Rosie Gillam

Brett Philbin

<div id="highlights-block_62322eeef308b" class="highlights">
 <ul>
 <li>A recent Edelman survey of more than 1,000 retail investors found that 44% of respondents would prefer to buy cryptocurrency from their bank as opposed to another fintech provider</li>
 <li>Security, customer education and regulatory conversation should be top priority for fintechs</li>
 </ul>
 
</div>



As the cryptocurrency market navigates questions regarding its role in the geopolitical and humanitarian crises unfolding in Ukraine, another challenge has emerged for the industry in the US on the regulatory front.



The Biden administration’s <a href="https://cms.blockworks.co/bidens-crypto-executive-order-may-be-watershed-moment-despite-lack-of-specifics/" target="_blank" rel="noreferrer noopener">executive order</a> released last week, which directs the Treasury Department and other agencies to develop crypto policy recommendations, has introduced some degree of clarity and priorities as a regulatory framework is now being developed. At the same time, however, there is also fresh uncertainty as investors now must await new guidance that will likely impact the very firms they utilize for buying and selling bitcoin and other cryptocurrencies.



The threat of more stringent regulation has been bubbling for months and has already been worrying investors who are now being courted by not only crypto startups, but by Wall Street’s biggest banks and brokerages, which have rolled out solutions aimed at helping them manage their digital currency.



Indeed, with the prospect of more regulation on the horizon, a recent Edelman survey of more than 1,000 retail investors found that close to half (44%) of respondents would prefer to buy cryptocurrency from their bank as opposed to another fintech provider, such as an exchange. Moreover, nearly half (49%) of the retail investors surveyed believe that the crypto market needs additional regulation, with Gen Z (71%) and Baby Boomers (86%) having the strongest opinions on the matter. 



Within this backdrop, traditional finance, which has a long history of adapting to regulatory changes, is seemingly gaining momentum as a trusted provider of specialized crypto products and services. But there are several ways the crypto industry can close the gap and bounce back from this latest challenge.



<ul class="wp-block-list"><li>Make governance and security even more of a top priority. While the <a href="https://cms.blockworks.co/couple-arrested-as-government-recovers-3-6b-in-stolen-bitcoin/" target="_blank" rel="noreferrer noopener">recovery of stolen bitcoin</a> is reassuring to concerned investors, these instances underscore the need for firms to have strong contingency plans in place. Establish a dialogue early and often with customers about the specific security and compliance protocols that have been implemented. </li></ul>



<ul class="wp-block-list"><li>Don’t take education for granted. The retail boom has meant an influx of emerging market participants, many of whom are not well versed in crypto market structure. Meanwhile, some sophisticated investors have only just begun to add bitcoin to their portfolios. Offering webinars, market data and informed commentary, particularly in periods of market turmoil, is the surest way to remain in these customers’ good graces.</li></ul>



<ul class="wp-block-list"><li>Ensure that you have the right team in place. While crypto firms are often led by tech savvy entrepreneurs with disruptive ideas, assembling a dedicated team with specialized expertise is essential. Blend innovators with those that have the appropriate credentials. If you’re marketing to institutional investors, for instance, hiring Wall Street professionals is the best way to ensure that you understand your audience, are developing products (and those who know how to secure necessary approvals) that will meet their needs and have the skillset necessary for your offerings to achieve critical mass.</li></ul>



<ul class="wp-block-list"><li>Be a part of the regulatory conversation. For crypto firms, it’s critical to develop relationships with Beltway Influencers and engage directly with government officials before speaking publicly and to the press on key issues. Advocate publicly to enhance — not initiate — your business agenda. Be sure your customers know where you stand on regulation — engage them on the channels they care about the most. Doing so thoughtfully and proactively just might keep these important stakeholders from jumping ship.</li></ul>



With new regulation on the horizon and legacy financial institutions digging deeper into crypto, the industry must act now to proactively maintain its standing at the forefront of innovation and build trust with customers. If digital assets are to continue gaining broader acceptance, taking these measures must become a business priority.



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Biden

The Crypto Conundrum: How Fintechs Can Close the Trust Gap With More Regulation Brewing

Luke Conway

<div id="highlights-block_61e889eac96b6" class="highlights">
 <ul>
 <li>Language in the EU&#8217;s Markets in Crypto Assets bill that would effectively ban crypto mining was removed Monday</li>
 <li>US officials claim that Russia has asked China for military aid, heightening geopolitical tension and pulling equity markets down</li>
 </ul>
 
</div>



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Bitcoin and other cryptocurrencies pushed higher Monday as the European Union nixed a regulatory measure that would have effectively banned crypto mining. 



The section — which would broadly regulate the digital assets space — was removed from the Markets in Crypto Assets (MiCA) bill Monday. It quieted the concerns of industry participants who have protested the measure since it was <a href="https://cms.blockworks.co/eus-crypto-bill-mica-heads-to-a-monday-vote-without-proof-of-work-ban/" target="_blank" rel="noreferrer noopener">introduced</a> by the EU in 2020.



The removal boosted markets even as equities fell on the day. Bitcoin climbed 2.85%, while ether rose 1.14% by the end of stock trading. 



Stefan Berger, a member of the European Parliament from Germany, said proof-of-work crypto mining was no longer included in MiCA.



"In view of the important debate about sustainability, my suggestion is to include crypto assets, like all other financial products, in the <a href="https://twitter.com/hashtag/Taxonomie?src=hashtag_click" target="_blank" rel="noreferrer noopener">#Taxonomie</a> area," Berger said. "An independent discussion of the Proof-of-Work is no longer planned in <a href="https://twitter.com/hashtag/MiCA?src=hashtag_click" target="_blank" rel="noreferrer noopener">#MiCA</a>."



THORchain, a decentralized liquidity protocol, was again crypto’s biggest gainer of the day among the top 100 coins by market capitalization, with an 11.61% gain. 


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Equities struggled Monday after reports emerged that Russia had asked China for military aid in its efforts in Ukraine. White House National Security Advisor Jake Sullivan <a href="https://www.cnn.com/2022/03/13/politics/jake-sullivan-meeting-chinese-counterpart-ukraine/index.html" target="_blank" rel="noreferrer noopener">said</a> Sunday that the US is "watching closely to see the extent to which China actually does provide any form of support, material support or economic support, to Russia."



