Reelected Miami mayor to take 401k retirement savings partly in Bitcoin

Miami Mayor Francis Suarez also receives a part of his salary in Bitcoin with the help of a third-party payment processor Strike.

The long-standing mayor of Miami Francis Suarez has now announced plans to take a part of his 401(k) payout in Bitcoin (BTC) just a month after he started receiving salary in BTC. 

Soon after becoming the first United States lawmaker to accept a part of his salary in Bitcoin, Suarez wants to dedicate a part of his retirement savings to Bitcoin based on “a personal choice,” he said in an interview with Real Vision:

“I just think it is a good asset to be invested in. I think it’s one that’s obviously going to appreciate over time. It’s one that I believe in.”

Suarez highlighted that Bitcoin’s success is tightly tied to the confidence in the system, which is inherently an “open-source, un-manipulatable system”. The mayor revealed that he has started receiving salary payments in Bitcoin through the help of a third-party payment processor Strike.

The mayor also shared that the city government accepts fee payment in Bitcoin from Miami residents. While the Mayor explores the various options for enabling the Bitcoin payments for retirement savings, Suarez is certain to establish a relevant system by 2022.

Related: Miami will hand out free Bitcoin to residents from profits on city coin

In an effort to further drive Miami’s Bitcoin adoption drive, Mayor Suarez announced on Nov. 12 to give Bitcoin yield as a dividend directly to every eligible Miami resident.

As Cointelegraph reported, the city of Miami will divide and distribute the BTC yields to residents earned by staking its in-house cryptocurrency, MiamiCoin, which was initially launched by Citycoins to fund municipal projects by generating yield. In a bid to transform the city into a major cryptocurrency hub, Suarez said:

“We’re going to create digital wallets for our residents. And we’re going to give them Bitcoin directly from the yield of MiamiCoin.”

Point of no return? Crypto investment products could be key to mass adoption

Cryptocurrency investment products could be a missing piece of the puzzle towards mass adoption, and are now becoming increasingly more common.

The first Bitcoin (BTC) futures exchange-traded fund (ETF) was launched in the United States back on October 19, 2021. Since then, a number of other cryptocurrency investment products have been launched in various markets.

That first ETF, the ProShares Bitcoin Strategy ETF, quickly became one of the top ETFs of all time by trading volume on its debut, and soon after, several other Bitcoin futures ETFs were launched in the United States, providing investors with different investment options.

To Martha Reyes, head of research at cryptocurrency trading platform Bequant, these options are important. Speaking to Cointelegraph, Reyes pointed out that in traditional finance, ETFs have “proved to be incredibly popular in recent years, with ETF assets expected to reach $14 trillion by 2024.”

Reyes said that investors who have been on the sidelines of the market may now choose to invest in cryptocurrencies if they prefer the “low cost, flexibility and convenience [of ETFs], especially as they then do not have to custody the crypto themselves.”

Custodying crypto assets, Reyes said, can prove a “technical barrier to some non-crypto natives.” The launch of crypto ETFs may offer investors the type of diversification they want in their portfolios through crypto, although some may want to access the market “via baskets reflecting different trends in this rapidly evolving market.” She added:

“Others prefer to be more hands on or have a combination of strategies. The important thing is that investors have options.”

Several options have, in fact, been launched over the last few weeks. United States-based firm WisdomTree has listed its cryptocurrency exchange-traded product (ETP), Crypto Mega cap Equal Weight ETP, on Euronext exchanges in Paris and Amsterdam.

Trading under the ticker symbol MEGA, the product is backed by physical cryptocurrencies including Bitcoin and Ether (ETH) and is rebalanced quarterly. WisdomTree also launched its WisdomTree Crypto Market (BLOC) and WisdomTree Crypto Altcoin (WALT) ETPs in Europe.

Similarly, in December, Bitcoin Capital AG released two ETPs on the SIX Swiss Exchange, offering investors exposure to Bitcoin and Ether. These products are actively managed by FICAS AG and are available to institutional, professional and private investors.

These products have so far been successful and more options are being launched on a regular basis, effectively boosting investors’ options in the market. To some experts, these products are part of the next step cryptocurrencies need to take to be widely adopted.

Investment products and adoption

To Reyes, participation in these investment products is so far “primarily institutional,” especially in countries like the United States in which only futures products are trading. She said that retail investors “are cognizant of the added rollover costs of a future versus a spot ETF, meaning underperformance versus the underlying.”

