens’ accounts.

BitMEX co-founder Samuel Reed pleaded guilty to Bank Secrecy Act violations. Reed joined his co-founders in paying fines of $10 million apiece for failing to adhere to anti-money laundering laws in operating the crypto exchange.


Ukraine’s digital transformation minister, Alex Bornyakov, said crypto has helped tremendously with military aid and relief due to its efficiency. “With crypto, we can do those transactions in five minutes, in 10 minutes, and you don't have to get that approval through banks,” he said in a Twitter Spaces chat hosted by KRH Partners Chief Marketing Officer Rachael Horwitz.

Real Vision CEO Raoul Pal thinks that the Russian invasion of Ukraine has other implications, including accelerating the adoption of CBDCs. Even though it looked like a very smart move to weaponize reserves and the financial system, what is actually happening is you are now forcing the dedollarization of the world,” he said in a video.

Bill Gates wants everyone who has less money than Elon Musk (which is everyone) to be careful with bitcoin. “I do think people get brought into these manias who may not have as much money to spare, so I'm not bullish on bitcoin. If you have less money than Elon, you should probably watch out,” he said in a resurfaced 2021 interview with Bloomberg Technology that’s been making the rounds.

Moves and hires

Citigroup is hiring a new chief compliance officer. Mary McNiff, the current chief compliance officer, will remain in the role until later this year, when she will move to another role within Citi. McNiff currently reports to Brent McIntosh, general counsel, as the new hire is also expected to do.

Coinbase hired David London as its head of State Public Policy. London previously held government affairs executive roles at DoorDash, eBay and Cisco.


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