The growing geopolitical tension has continued to add uncertainty to the stock market, causing high volatility. The S&amp;P 500 fell by another 0.74% Monday, while the Nasdaq fell 1.92%. The Dow remained flat. 


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<h3 class="wp-block-heading">Top stories</h3>



<a href="https://cms.blockworks.co/illinois-moves-closer-to-accepting-crypto-for-taxes-but-not-considering-legal-tender-status/" target="_blank" rel="noreferrer noopener">Story</a>: Illinois Moves Closer To Accepting Crypto for Taxes, but Not Considering Legal Tender Status



<ul class="wp-block-list"><li>FlowBank’s clients, which can invest in CoinShares’ crypto through derivative products, are set to have direct access to crypto in the third quarter</li><li>The bank will be able to take advantage of more advanced features such as holding, staking and lending in the coming months, according to CoinShares</li></ul>



<a href="https://cms.blockworks.co/coinshares-seeks-to-reach-more-investors-by-upping-stake-in-flowbank/" target="_blank" rel="noreferrer noopener">Story</a>: CoinShares Seeks To Reach More Investors by Upping Stake in FlowBank



<ul class="wp-block-list"><li>Liberal Party candidate Yoon Suk Yeol has clinched a victory over political rival Lee Jae-Myung in a narrow race</li><li>Pundits hope Yoon will pave the way for a new era of crypto deregulation in the country following campaign promises to do so</li></ul>



<a href="https://cms.blockworks.co/nft-marketplace-magic-eden-secures-27m-series-a/" target="_blank" rel="noreferrer noopener">Story</a>: NFT Marketplace Magic Eden Secures $27M Series A



<ul class="wp-block-list"><li>The capital will go toward staff expansion, product development and future partnerships</li><li>Other investors include Sequoia Capital, Electric Capital, Greylock Partners, Kindred Capital, Variant Fund and Solana Ventures</li></ul>



<a href="https://cms.blockworks.co/congressional-candidate-uses-nfts-to-raise-awareness-funds/" target="_blank" rel="noreferrer noopener">Story</a>: Congressional candidate uses NFTs to raise awareness, funds



<ul class="wp-block-list"><li>The NFT holders will have access to conversations with climate scientists and the Kurani campaign’s Earth Day party in the metaverse</li><li>Kurani, if elected, would prioritize clear guidelines on know your customer and anti-money laundering reporting while seeking to protect privacy</li></ul>



<h3 class="wp-block-heading">Going forward</h3>



Investors should prepare for the Federal Open Market Committee's federal funds rate announcement Wednesday. The expected rate change is likely to move markets.



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Market Wrap: Crypto Rises as European Mining Ban Falls Through

<div id="highlights-block_61e889eac96b6" class="highlights">
 <ul>
 <li>Cryptos and equities notched lower Friday after Biden announced the US, European Union and other nations would seek to ban more Russian imports</li>
 <li>&#8220;A direct confrontation between NATO and Russia is World War III. And something we must strive to prevent,&#8221; President Biden said in a Tweet Friday</li>
 </ul>
 
</div>



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</script>



Equity and crypto markets fell Friday as President Joe Biden announced the US, the European Union and G7 members are planning to remove Russia's "most favored" nation trading status.



The move widens bans on Russian imports to additional goods, including vodka and seafood.



In a press <a href="https://www.youtube.com/watch?v=cJkkTAp15mc" target="_blank" rel="noreferrer noopener">briefing</a>, Biden said the switch in Russia's trade status "would be another crushing blow to the Russian economy." Biden added: "It's already suffering very badly from our sanctions."



Biden reiterated that the US would defend NATO, but that a direct conflict between NATO and Russia would result in a new world war.



"I want to be clear: We will defend every inch of NATO territory with the full might of a united and galvanized NATO," Biden <meta charset="utf-8"><a href="https://twitter.com/POTUS/status/1502353759455821833" target="_blank" rel="noreferrer noopener">said</a>. "But we will not fight a war against Russia in Ukraine. A direct confrontation between NATO and Russia is World War III. And something we must strive to prevent."



So far, Russia seems indifferent to the economic strife. The country even increased its push through Ukraine by striking airfields in the west and a major industrial city in the east, lowering hopes that the conflict could end diplomatically.



The invasion continues to make markets highly volatile. The S&amp;P 500 fell by 1.3% Friday, while the Nasdaq and Dow dropped by 2.13% and 0.69%, respectively.


[stock_market_widget type="accordion" template="chart" color="#5B35D5" assets="^GSPC,^IXIC,^DJI" start_expanded="true" display_currency_symbol="false" api="yf" chart_range="1mo" chart_interval="1d"]



Cryptocurrencies also slid, with bitcoin falling by 2.09% and ether dropping by 2.08% by the end of stock trading. 



THORchain, a decentralized liquidity protocol, was crypto’s biggest gainer of the day among the top 100 coins by market capitalization, with a 9.27% gain.


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<h3 class="wp-block-heading">Top stories</h3>



<a href="https://cms.blockworks.co/report-50-of-nft-holders-have-lost-access-to-their-nfts/" target="_blank" rel="noreferrer noopener">Story</a>: Report: 50% of NFT Holders Have Lost Access to Their NFTs



<ul class="wp-block-list"><li>MetaMask, Trust Wallet and Math Wallet are the most commonly used wallets</li><li>16% of respondents said their accounts on NFT platforms had been previously hacked</li></ul>



<a href="https://cms.blockworks.co/yoon-suk-yeol-wins-south-koreas-presidential-election/" target="_blank" rel="noreferrer noopener">Story</a>: Pro-crypto Candidate Yoon Suk Yeol Wins South Korea’s Presidency



<ul class="wp-block-list"><li>Liberal Party candidate Yoon Suk Yeol has clinched a victory over political rival Lee Jae-Myung in a narrow race</li><li>Pundits hope Yoon will pave the way for a new era of crypto deregulation in the country following campaign promises to do so</li></ul>



<a href="https://cms.blockworks.co/juno-network-stakeholders-to-decide-fate-of-whales-millions-in-a-crypto-first/" target="_blank" rel="noreferrer noopener">Story</a>: Juno Network Stakeholders To Decide Fate of Whale’s Millions in a Crypto First



