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Hands off our crypto


Good morning! Did anyone else stay up way too late last night reading Jon Ossoff's hilarious old tweets? Turns out the internet is good sometimes. Anyway, this Wednesday, tech is up in arms about proposed crypto regulations, a look inside the future of banking, the latest on the SolarWinds hack and why Satya Nadella wants Microsoft to be WeChat.

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The Big Story

The crypto world fights the regulators

Over the last couple of days, voices from every corner of the tech industry have come out to talk about proposed new FinCEN regulation on cryptocurrency.

  • Quick catch-up: The proposed rules would require crypto exchanges to collect and store (and potentially turn over) personal information about any customer buying or selling large amounts of cryptocurrency. They're meant to close "anti-money laundering regulatory gaps," and cite national security issues.

Responses from tech folks all say basically the same thing: that the government is way overstepping its bounds, in the sketchiest way possible.

  • "Instead of bolstering the fight against unlawful activity," Jack Dorsey wrote, "this Proposal will have the unintended consequence of driving cryptocurrency activity to unregulated corners and thereby undermine law enforcement's efforts to combat illicit activity."
  • Brian Armstrong called it "a substantial intrusion into your privacy without good reason — and a significantly more onerous regulation than traditional financial institutions are held to."
  • There's more, but you get the idea.

To understand what's at stake, I called Marta Belcher, a leading blockchain attorney and a counsel to the EFF. (She also wrote a scathing comment on the FinCEN proposal.)

  • The thing about collecting people's names and addresses, Belcher said, is that it immediately tells you everything about them: "If you have someone's wallet address, and you know their identity, you can see all the transactions they've ever had using that address."
  • Even worse, exchanges would have to collect that information on anyone who transacts with those wallets. It's kind of like telling Facebook it can have your information, and then it collects everything from your friends and friends of friends as well. When Cambridge Analytica did that, people weren't happy.
  • This proposal goes beyond the already intense surveillance placed on other financial systems, Belcher told me. And it puts a lot of really sensitive digital data into the government's hands, just when the SolarWinds debacle suggests that … might not be a great idea.

Part of the problem is procedural: The government tried to ram this through quickly and without anybody noticing. (Whoops.) But it also seems to violate the whole spirit of cryptocurrency, a system built to not require trust or external oversight. It's still possible the rules will pass — who knows at this point, during the last days of the Trump administration — but Belcher said at least she's happy to see the whole community up in arms.


Bank lines are so 2019

It wasn't just big department stores and local businesses that had to change everything about how they operate this year: banks were hit hard, too. All of that new ecommerce meant a huge boom in online banking, and a serious problem for physical bank locations.

Northwestern Mutual CIO Neal Sample spoke to Protocol about how banks responded as part of our latest manual, the Reinvention of Spending. Sample had a few big takeaways from last year. Long story short: It's all about the cloud.

  • Banks have some of the oldest legacy systems of basically every industry. That makes cloud migration extremely difficult. "We're living in a tale of two cities right now," Sample said. "It's not a solved problem yet."
  • But there are a few legacy systems that actually would be made worse by a cloud transition, according to Sample. Pharmacy and credit transactions require extremely stable real-time processing that doesn't translate well to the cloud. "It's not like loading a web page. It requires fixed transactional integrity. And those were kinds of problems for which a mainframe is the perfect tool, not just a tool that is good enough," he said.

Other stories in this month's manual explore the post-pandemic future of consumer finance, ranging from banks to home-buying to online shopping.

  • Mike Murphy looked at how Jiko's acquisition of Mid-Central National Bank could change the way people store their money, using fractions of U.S. Treasury bills to earn interest in their accounts.
  • Home-sellers have turned to Zillow, Redfin and Opendoor to list their houses in order to avoid coronavirus transmission from the traditional real estate process, Hirsh Chitkara found, in a look at the rise of "iBuyers." (As someone hoping to buy a house this year, this was … not an encouraging read.)
  • The rest of the Manual has examined how eBay improved checking out, why people are flocking to PayPal and whether warranties could be the next point-of-sale trend. You can follow along here for the remainder of the stories as they come online this week.


It was Russia!*


After weeks of investigation, the U.S. intelligence community still doesn't know exactly what happened in the SolarWinds hack, but it's increasingly sure it was "likely Russian in origin."

  • "At this time, we believe this was, and continues to be, an intelligence gathering effort," a statement, signed by four intelligence agencies, explained. "We are taking all necessary steps to understand the full scope of this campaign and respond accordingly."
  • Of the 18,000 affected SolarWinds customers, "a much smaller number has been compromised," including "fewer than 10 U.S. government agencies." That's one way of framing it. Another is that those are still big numbers.
  • The importance of it being determined to be an "intelligence gathering effort" is, per the NYT, that the investigation may not have found any evidence that hackers planted malware or intended to cause any specific problems.

