BRUSSELS, BELGIUM - FEBRUARY 19: A general view of the European Union Commission headquarters during the second day of the EU Summit as British Prime Minister David Cameron continues his attempts to negotiate new membership terms for the UK, on February 19, 2016 in Brussels, Belgium. Most of Europe's 28 member state leaders have gathered in Brussels to take part in a crucial summit and vote on British Prime Minister David Cameron's pledge to renegotiate the terms of Britain's membership in the EU, namely proposals to limit benefits for migrant workers. A referendum on whether Great Britain will stay in or leave the European Union is to be held before the end of 2017, though many expect it to take place in June this year. (Photo by Dan Kitwood/Getty Images)
Photo: Dan Kitwood/Getty Images

The EU is ahead of the US in crypto clarity

Protocol Fintech

Good morning, and welcome to Protocol Fintech. This Tuesday: the global race to crypto clarity, PayPal scams, and Affirm’s rewards program.

Off the chain

The crypto world is agog about a filing in Celsius’ bankruptcy case that revealed the identities of thousands of customers, as well as details of their transactions. The most eye-popping fund movements were those of CEO Alex Mashinsky and other executives, but others, used to crypto’s culture of blockchain-enabled secrecy, were wondering why Celsius gave away its customers. The answer may come down to the arcana of bankruptcy law. Providing a list of creditors is standard in bankruptcy filings, and absent regulation, crypto customers are just ordinary creditors who have to line up with others. The Gramm-Leach-Bliley Act provides privacy rules for regulated financial institutions but … well, see “absent regulation.” It’s one more hole that Congress and state lawmakers would be well served to patch as they try to rein in crypto.

— Owen Thomas (email | twitter)

Some rules are better than none

Europe is clearly taking crypto seriously, and moving faster than the U.S. The European Council approved the Markets in Crypto-Assets Regulation, or MiCA, last week; it could become law in 2024. The industry isn’t crazy about all the proposals, some of which rattled crypto leaders when they first came out early this year. But there’s also a prevailing view that finally there’s some regulatory clarity in a key crypto market instead of the fuzzy regime of regulation by enforcement in the U.S.

“A dedicated and harmonized framework is necessary,” the European Council said in the proposal, which lays down rules on different aspects of crypto such as protecting consumers, cracking down on money-laundering, and making sure companies are accountable.

  • Crypto providers will be required to register with EU authorities. They must publish a “crypto-asset white paper” disclosing key information on assets they’re selling, including the “underlying technology” and “related risks.”
  • There will be strict guidelines for stablecoins, a clear reaction to the UST-luna collapse. These include strict capital requirements and rules for stablecoins not pegged to the euro and other EU currencies. Non-euro-linked stablecoins could face restrictions on transaction volume and value.
  • The transaction restrictions could have “severe negative effects,” Blockchain for Europe and the Digital Euro Association said. The trade groups warned in an August statement that they “would expect to see extreme volatility and mass redemptions.”
  • But the rules could also bolster the euro by encouraging euro-linked stablecoins. USDC issuer Circle just launched euro coin, a new stablecoin pegged to the euro.

Imperfect rules are better than none. Crypto is pushing back on key elements of the EU proposals as the European Parliament prepares for a vote on MiCA.

  • Some crypto companies and leaders see MiCA as a positive development for an industry operating largely in the dark. The EU process offers “seemingly pragmatic and sensible regulation,” Bradley Duke, founder and co-CEO of ETC Group, said.
  • It has also “helped dispel the myth that crypto and regulation are incompatible,” said Georgia Quinn, general counsel at Anchorage Digital.
  • Yes, some aspects of MiCA are “contentious and controversial for the crypto community,” said Anto Paroian, executive director and CEO of ARK36, a crypto investment fund, but once it becomes law it will “likely speed up the adoption of cryptocurrencies by providing regulatory clarity and wide customer protections for users and investors” across the EU.

“Crypto needs an air of legitimacy to fulfill what it wants to become,” Klaros Group director Patrick Haggerty told Protocol. The industry is still viewed with suspicion and dread by critics who describe crypto as an unruly frontier. “Being able to finally operate in a region with clear rules is a big step towards legitimacy, “ Haggerty said.