Reyes added that for “wide retail participation, we would probably need to see a spot product.”

Speaking to Cointelegraph Sui Chung, CEO of FCA-regulated crypto indices provider CF Benchmarks, said that cryptocurrency investment products are “significant drivers of mass adoption,” and while the firm would “like to see a wider choice of avenues” the impact of these products could still be significant:

“We shouldn’t underestimate the impact these products have in bringing new investors and capital to crypto assets and how this can accelerate long-term adoption.”

Karan Sood, CEO and managing director at Cboe Vest, an asset management partner of Cboe Global Markets, told Cointelegraph that increased participation from a diverse set of investors is “good for the market,” as it “increases liquidity and helps build out the market infrastructure.”

Sood said that before investing, investors should review their possibilities carefully as some products were initially launched to provide investors access to the cryptocurrency market, while others “try to provide a solution to Bitcoin’s extreme volatility problem.”

According to Sood, volatility is “endemic to the crypto asset space,” and sell-offs in which Bitcoin and other crypto assets lose over half of their value are fairly common, so much so that drops of over 20% are to be expected. He added:

“However, what is new is the availability of funds that allows investors to access Bitcoin exposure with strategies designed to reduce the impact of severe sustained declines.”

These funds, he said, take the “managed volatility set of investment strategies extensively used in conventional asset classes” and apply them to Bitcoin futures to protect investors against the cryptocurrency’s volatility.

This volatility is believed to be keeping some institutional investors on the sidelines and stopped regulators like the U.S. Securities and Exchange Commission (SEC) from finding ways to properly protect investors and accommodate for the innovation in the space.

To Chung, the cryptocurrency market has matured to the point there are now “core” exchanges like Coinbase and Kraken that ensure fair and manipulation-free trading, so market manipulation should not be a problem. Regulated products are, nevertheless, preferable for institutions and more conservative investors.

Considering the lack of a spot Bitcoin ETF in the U.S. and the disadvantages of futures-based products mentioned by Reyes above, retail investors are left either gaining exposure from other markets or buying crypto directly. These options are, nevertheless, not optimal for some.

Early stages for crypto investment products

Buying cryptocurrencies on the spot market has been the go-to strategy for most crypto investors over the last few years, but more conservative investors who may want to diversify their portfolios may be uncomfortable with the lack of regulation in the market.

As Cboe Vest’s Sood put it, when compared to the “trading and custody infrastructure that exists for conventional assets such as stocks, bonds and funds, there is little in the form of regulation.” This lack of regulation, he said, has been “exemplified by the persistent news about the loss of keys, hacking of systems and fraud in trading in crypto assets.”

Bitcoin futures investment products operate under the Commodity Futures Trading Commissions’ regulations, while mutual funds with exposure to Bitcoin are actively managed by regulated entities with a rich history of providing strong investor protections.

Taking into account these differences, Sood pointed out that “unless there is a change in the regulation of spot Bitcoin, there is a sound basis for BTC futures-based investments but not for spot-based investments.”

Notably, spot Bitcoin ETFs are available in various jurisdictions. In December, Fidelity Canada launched one such product called the Fidelity Advantage Bitcoin ETF. It trades on the Toronto Stock Exchange and is denominated both in Canadian and United States dollars.

Sood said that regulations in the U.S. may be a burden for investment product manufacturers but have “delivered substantial value and protections to U.S. investors over the years.” These protections, he said, have “stood the test of time over decades” and, as such, investors should opt for products regulated in the country if possible. 

While futures-based investment products may not be optimal for retail investors, Sood argued that some sophisticated products have been launched to offer investors the cryptocurrency exposure they may be looking for. He concluded:

“Investing in funds overseas may expose U.S. investors to undue unique risks and tax burdens.“

Bequant’s Reyes pointed out that cryptocurrency ETFs have less than $20 billion in assets under management across 50 products, which means we are “still in the early stages of the adoption” of these products.

Nevertheless, she sees the approval of a futures ETF and rejection of a spot ETF as “inconsistent,” as in other jurisdictions, spot ETFs are already being traded. Making matters worse, a futures product “primarily benefits institutional investors as it is too expensive for individual investors.

Grayscale Investments has notably fired back at the SEC for rejecting VanEck’s spot Bitcoin ETF application, issuing a letter arguing the SEC is wrong to reject such products after approving several Bitcoin futures ETFs.