<ul class="wp-block-list"><li>If the whale abruptly pulled out their funds — currently worth about $122 million — they could single-handedly wipe out JUNO liquidity on decentralized exchanges</li><li>The proposal, if passed, could set an “interesting” and “potentially dangerous” precedent, a community member named Kavaskous on Twitter said</li></ul>



<a href="https://cms.blockworks.co/new-planned-etf-targets-nft-related-stocks/" target="_blank" rel="noreferrer noopener">Story</a>: New Planned ETF Targets NFT-related Stocks



<ul class="wp-block-list"><li>The filing comes as the SEC rejected proposed spot bitcoin ETFs from fund issuers NYDIG and Global X Thursday</li><li>Exchange Traded Concepts launched the Fount Metaverse ETF in October</li></ul>



<h3 class="wp-block-heading">Going forward</h3>



Markets are likely to be volatile going forward as the Ukraine-Russia conflict intensifies. The mid-March Federal Reserve meeting, where the regulator plans to reveal its interest rate plan, will take place next week.



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Market Wrap: Stocks, Cryptos Fall as US Looks For New Ways to Punish Putin

<div id="highlights-block_61e889eac96b6" class="highlights">
 <ul>
 <li>Talks between Ukraine and Russia to establish a ceasefire and humanitarian corridors on Thursday made no progress</li>
 <li>The US core CPI rose 0.8% in February, bringing inflation up 7.8% year-over-year, the highest its been since 1982</li>
 </ul>
 
</div>



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Ukraine and Russia’s foreign ministers discussed implementing a ceasefire and establishing humanitarian corridors for refugees in a Thursday meeting hosted by Turkey’s foreign minister.



Ukraine’s foreign minister, Dmytro Kuleba, called for a 24-hour ceasefire and an open pathway out of Mariupol for civilians. Russia’s Sergei Lavrov did not agree, citing proposals already offered by Russia that called for a demilitarized Ukraine.



“I made a simple proposal to Minister Lavrov: I can call my Ukrainian ministers, authorities, president now and give you 100% assurances on security guarantees for humanitarian corridors,” Kuleba <a href="https://www.youtube.com/watch?v=TM5Pj2PbZMA" target="_blank" rel="noreferrer noopener">said</a>. “I asked him, ‘Can you do the same?’ and he did not respond.”



The lack of consensus between the two nations added to concerns that a diplomatic ending to the conflict may not be realistic.



Adding to market uncertainty was February’s consumer price index report, which showed inflation is still rising.



The consumer price index <a href="https://www.bls.gov/news.release/cpi.nr0.htm" target="_blank" rel="noreferrer noopener">increased</a> 0.8% in February, bringing year-over-year inflation up to 7.9%, the highest increase since January of 1982.



US stocks opened sharply lower and, despite climbing throughout the day, ended down. The S&amp;P 500 fell 0.43% and the Nasdaq and Dow stumbled 1.10% and 0.34% respectively. 


[stock_market_widget type="accordion" template="chart" color="#5B35D5" assets="^GSPC,^IXIC,^DJI" start_expanded="true" display_currency_symbol="false" api="yf" chart_range="1mo" chart_interval="1d"]



Crypto markets, which had jumped yesterday, lost most of their gains today as investors sold off. Bitcoin was down by as much as 8% by midday but ended stock trading down just under 5.7%. Ether took a hit as well, falling by 3.91% by the end of stock trading. 



Stacks, a layer-1 blockchain aiming to bring decentralized applications (dApps) to bitcoin, was crypto’s biggest gainer of the day among the top 100 coins by market capitalization, with a 21.7% gain.


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<h3 class="wp-block-heading">Top stories</h3>



<a href="https://cms.blockworks.co/will-bidens-executive-order-speed-up-spot-bitcoin-etf-approval/" target="_blank" rel="noreferrer noopener">Story</a>: Will Biden’s Executive Order Speed Up Spot Bitcoin ETF Approval?



<ul class="wp-block-list"><li>Interagency research may alleviate SEC crypto concerns around fraud and manipulation, WisdomTree’s chief legal officer said</li><li>The executive order does not affect the SEC’s stance in the short term, according to Global X’s director of research</li></ul>



<a href="https://cms.blockworks.co/hack-vc-hikes-fundraising-stakes-targets-500m-for-new-crypto-venture-fund/" target="_blank" rel="noreferrer noopener">Story</a>: Hack VC Hikes Fundraising Stakes, Targets $500M for New Crypto Venture Fund



<ul class="wp-block-list"><li>The firm has been courting institutional players, including pension funds and endowments, as limited partners</li><li>Hack VC is looking to hire as the firm scales its assets under management</li></ul>



<a href="https://cms.blockworks.co/ethereum-scaling-startup-reportedly-triples-valuation-in-four-months/" target="_blank" rel="noreferrer noopener">Story</a>: Ethereum Scaling Startup Reportedly Triples Valuation in 4 Months



<ul class="wp-block-list"><li>“Since StarkNet was launched, interest from devs and investors has gone through the roof,” an anonymous company source told Blockworks</li><li>In an interview with Blockworks in November 2021, one of the four co-founders said that they “didn’t need the money” from its Series C, but the funds helped them grow their operations even faster</li></ul>



<a href="https://cms.blockworks.co/small-crypto-miners-are-fixating-on-dwindling-towns-and-dilapidated-buildings/" target="_blank" rel="noreferrer noopener">Story</a>: Small Crypto Miners Are Fixating on Dwindling Towns and Dilapidated Buildings



<ul class="wp-block-list"><li>Plan C Crypto, a California crypto mining firm, recently picked Fayetteville, North Carolina for its East Coast headquarters</li><li>“In the mining world, the turnaround that happens in communities when a large mining farm is deployed there can change lives,” Mason Jappa, CEO of Blockware Solutions, told Blockworks</li></ul>



<h3 class="wp-block-heading">Going forward</h3>



Bitcoin had a significant drop Thursday but remained above its previous low. The cryptocurrency has now seen a series of higher lows, suggesting it is consolidating and preparing for a larger volatile move up or down. Investors should prepare for next Wednesday’s Fed meeting at which a change to the federal funds rate is likely. While a 25 basis point increase is expected, continuing growth inflation could prompt a steeper increase.