— Benjamin Pimentel (email | twitter)


Today, we expect instant results from our every action, from calling an Uber to ordering a t-shirt. Companies can no longer afford to not adopt technologies like automation. We are now living in the Automation Economy – a new world that requires agility and a complete reimagining of how we work.

Learn more

On the money

Bank of New York Mellon is now accepting crypto. The nation's oldest bank will begin safeguarding digital assets alongside traditional investments, the first large U.S. bank to do so.

Binance has made it harder to trade Helium’s token. The controversial crypto wireless startup’s HNT token can now only be exchanged for BUSD following a critical report about Helium’s business practices and speculation about increased regulatory scrutiny.

JPMorgan Chase says it’s done with screen scraping.The bank said it is now routing all third-party inquiries to access customer data through its API.

"Accidental overpayments," and eight other stories of PayPal scams.Gizmodo dug through Federal Trade Commission filings to detail peer-to-peer payments scams that cost some people big.

Shopify is making some changes after consumer complaints in Europe. The company said it is addressing complaints regulators at the European Union received about shopper safety and fakes.

On Protocol: What is the future of credit cards?

Buy now, get rewards later

Affirm is testing a bonus rewards program for its "buy now, pay later" product, Fast Company confirmed, addressing a major gap between the short-term payment plans and conventional credit cards. CEO Max Levchin first teased the idea in the company's fourth-quarter earnings call in August.

“One of the key preferences driving features of modern consumer payments is rewards,” Levchin said, according to a Seeking Alpha transcript. “It is one of the most common theoretical objections to BNPL versus credit cards. We can stop the debate.”

Affirm’s Debit+ card launched in 2021 and allows customers to split purchases over $100 into installment payments. Affirm also allows customers to use it similarly to a debit card and pay for products with one lump sum deducted from a checking account. Now a beta rewards structure will give customers one point for every dollar paid, though the company told Fast Company that may change as it continues to test the feature. Customers will be able to cash in on points the next time they take out one of Affirm’s loans and receive a discount.

See the full story on

— Veronica Irwin (email | twitter)

Coming up

Sibos 2022 started Monday and runs through Thursday in Amsterdam. The conference, which is organized by SWIFT, focuses on “progressive finance for a changing world.”

Fintech Surge also runs through Thursday in Dubai. The conference is about fintech in the MENA region, with speakers from Mastercard, OneConnect, Rapyd, and more.

Applied Blockchain will report earnings today. Analysis from Zacks Investment Research forecasts APLD’s EPS for the quarter at negative $0.05.

The Digital Transformation in Banking Global Summit is Thursday and Friday in New York City. Speakers from ING, Credit Suisse, Wells Fargo, and more will discuss digitizing banking.

Wells Fargo will report earnings on Thursday. Zacks Investment Research forecasts WFC’s EPS for the quarter at $1.09; it was $1.17 for the same quarter last year.

BlackRock will also report earnings on Thursday. Zacks Investment Research forecasts BLK’s EPS for the quarter at $7.73, against $10.95 for the same quarter last year.

Friday’s the big day for bank earnings: JPMorgan Chase, Morgan Stanley, Citigroup, US Bank and First Republic all report that day. Zacks Investment Research forecasts JPM’s EPS for the quarter at $2.98, where it was $3.74 the same quarter last year. Zacks forecasts MS’s EPS for the quarter at $1.50, versus $2.04 last year. C’s EPS forecast for the quarter is $1.56, down from $2.49 for the same quarter last year. USB’s forecast for the quarter is $1.16, versus $1.30 for the same quarter last year. And FRC’s EPS forecast for the quarter is $2.19, against last year’s reported EPS of $1.91.


Today, we expect instant results from our every action, from calling an Uber to ordering a t-shirt. Companies can no longer afford to not adopt technologies like automation. We are now living in the Automation Economy – a new world that requires agility and a complete reimagining of how we work.

Learn more

Thanks for reading — see you tomorrow! (Programming note: Owen’s on vacation for the next week, so "Off the chain" will return next Tuesday.)

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