We still don't know the full extent of what happened here, or really what can be done about it. But even as Trump has tried to downplay the incident — and Russia's involvement — the truth is becoming a little more clear.



Virtualized service business models previously on the horizon waiting for consumer habits to catch up have accelerated at break-neck speed. And consumers are tapping their feet, waiting for more. Now, think about the dilemma that consumers are faced with going into this tax season. Because of the pandemic, many tax situations seem more complex and are sparking questions never before imagined.

Read more

People Are Talking

Forget beating Slack. Microsoft wants to take on WeChat, Satya Nadella said:

  • "In China, WeChat is the internet, that's a great example. There isn't a western equivalent. If anything, Teams is probably the closest when it comes to the work area."

Snowflake isn't itching to get back to the office, Frank Slootman said:

  • "This whole notion that the office is your workday home, we realize that is nonsense. Offices ... need to be there for specific purposes — for events, for training, for meetings, specifically — but not a place to hang out 9 to 5."

VMware has 30 big goals for 2021, but COO Sanjay Poonen said diversity tops the list:

  • " We're committed to having 50% of our managers be women. We want to hire one woman for every male that we hire, and really see a more diverse workforce with underrepresented minorities and women."

Making Moves

Gary Cohn is IBM's new vice chairman. He was previously Trump's chief economic advisor and head of the NEC.

Steve Mollenkopf is leaving Qualcomm in June. He'll be replaced as CEO by Cristiano Amon, who is currently the company's president.

David Recordon is Biden's White House director of technology. He was director of IT in the Obama administration and most recently worked for the Chan Zuckerberg Initiative.

Monica Lozano is joining Apple's board. She's also on the board at Target and Bank of America, and is president and CEO of the College Futures Foundation.

Sarah Franklin is the new CMO at Salesforce. She replaces Stephanie Buscemi, who is leaving after three years in the role.

Cameo hired basically a whole new executive team: Rob Post is the new CTO, Deb Schwartz is CFO, Brian Frank is COO, and Melanie Steinbach is chief people officer. Clearly, Cameo continues to boom.

In Other News

  • Amazon bought 11 Boeing 767-300s from Delta and WestJet. It's the first time it's bought cargo planes, rather than leasing them.
  • Apple executive bonuses will now depend on their ESG performance. The company said the cash bonuses would be modified by up to 10% in either direction "based on Apple Values."
  • Trump banned U.S. transactions with Alipay, QQ Wallet, WeChat Pay and five other Chinese apps. The order comes into effect after Biden takes office, though the Commerce Department reportedly plans to identify prohibited transactions before Jan. 20.
  • Chinese regulators want Ant to share consumer credit data with the nation's central bank, according to The Wall Street Journal, with regulators reportedly concerned that Ant has a data monopoly.
  • It's not all bad news for Jack Ma though: turns out he might not be missing, but just "laying low." And Alibaba, his other company, is reportedly set to raise up to $8 billion in a bond sale.
  • The NYSE might change its mind again on the China telecom delistings. Treasury Secretary Mnuchin reportedly called NYSE President Stacey Cunningham yesterday to complain about the exchange's abrupt decision to not delist the three Chinese companies.
  • OpenAI released DALL·E, which can generate images from text captions. Check it out if you want to see GPT-3's excellent attempt at visualizing "a snail with the texture of a harp."
  • A close look at a union-quashing firm hired by Google describes how it gathers information on its clients' employees. When trying to stop a union drive at two Seattle hospitals, IRI Consultants collected information on employees' personality type, temperament and motivations.
  • Rivian might raise at a $25 billion valuation, Bloomberg reports. The electric vehicle company has already raised $6 billion from investors including Amazon and Ford.

One More Thing


I can't be the only one who thought this thread — lamenting the end of a toothbrush-sharing startup called BITE — was real at first, right? Honestly, I'm still only like half sure it's not real. Either way, now that it's gone viral, I assume it'll be a well-funded startup before long.



Virtualized service business models previously on the horizon waiting for consumer habits to catch up have accelerated at break-neck speed. And consumers are tapping their feet, waiting for more. Now, think about the dilemma that consumers are faced with going into this tax season. Because of the pandemic, many tax situations seem more complex and are sparking questions never before imagined.

Read more

Today's Source Code was written by David Pierce, with help from Anna Kramer and Shakeel Hashim. Thoughts, questions, tips? Send them to, or our tips line, Enjoy your day; see you tomorrow.

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