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Market Wrap: Ukraine-Russia Talks Fail, Inflation Hits 40-Year High

Ben Strack

<div id="highlights-block_622a60ed26b55" class="highlights">
 <ul>
 <li>Interagency research may alleviate SEC crypto concerns around fraud and manipulation, WisdomTree’s chief legal officer said</li>
 <li>The executive order does not affect the SEC’s stance in the short term, according to Global X’s director of research</li>
 </ul>
 
</div>



On the heels of President Biden rolling out his inaugural executive order on cryptocurrency, US asset managers are touting the development as a bullish indicator for the long-awaited spot bitcoin ETF.



The timeline for the Securities and Exchange Commission’s approval of such a product, however, is anyone’s guess.&nbsp;



The <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2022/03/09/executive-order-on-ensuring-responsible-development-of-digital-assets/" target="_blank" rel="noreferrer noopener">executive order</a> focuses on crypto policy surrounding consumer protection, financial stability, risk mitigation, the country’s financial leadership, financial inclusion and responsible innovation.



Though industry watchers have called the order an important step in the policymaking process, <a href="https://cms.blockworks.co/bidens-crypto-executive-order-may-be-watershed-moment-despite-lack-of-specifics/" target="_blank" rel="noreferrer noopener">some told Blockworks</a> concrete legislation could take years.



Setting up a unified framework to dictate how the government will regulate crypto will reduce bureaucratic red tape and help would-be spot bitcoin ETF issuers learn the new rules of the road, according to Lara Crigger, managing editor of ETF Trends and ETF Database.



“If you are the US government and you&#8217;re going to do something as groundbreaking as, say, approve the first spot bitcoin ETF in the US, you&#8217;d need this framework in place before you could even consider doing it,” Crigger said.&nbsp;



<h3 class="wp-block-heading">ETP issuers weigh in</h3>



Craig Salm, chief legal officer at Grayscale Investments, said regulators’ approval of a spot bitcoin ETF is a matter of when, not if.



The firm is trying to convert its Grayscale Bitcoin Trust (GBTC) to an ETF. <a href="https://cms.blockworks.co/support-for-spot-bitcoin-etf-revs-up-as-agency-holds-course/" target="_blank" rel="noreferrer noopener">Public comments</a> have rolled in from investors — as well as executives from crypto companies such as Coinbase and BlockFi — with most supporting the move. The SEC is expected to rule on the conversion by July after a 240-day review period.



“What the executive order will do is enable the SEC to do their own studies and have their own findings, which I believe will also result in support for a spot bitcoin ETF, because the markets are ready,” Salm said.



A spokesperson for the SEC did not immediately return a request for comment.



WisdomTree Chief Legal Officer Ryan Louvar said it’s not typical to see an executive order that involves so many governmental bodies and takes a global approach.



But financial regulators such as the SEC, Commodity Futures Trading Commission (CFTC) and the Office of the Comptroller of the Currency (OCC), are not prominently featured in the executive order. Rather, it relies on coordination and input from other agency heads, such as the secretary of state, the secretary of the Treasury and the attorney general.



“To the extent that the order is calling for research and coordination among federal agencies to continue to gain greater depth around the digital asset marketplace, part of that is the SEC’s concerns around potential fraud and manipulation,” Louvar said. “If this research, assessment and coordination can help address those concerns…I think that will potentially help spur or at least add the potential for an approval.”



The company <a href="https://cms.blockworks.co/wisdomtree-amends-bitcoin-etf-application/" target="_blank" rel="noreferrer noopener">amended its ETF application</a> in December that would invest directly in bitcoin a week after the SEC rejected its original proposal. WisdomTree already offers ETPs in Europe that hold crypto directly.



Also offering such products overseas is Global X, which launched its first physically backed crypto offerings on Thursday. The bitcoin and ether ETPs (exchange-traded products) are now trading in Germany, and the company continues to pursue a US bitcoin ETF that it first <a href="https://cms.blockworks.co/global-x-adds-to-stack-of-bitcoin-etfs-proposed-to-sec/" target="_blank" rel="noreferrer noopener">filed with the SEC</a> in July.



Pedro Palandrani, director of research at Global X, said the executive order urges the SEC to build a roadmap toward mitigating risk while also embracing financial technology upgrades, but it does not affect the agency’s views in the short term.



“A spot ETF approval, or lack of, really relies on the SEC’s approach towards the space and, while it’s not easy to paint a picture of how this will evolve over time, the mandate focuses on encouraging a working plan towards its potential adoption,” Palandrani said.



Hany Rashwan, CEO of Swiss ETP issuer 21Shares, called the executive order a “significant step” that could open doors for the firm in the US. The world’s largest ETP provider, the firm has 28 products trading across Europe and <a href="https://cms.blockworks.co/ark-files-for-bitcoin-etf/" target="_blank" rel="noreferrer noopener">filed last year</a> to launch a bitcoin ETF in the US with Ark Invest.



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Will Biden’s Executive Order Speed Up Spot Bitcoin ETF Approval?

Casey Wagner

<div id="highlights-block_62292a5a42650" class="highlights">
 <ul>
 <li>The Biden administration’s roadmap shows the US wants to be a leader in digital assets, says former Coinbase policy head</li>
 <li>The executive order calls for “placing urgency” on the research and development of a potential US CBDC, but does not mention stablecoins</li>
 </ul>
 
</div>



The new executive order on digital assets from President Biden is an important step in the policymaking process, according to industry watchers, though concrete legislation could take years.



Biden <a href="https://cms.blockworks.co/biden-signs-crypto-executive-order-promoting-responsible-innovation/" target="_blank" rel="noreferrer noopener">signed the executive order</a> Wednesday, which outlines the government’s approach to digital assets and their underlying technology, according to a White House statement.



John Collins, partner at advisory firm FS Vectors and former policy head at Coinbase, said while Biden’s executive order held few surprises, the fact that the administration is stepping in is a net positive for the industry.&nbsp;



Collins compared the executive order to the Clinton administration’s “Framework for Global Electronic Commerce” released in the 1990s, which studied the future of the internet.



“It’s clear that the administration realizes that this is not going away and that they really stress the critical importance of the technology in various applications to the benefit of the financial system going forward,” Collins said. “They want to make sure that the US is ahead of it.”