CF Benchmarks CEO Sui Chung said that while futures products are regulated instruments with oversight from the CFTC, it “isn’t so clear cut for spot Bitcoin,” and the SEC has a challenge in balancing its enforcement mandate with what U.S. investors want.

However, Chung noted that Bitcoin futures ETFs have already “sparked an irreversible change” as they are available “to every single member of the investing public in the world’s deepest capital market.”

Markets, he said, haven’t experienced significant disruptions and “the sky hasn’t fallen in,” meaning that we “have passed the point of no return.” To Chung, firms who can offer investors ETFs that can help diversify and grow their portfolios “will be the winners.”

Making crypto more accessible

A Bitcoin spot ETF could make cryptocurrencies more accessible but to the above experts, the crypto ETF is about more than a product with physical exposure — it’s about making cryptocurrency exposure more accessible.

To Reyes, futures ETFs trading in the U.S. are a “trial run in eventually approving a spot ETF.” Such an ETF, she concluded, would be greatly beneficial:

“A spot Bitcoin ETF would fuel mainstream retail adoption of Bitcoin further. Some investors prefer the ease of accessing the market this way rather than through dedicated crypto exchanges.”

Reyes welcomed regulation, noting that the more regulated fiat-to-crypto on-ramps there are the better, as these platforms can help signal regulatory concerns are easing, further driving up demand for cryptocurrencies.

Chung said that cryptocurrency investment products can lead to mass adoption by ensuring that investors deal with less friction when entering the market, as it may be easier to buy an ETP via an existing brokerage account than to open an account at a cryptocurrency trading platform:

“We don’t want to be dogmatic about how people invest and learn about crypto and its possibilities, our job is simply to open up as many avenues as possible and drive adoption.”

While it isn’t clear when the SEC will approve a Bitcoin spot ETF or whether existing solutions are enough for more conservative investors to make a move, new investment products are making it easier for investors to gain exposure to the space.

Over time, the trend should continue and new products will launch, allowing cryptocurrencies to fully develop in the market as a new asset class that could help hedge against inflation or economic downturns.

Crypto market eyes recovery ahead of key US inflation data release

The Asia Pacific and European markets slide in caution ahead of key U.S. inflation data.

Growing inflation has become a mounting concern for nations around the world, especially the United States. 

The U.S. has seen one of the sharpest rises in consumer inflation over the past year. Lawmakers around the globe have claimed that they didn’t see the inflation coming, but people often draw their attention towards the seeming unrestricted money printing spree throughout the pandemic.

The U.S. has printed 35% of the total U.S. dollar in circulation in 2021 alone which has played a key factor in record-breaking inflation. Market pundits expect a 6% rise in the consumer price index (CPI) in November, which would be the highest in four decades. 

Statistics on the CPI are scheduled to release on Dec. 10.

The Biden administration has said that the $1.85 trillion spending program and tax cuts would slow down the effects of inflation, but experts have been skeptical about the idea of printing more money.

Real M1 money stock 1959-2021. Source: Federal Reserve Bank of St. Louis

Asian Pacific and European markets opened with caution and recorded a broad decline across the board. Japan’s Nikkei 225 declined 1% to 28,437.77. South Korea’s Kospi fell 0.64% to 3,010.23 while the Kosdaq was down 1.1% at 1,011.57. Pan European stock index STOXX 600 was down 0.4% while technology, retail, and healthcare stocks also recorded a loss.

The Asia Pacific markets Dec. 10, 2021. Source: CNBC

The crypto market saw a minor bounce back from last night, contrary to the common decline in traditional markets. Bitcoin (BTC) price recovered above $48,400 after falling to a daily low of $47,358 while Ether (ETH) also recovered above $4,100 after recording a daily low of $4,026. The overall crypto market cap climbed above $2.25 trillion.

With rising inflation and omicron variant inducing panic in the traditional markets, Bitcoin can rise again as the inflation hedge.

Robert Kiyosaki, the author of “Rich Dad Poor Dad” and a businessman himself warned of the incoming market “crash and depression” due to the “fake inflation.” Kiyosaki blamed the Feds and the Biden administration for pushing the fake inflation on people.


US lawmaker purchases exposure to Bitcoin through Grayscale shares

Congressperson Marie Newman bought between $15,001 and $50,000 of GBTC in addition to up to $215,000 in Coinbase Global’s COIN shares.

Illinois Representative Marie Newman has disclosed she purchased up to $50,000 in exposure to crypto through shares of Grayscale Bitcoin Trust.