The price of bitcoin was roughly $41,840 at 4 pm ET — up 8.6% in 24 hours.



“An effort to establish more clarity to the regulatory framework will definitely bring more confidence to investors and welcome more Americans to the crypto ecosystem,” said Thomas Hook, Bitstamp’s US chief compliance officer. “While crypto markets may continue to be volatile, today&#8217;s news shows that recognition from the Biden administration is encouraging to the market.”



<h3 class="wp-block-heading">What’s next?</h3>



The order outlines its focus on crypto regulation around consumer protection, financial stability, risk mitigation, the US’s financial leadership, financial inclusion and responsible innovation.



There will likely be requests for information, roundtable discussions and working groups formed in coming months, though concrete actions will take time, Collins said.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“Throughout there’s a recognition that there needs to be more clarity,” he said. “Maybe it’ll be on securities issues, maybe it’ll be on illicit finance, maybe it’ll be on other things — probably all of them, and I think that’s good.”</blockquote>



Kristin Smith, executive director of the crypto lobbyist Blockchain Association, told Blockworks the start of fact-gathering and research around these topics is “a really healthy first step in a policymaking process.”



The order calls for agency reports to be completed within six months, with lawmakers and the public then having the chance to weigh in.&nbsp;



“Obviously we’ve got a lot of work ahead of us, and we may not like every single policy proposal that’s put forth six months from now, but at least we can think methodically about this and engage with the government,” Smith said.&nbsp;



<h3 class="wp-block-heading">A call to further study CBDCs</h3>



Among the more surprising pieces of the order, Smith said, was the focus on central bank digital currencies (CBDCs).&nbsp;



It calls for “placing urgency” on the research and development of a US CBDC — though that’s not a guarantee it would ever be rolled out — as well as assessing requisite technology.



In its January <a href="https://cms.blockworks.co/fed-opens-debate-on-cbdc-takes-no-policy-stance/" target="_blank" rel="noreferrer noopener">Central Bank Digital Currency report</a>, the Federal Reserve declined to make policy recommendations.&nbsp;



The Blockchain Association is neutral.



“I think the important thing for us is we want the ability of private organizations and individuals to build technology around the dollar, and that’s what we’ve seen with dollar-backed stablecoins,” Smith said.&nbsp;



<a href="https://cms.blockworks.co/the-investors-guide-to-stablecoins/" target="_blank" rel="noreferrer noopener">Stablecoins</a> are conspicuously absent from the executive order. Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell have both expressed concern over their security and safety.



“It’s not surprising that stablecoins are not mentioned, because Yellen is already working on it in detail,” John Belizaire, founder and CEO of Soluna Computing, said. “Also, a US digital currency is a competitor to stablecoins.”&nbsp;



Congress is looking to tighten its reins on stablecoins. Bills along those lines will likely be introduced by US lawmakers later this month, <a href="https://cms.blockworks.co/congressional-action-on-stablecoins-could-come-as-soon-as-this-month-source-says/" target="_blank" rel="noreferrer noopener">Blockworks reported</a>.



Jeremy Allaire, CEO of Circle, the issuer behind the largest stablecoin, USD Coin (USDC), called the executive order a “watershed moment.”



“The US government now has a whole-of-government approach for supporting the open, internet-native economic infrastructure ushered in by new Web3 technologies — bringing the country a step closer to ensuring the US dollar remains the currency of the internet and that the US remains the home of principled innovation and competition,” Allaire said.



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Biden’s Crypto Executive Order May Be ‘Watershed Moment’ Despite Lack of Specifics

<div id="highlights-block_61e889eac96b6" class="highlights">
 <ul>
 <li>Treasury Secretary Janet Yellen said the order&#8217;s approach &#8220;could result in substantial benefits for the nation, consumers, and businesses&#8221;</li>
 <li>Equity markets rose, too, despite continuing tensions in Ukraine, with the S&amp;P 500 posting a 2.57% gain</li>
 </ul>
 
</div>



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Crypto markets notched sizable gains Wednesday as the White House unveiled President Biden's long-awaited <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2022/03/09/executive-order-on-ensuring-responsible-development-of-digital-assets/" target="_blank" rel="noreferrer noopener">executive order</a> on digital assets. 



Investors were quick to pinpoint an accompanying statement as mostly positive, including it calling the rise of digital assets <meta charset="utf-8">"an opportunity to reinforce American leadership in the global financial system and at the technological frontier."



"Today, <a href="https://twitter.com/POTUS" target="_blank" rel="noreferrer noopener">@POTUS</a> signed an Executive Order on crypto-assets," Securities and Exchange Commission Chair Gary Gensler <meta charset="utf-8"><a href="https://twitter.com/GaryGensler/status/1501513124091871235" target="_blank" rel="noreferrer noopener">tweeted</a>. "I look forward to collaborating with colleagues across the government to achieve important public policy goals: protecting investors &amp; consumers, guarding against illicit activity &amp; helping ensure financial stability."



The Department of the Treasury also released a <a href="https://web.archive.org/web/20220309014601/https://home.treasury.gov/news/press-releases/jy0643" target="_blank" rel="noreferrer noopener">statement</a> from Treasury Secretary Janet Yellen that was later taken down. 



While Yellen addressed the potential issues digital assets may introduce, she also said creating legislation could help both consumers and businesses. 



"President Biden’s historic executive order calls for a coordinated and comprehensive approach to digital asset policy," Yellen said.&nbsp;"This approach will support responsible innovation that could result in substantial benefits for the nation, consumers and businesses."



The US move to regulate crypto — in what most industry watchers dubbed a fair manner — caused bitcoin to swell. <meta charset="utf-8">The cryptocurrency was up as much as almost 10% intraday, before ending stock trading with a 7.96% pop.



The rest of the crypto market followed, sending ether up 4.2% and the overall cryptocurrency market capitalization up 5.72%. 



THORchain, a decentralized liquidity protocol, saw its native RUNE token jump nearly 30% on the day, making it the largest gainer among the top 100 cryptocurrencies by market cap. 


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Equity markets rose, too, despite continuing tensions in Ukraine, with the S&amp;P 500 posting a 2.57% gain. The Nasdaq and Dow also increased, pushing up 3.58% and 2%, respectively.