According to a financial disclosure report filed with the U.S. House of Representatives on Wednesday, Congressperson Newman bought between $15,001 and $50,000 of GBTC between Nov. 9 and last Saturday. In addition, she conducted four separate purchases of shares of Coinbase Global’s Class A stock between November and December, up to $215,000.

Section of Illinois Representative Marie Newman’s financial disclosure report for 2021

Members of the U.S. House of Representatives and Senate are permitted to buy, sell and trade stocks and other investments while in office but are also required to report such transactions of more than $1,000 within 30 to 45 days. This reporting is in accordance with the Stop Trading on Congressional Knowledge Act, or STOCK Act, passed in 2012 under President Barack Obama with nearly unanimous approval in both chambers of Congress. 

According to data gathered from financial disclosure reports by Bitcoinpoliticians.org, six other members of Congress currently hold cryptocurrency or some exposure to crypto assets, including Wyoming Senator Cynthia Lummis, Texas Representative Michael McCaul, Pennsylvania Representative Pat Toomey, Alabama Representative Barry Moore, New Jersey Representative Jefferson Van Drew, and Florida Representative Michael Waltz. However, many federal judges and lawmakers have reportedly flouted the STOCK Act by not disclosing certain investments.

Related: Pro-crypto senator Cynthia Lummis discloses up-to-$100K BTC purchase

The disclosure report from Newman comes following members of Congress questioning CEOs of major stablecoin issuers and crypto firms in a hearing to better understand the technology and where a regulatory path may lead. Progressive lawmaker Alexandria Ocasio-Cortez also recently spoke out on social media, saying it was inappropriate for her to hold Bitcoin (BTC) or other digital assets because lawmakers have access to “sensitive information and upcoming policy” and such investments could affect their impartiality.

UK politicians say cryptocurrency is ‘not an investment’

The head of the FCA said the agency is expecting new powers for regulating crypto advertisements.

Members of Parliament (MPs) in the United Kingdom have called upon the Financial Conduct Authority (FCA) to limit the use of the word “invest” and “investment” by cryptocurrency firms for promotional purposes.

According to a Thursday report in The Times, MPs at the treasury select committee told FCA chief Nikhil Rathi that the use of the phrase “your investment” often portrays that these are on par with an FTSE 100 company or a unit trust, thus giving the wrong impression about the type of investment. Harriett Baldwin, Conservative MP for West Worcestershire took special exception to FCA’s supposed inability to stop fraudulent promotions and went on to accuse them of helping criminals:

“Your website actually publishes a list of unregistered crypto-asset businesses for anti-money laundering purposes. It’s meant to be helpful but it could also be helpful to someone who just wants to launder money.”

Rathi assured that the regulatory body is currently looking into the matter and also expecting new powers in terms of regulating crypto advertisements. However, unless those new powers come into practice, there isn’t much that the chief regulatory body can do.

“We’ll have a discussion about what the wording should be,” said FCA chief.

Earlier, FCA chairman Charles Randell had expressed concern over the wordings of the Floki Inu advertisement on London buses but admitted nothing much can be done beyond cautionary warnings for consumers.

The FCA chief also said that the agency is considering dismissing any requests for compensation under the Financial Services Compensation Scheme if people lose money in cryptocurrencies: 

“Personally, I would suggest we simply say that anything crypto-related should not be entitled to compensation so that consumers are clear about that when they are investing.”

Related: UK FCA will spend £11M to warn people about investing in crypto

In July 2021, the Advertising Standards Authority in the U.K. issued a red alert against deceptive crypto advertising and warned consumers to be wary of such ads.

Apart from the U.K., India is another country where authorities have had to get involved over the lack of disclaimers in crypto advertisements. The Delhi High Court recently issued a notice to bring standardized disclaimers for crypto advertisements.

Puerto Rico wants to combat corruption with blockchain technology

A mayor in Puerto Rico pleaded guilty to accepting a bribe of more than $100,000 in cash last week.

Following another corruption scandal, the government of Puerto Rico is reportedly seeking to improve its anti-corruption efforts by adopting blockchain technology.

Puerto Rican House Speaker Rafael “Tatito” Hernandez announced that lawmakers will hold meetings with local blockchain enthusiasts this month to discuss the potential adoption of blockchain technology to reduce corruption.

The implementation of blockchain and smart contracts could bring more transparency and accountability to the public sector, the official said at a Puerto Rico Blockchain Trade Association conference, Bloomberg reported on Dec. 6.