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<h3 class="wp-block-heading">Top stories</h3>



<a href="https://cms.blockworks.co/dubai-is-the-latest-government-to-roll-out-crypto-law-set-up-regulator/" target="_blank" rel="noreferrer noopener">Story</a>: Dubai Is the Latest Government To Roll Out Crypto Law, Set Up Regulator



<ul class="wp-block-list"><li>Dubai Financial Services Authority reveals report on crypto token regulation</li><li>Proposal calls for “privacy tokens” and “algorithmic tokens” to be banned</li></ul>



<a href="https://cms.blockworks.co/defi-hedge-fund-fresh-off-profitable-private-bets-launches-first-venture-vehicle/" target="_blank" rel="noreferrer noopener">Story</a>: DeFi Hedge Fund, Fresh off Profitable Private Bets, Launches First Venture Vehicle



<ul class="wp-block-list"><li>The launch is one of a growing number from hedge fund managers focused on digital assets looking to increase their exposures to crypto private markets</li><li>The firm invested in Animoca Brands, the parent company of The Sandbox metaverse, when the company was valued at $1 billion</li></ul>



<a href="https://cms.blockworks.co/pantera-capitals-blockchain-fund-has-1b-in-commitments/" target="_blank" rel="noreferrer noopener">Story</a>: Pantera Capital’s Blockchain Fund Has $1B in Commitments



<ul class="wp-block-list"><li>Pantera partner calls gaming “a huge sector for years to come” in the crypto space</li><li>The fund’s venture equity deals range from $1 million to about $40 million, typically as part of seed, Series A or Series B funding rounds</li></ul>



<a href="https://cms.blockworks.co/biden-signs-crypto-executive-order-promoting-responsible-innovation/" target="_blank" rel="noreferrer noopener">Story</a>: Biden Signs Crypto Executive Order Promoting “Responsible Innovation”



<ul class="wp-block-list"><li>Biden calls for a unified approach on regulating and evaluating cryptocurrencies</li><li>Industry members welcome regulation, but ask that their voices be heard</li></ul>



<h3 class="wp-block-heading">Going forward</h3>



Bitcoin has experienced a series of higher lows, suggesting that the worst may be behind the cryptocurrency. Investors should still be wary of volatility stemming from the Ukraine conflict and the coming mid-March Fed meeting on interest rates. 



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Market Wrap: Bitcoin Jumps After White House Rolls Out Crypto Executive Order

<div id="highlights-block_6228a996bb856" class="highlights">
 
</div>


<div id="highlights-block_6228a99fbb857" class="highlights">
 <ul>
 <li>Biden calls for a unified approach on regulating and evaluating cryptocurrencies</li>
 <li>Industry members welcome regulation, but ask that their voices be heard</li>
 </ul>
 
</div>



President Biden signed an executive order Wednesday morning that asks federal agencies to establish a roadmap for regulating crypto and identify risks and potential for innovation, US Securities and Exchange Commission Chair Gary Gensler <a href="https://twitter.com/GaryGensler/status/1501513124091871235" target="_blank" rel="noreferrer noopener">wrote on Twitter</a>.



“The rise in digital assets creates an opportunity to reinforce American leadership in the global financial system and at the technological frontier, but also has substantial implications for consumer protection, financial stability, national security, and climate risk,” a <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2022/03/09/fact-sheet-president-biden-to-sign-executive-order-on-ensuring-responsible-innovation-in-digital-assets/" target="_blank" rel="noreferrer noopener">fact sheet</a> released by the White House read.&nbsp;



The order is the first time the executive branch has attempted to create a unified federal strategy around the growing digital asset industry, but it does not provide the clear regulatory guidelines many industry members have requested.



“We hope [the executive order] leads to a future regulatory state where existing agencies have more clarity on how the existing regulatory framework can and should be applied to the blockchain industry and the identification of any gaps,” Denelle Dixon, CEO and executive director of the Stellar Development Foundation, said. 



The order lists six focus areas for cryptocurrency policy and regulation: protect consumers and businesses, protect financial stability, mitigate risk, US leadership in the global financial system and economic competitiveness, financial inclusion and responsible innovation.



The order instructs agencies, including the Treasury and SEC, to research a variety of topics associated with digital assets and recognize potential risks and use cases, including the role a central bank digital currency may play in the US.&nbsp;



“Under the executive order, Treasury will partner with interagency colleagues to produce a report on the future of money and payment systems,” Treasury Secretary Janet Yellen said in a statement Wednesday. “We’ll also convene the Financial Stability Oversight Council to evaluate the potential financial stability risks of digital assets and assess whether appropriate safeguards are in place. And, because the questions raised by digital assets often have important cross-border dimensions, we’ll work with our international partners to promote robust standards and a level playing field.”



As agencies continue to work toward a unified digital asset strategy, industry members ask that their voices be heard.&nbsp;



“This call for collaboration cannot be an excuse to keep the industry from having a seat at the table,” Dixon said. “We&#8217;ve come too far in a short period of time to begin to shut outside perspectives out now.”



The order comes as Congress also looks to <a href="https://cms.blockworks.co/congressional-action-on-stablecoins-could-come-as-soon-as-this-month-source-says/" target="_blank" rel="noreferrer noopener">tighten its reins</a> on the stablecoin industry. Bills designed to regulate the digital assets will likely be introduced by US lawmakers in the House and Senate later this month, according to a source familiar with the matter.



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Biden Signs Crypto Executive Order Promoting “Responsible Innovation”

<div id="highlights-block_61ef2c9f0bbd2" class="highlights">
 <ul>
 <li>President Biden is expected to release a comprehensive cryptocurrency policy in the coming weeks, per a report </li>
 <li>The news comes as federal agencies take a closer look at digital assets </li>
 </ul>
 
</div>



Following an uptick in interest from the federal government in digital assets, the Biden administration is reportedly preparing to issue an executive order on cryptocurrency policy.



The Bloomberg report comes as federal organizations have attempted to take on a greater role in digital asset oversight — leading to questions over <a href="https://cms.blockworks.co/hester-peirce-theres-a-jurisdiction-battle-over-crypto-regulation/" target="_blank" rel="noreferrer noopener">jurisdiction</a> of the emerging asset class. 



“Biden might use the power of the pen to appoint an individual crypto or digital assets Czar, having oversight power over a group of multiple partner agencies like the Commodity Futures Trading Commission, Financial Crimes Enforcement Network, the Office of the Comptroller of the Currency and the Securities and Exchange Commission,” said Michael Fasanello, director of training and regulatory affairs at the Blockchain Intelligence Group. “All of the aforementioned agencies have some degree of interest in regulating the digital assets space.” 



While Biden has been relatively quiet on crypto, his administration&#8217;s stance has become more clear. An appointee to the Treasury, Brian Nelson, said <a href="https://cms.blockworks.co/biden-nominee-for-treasurys-terrorism-and-financial-intelligence-unit-prioritizes-new-regulations-around-cryptocurrency/" target="_blank" rel="noreferrer noopener">cryptocurrencies need to be more harshly</a> scrutinized under anti-money laundering law.



In May, the <a href="https://cms.blockworks.co/us-treasury-report-crypto-transfers-of-10000/" target="_blank" rel="noreferrer noopener">Treasury Department</a> moved to require that crypto transfers of $10,000 or more must be reported to the Internal Revenue Service. In a November <a href="https://home.treasury.gov/news/press-releases/jy0454">report</a> by the President’s Working Group on Financial Markets, Treasury Secretary Janet Yellen asserted stablecoins may pose a threat to financial stability. 



And The Federal Reserve recently released its <a href="https://cms.blockworks.co/fed-opens-debate-on-cbdc-takes-no-policy-stance/" target="_blank" rel="noreferrer noopener">40-page report</a> parsing the possibility of a central bank digital currency.



​​&#8221;The federal government has much broader and far-reaching oversight over our financial policy and regulation, and I&#8217;m hopeful that the Biden administration&#8217;s executive order will provide clarity for this groundbreaking and evolving industry,” said Illinois State Rep. Margaret Croke (D-12th District). “It will then be on us at the state-level to align with federal policy, and I look forward to seeing what the Biden Administration announces.&#8221;



The executive order, expected later this year, will examine the economic and security challenges of crypto, according to Bloomberg.&nbsp; The administration is also calling for other government agencies to chime in on how digital assets may impact their work.&nbsp;



“While the specifics of this impending executive action remain to be seen, what is for certain is that private sector businesses dealing with digital assets have had years to prepare for this moment,” Fasanello said. “The industry has had ample time to take stock of the example set by the traditional finance system and create a skeletal model of what further specified regulatory obligations will look like.” 



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Crypto Industry Awaits Biden’s Reported Crypto Executive Order

<div id="highlights-block_60d24b79bbbc2" class="highlights">
 <ul>
 <li>Nominees Nelson and Elizabeth Rosenberg call cryptocurrency regulation a priority during Tuesday hearing of the Senate Committee on Banking, Housing, and Urban Affairs.</li>
 <li>Democratic and Republican senators imply different levels of personal concern around digital assets space</li>
 </ul>
 
</div>



President Biden’s nominee for the Department of the Treasury’s under secretary for terrorism and financial intelligence labeled new regulations around cryptocurrency as a priority of his if confirmed.&nbsp;



Brian Nelson, nominated to lead the unit responsible for developing and implementing the National Money Laundering Strategy and other policies and programs to fight financial crimes, said that he would implement pieces of legislation within the <a href="https://www.natlawreview.com/article/anti-money-laundering-act-2020-congress-enacts-most-sweeping-aml-legislation-passage" target="_blank" rel="noreferrer noopener">Anti-Money Laundering Act of 2020</a>, but noted the importance of not shutting down safe new technologies.



The law was passed on January 1 and made significant changes to the Bank Secrecy Act of 1970 by expanding the duties and powers of the Treasury’s Financial Crimes Enforcement Network, known as FinCEN.



“I think the other really powerful piece of that legislation is that it reflected a balancing of regulating to prevent virtual currency and other types of new technology from undermining our anti-money laundering system while also being respectful of the fact that we need to support responsible innovation and preserve that here in the United States and not see that market and opportunity leave the country,” Nelson said.



His comments came during a Tuesday hearing of the Senate Committee on Banking, Housing, and Urban Affairs. He was responding to a question by Sen. Catherine Cortez Masto, a Democrat from Nevada, who noted that “money laundering, tax evasion, terrorist financing and fraud follow privately created and managed currencies.”



Elizabeth Rosenberg, Biden’s nominee for assistant secretary of the Treasury’s terrorism financing division, added during the hearing that she would ensure the regulatory regime that applies to cryptocurrency is appropriate and consistent across areas of regulation. Assisting financial regulators in other countries to implement laws and controls will also be critical, she added.&nbsp;



<div class="wp-block-image is-style-default"><figure class="aligncenter size-large is-resized"><img loading="lazy" decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/06/CNAS-Headshot-Liz-Rosenberg1-1024x860.jpeg" alt="Elizabeth Rosenberg" class="wp-image-5051" width="431" height="361" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/06/CNAS-Headshot-Liz-Rosenberg1-1024x860.jpeg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2021/06/CNAS-Headshot-Liz-Rosenberg1-1024x860.jpeg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/06/CNAS-Headshot-Liz-Rosenberg1-1024x860.jpeg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/06/CNAS-Headshot-Liz-Rosenberg1-1024x860.jpeg?w=306 306w, https://blockworks-co.imgix.net/wp-content/uploads/2021/06/CNAS-Headshot-Liz-Rosenberg1-1024x860.jpeg?w=311 311w, https://blockworks-co.imgix.net/wp-content/uploads/2021/06/CNAS-Headshot-Liz-Rosenberg1-1024x860.jpeg?w=261 261w, https://blockworks-co.imgix.net/wp-content/uploads/2021/06/CNAS-Headshot-Liz-Rosenberg1-1024x860.jpeg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2021/06/CNAS-Headshot-Liz-Rosenberg1-1024x860.jpeg?w=1200 1200w" sizes="auto, (max-width: 431px) 100vw, 431px" /><figcaption>Elizabeth Rosenberg</figcaption></figure></div>



“Without that kind of collaboration and without other countries having the appropriate regulatory framework, it’s all too easy for criminals to avoid US jurisdiction and conduct their illegitimate and criminal activity from other jurisdictions,” Rosenberg said.&nbsp;



US regulators <a href="https://cms.blockworks.co/regulator-imposed-penalties-related-to-crypto-total-2-5b-since-2009/" target="_blank" rel="noreferrer noopener">have imposed $2.5 billion in penalties</a> against people and firms related to crypto over the last decade, according to blockchain analytics provider Elliptic. The bulk of the fines related to unregistered securities offerings and fraud. While the SEC imposed $1.7 billion of the penalties, the Commodities Futures Trading Commission and FinCEN collected $624 million and $183 million, respectively.&nbsp;&nbsp;&nbsp;



Sen. Cynthia Lummis, a Republican from Wyoming, used a portion of her questioning time during the hearing to tout digital asset analytics providers, which she said helped law enforcement agencies recover 85% of the digital assets paid in <a href="https://www.nytimes.com/2021/05/08/us/politics/cyberattack-colonial-pipeline.html" target="_blank" rel="noreferrer noopener">a ransomware attack on Colonial Pipeline</a>.&nbsp;&nbsp;



She also referenced <a href="https://blog.chainalysis.com/reports/2021-crypto-crime-report-intro-ransomware-scams-darknet-markets" target="_blank" rel="noreferrer noopener">a report by Chainalysis</a>, which found that the criminal share of all cryptocurrency activity was 0.34% in 2020, down from 2.1% the year before.



“It seems to me like we would still be working on recovering this money if it was done by wire transfer or other traditional payment rails, so there are real advancements in the [cryptocurrency] space of which I think many people are unaware,&#8221; said Lummis.

Biden Nominee for Treasury’s Terrorism and Financial Intelligence Unit Prioritizes ‘New Regulations’ Around Cryptocurrency

<div id="highlights-block_60bfb3d4d4b93" class="highlights">
 <ul>
 <li>Bitcoin is largest holding in Tim Wu’s financial portfolio, representing between 25% and 43% of his assets</li>
 <li>Once a critic of big tech platforms, Wu predicted in 2017 that bitcoin ‘would crash again’ but that the currency ‘feels tested’</li>
 </ul>
 
</div>



President Biden’s special assistant for technology and competition policy reportedly owns between $1 million and $5 million in bitcoin and at least $100,000 in filecoin.



Tim Wu <a href="https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/05/white-house-announces-additional-policy-staff/" target="_blank" rel="noreferrer noopener">joined the Biden administration</a>’s National Economic Council in March. His investment in bitcoin is the largest holding in his portfolio, amounting to between 25% and 43% of his assets, according to a personal financial disclosure obtained by Politico.



A White House spokesperson told Politico in a statement that Wu has not worked on matters involving cryptocurrency and is recused from any because of his financial interest.



The price of bitcoin <a href="https://cms.blockworks.co/bitcoin-extends-sell-off-falls-over-10/" target="_blank" rel="noreferrer noopener">dipped</a> about 11% on Tuesday to below $32,000. Filecoin is an open-source cloud storage marketplace, protocol and cryptocurrency that was released in 2014. It’s currently trading at  $73.18 according to <a href="https://www.coingecko.com/en/coins/filecoin" target="_blank" rel="noreferrer noopener">CoinGecko</a>.



<h3 class="wp-block-heading">The bitcoin bubble</h3>



Wu wrote in an <a href="https://www.nytimes.com/2017/12/18/opinion/bitcoin-boom-technology-trust.html" target="_blank" rel="noreferrer noopener">opinion piece for the New York Times</a> in 2017 that bitcoin was “in a bubble,” noting that it had grown in value from about 39 cents to more than $18,000 in the eight-year span since it launched. The move reflects a transfer of social trust away from government-backed institutions to systems reliant on well-tested computer code, he said at the time.



“Bitcoin may be in a bubble, but not all bubbles are created equal,” he wrote in 2017. “Some are shimmering nothings, reflecting little more than an underlying pyramid scheme. But others are like ocean swells that could become enormous waves. Consider the tech stocks of the late 1990s — a bubble, to be sure, but in retrospect, was Amazon really overvalued?”



Though he added that Bitcoin might never serve well as a general way of buying things due to&nbsp; its fluctuations, Wu noted that it could function as a store of value that a person can sell.



“Sure, Bitcoin will crash again, but over its lifetime, it has already withstood multiple crashes, runs and splits,” he wrote. “It actually feels tested.”



Wu did not immediately return Blockworks’ request for comment about the investments.



<h3 class="wp-block-heading">A fresh start</h3>



The White House adviser is currently on leave from his job as a professor at Columbia Law School, a role he has held since 2006. Wu has led an American antitrust resurgence in recent years by focusing on the growing power of the big tech platforms, <a href="https://www.law.columbia.edu/faculty/timothy-wu" target="_blank" rel="noreferrer noopener">according to his Columbia bio</a>. His tech breakup proposals formed a significant part of the 2020 presidential debate, it notes.



Wu was previously enforcement counsel in the New York Attorney General’s Office and worked on competition policy for the National Economic Council under President Barack Obama. He also worked in antitrust enforcement at the Federal Trade Commission.&nbsp;



The news of Wu’s cryptocurrency ownership comes after former President Donald Trump told the Fox Business Network on Monday that bitcoin “seems like a scam.”



SEC Commissioner Hester Peirce said <a href="https://cms.blockworks.co/a-biden-administration-is-a-good-time-for-a-fresh-start-on-crypto/" target="_blank" rel="noreferrer noopener">during a Blockworks webinar earlier this year</a> that a new White House administration would provide a “good time for a fresh start” on how regulators approach digital assets. A frequent dissenter to SEC rulings that<a href="https://www.sec.gov/news/public-statement/peirce-dissenting-statement-34-88284" target="_blank" rel="noreferrer noopener"> block bitcoin-related funds from entering the market</a>, Peirce highlighted incoming SEC chair <a href="https://mitsloan.mit.edu/faculty/directory/gary-gensler" target="_blank" rel="noreferrer noopener">Gary Gensler</a>’s experience in the crypto industry.



The US Senate Banking, Housing and Urban Affairs Subcommittee on Economic Policy <a href="https://www.banking.senate.gov/hearings/building-a-stronger-financial-system-opportunities-of-a-central-bank-digital-currency" target="_blank" rel="noreferrer noopener">has a hearing scheduled</a> for June 9 to discuss opportunities of a central bank digital currency.

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