“We have a real credibility problem and this might be part of the solution,” Hernandez said, adding that there is also a broader effort to make Puerto Rico a hub for crypto and blockchain innovation. According to the official, the emerging industry could be a way for the bankrupt commonwealth to revive its economy.

“Back in the 60s and 70s we had the niche of manufacturing. […] This is a new niche, a new opportunity to create jobs,” Hernandez said.

The speaker’s comments came amid growing corruption concerns in Puerto Rico as a local mayor reportedly pleaded guilty to accepting more than $100,000 of bribes in cash last week.

Puerto Rico is not alone in exploring the potential anti-corruption capabilities of technologies like blockchain and digital currency. Last year, the Ministry of Foreign Affairs of Denmark reported on blockchain’s potential to fight administrative and political corruption. The United Nations’ drugs and crime agency also advised Kenya to use blockchain to combat government corruption in November 2020.

Related: Gibraltar’s government plans to bridge the gap between public and private sectors with blockchain

While multiple jurisdictions are looking at cryptocurrencies’ underlying technology as a tool to cut corruption, some governments like Russia prohibit its deputies and officials from holding crypto, citing corruption concerns.

One of the world’s most corrupt countries, Russia could in fact use crypto to reduce corruption, according to Maria Agranovskaya, a legal attorney and fintech expert in the Russian State Duma. Agranovskaya told Cointelegraph that cash is way more popular for illegal activity like corruption because it’s more difficult to trace:

“If you convey proper KYC and AML at the start, crypto flows can be much more easy to trace, only proper rules of the game should be in place.”

US is ‘unquestionably’ behind the curve on crypto ETFs, says Brian Brooks

Brian Brooks proposed regulators treat crypto in much the same way as traditional financial institutions rather than creating an entirely new body to create a single framework for digital assets.

Bitfury CEO and former Acting Comptroller of the Currency Brian Brooks has hinted the regulatory environment in the United States could drive many crypto firms outside the country, and has already stymied companies attempting to offer a variety of financial products.

Speaking at a Wednesday hearing on Digital Assets and the Future of Finance with the House Committee on Financial Services, congressperson Ted Budd said he feared the current policy of regulation by enforcement in the U.S. could “force the next generation of financial tech to be created outside of our country.” Speaking on behalf of Bitfury, Brooks said:

“There are some products that are legal in other countries and are just not legal here,” said Brooks. “One of the things that makes crypto risky is that consumers may not understand the difference between one token and another token, so they may want to diversify […] we don’t allow that in the United States — we do allow it in Canada, we allow it in Germany, Singapore, Portugal and a number of other places.” He added:

“If you’re a developer of [exchange-traded funds], there’s no fuzzy line, it’s super clear: You cannot do that here, so you have to go abroad.”

Bitfury CEO Brian Brooks addressing the House Committee on Financial Services on Wednesday

Brooks placed the lack of exchange-traded funds, or ETFs, in the U.S. on the Securities and Exchange Commission. Though the regulator has recently approved ETFs with exposure to Bitcoin (BTC) futures from investment managers ProShares and Valkyrie, it has yet to give the green light for BTC or other crypto ETFs. In contrast, many U.S. companies with operations in Canada have successfully applied with local regulators for ETFs with direct exposure to crypto. 

Related: More than 40 digital currency ETFs await US regulatory approval

However, the former OCC head suggested the lack of approval of crypto investment products was more of a result of the United States’ “fragmented approach to regulation,” given the number of bodies overseeing banks, finance and now digital assets. Brooks proposed a solution in which traditional financial institutions would be treated in much the same way as crypto.

“When I hear people talk about the idea that we need one regulator for crypto, I would say we should first have one regulator for banks, but we have three of them,” said Brooks. “The last thing we need to do is add another regulator to a system that’s already got dozens of regulators.

“If I’m a crypto lending platform, I should probably be regulated by the FDIC. If I’m a crypto trading platform, I should probably be regulated by the CFTC and SEC, but somehow we treat crypto, because it’s new, as different than everything else. I’m gonna argue that crypto is just a step function improvement in the system.”

CEOs from Circle, FTX, Bitfury, Paxos, Stellar Development Foundation and Coinbase Inc. are currently fielding questions from U.S. lawmakers on the state of digital assets in the country. Cointelegraph reported earlier on Wednesday that House representatives have expressed concerns over token projects exerting centralized control over many users’ assets. 

Discussion on crypto and major tech firms combine in hearing over decentralization of digital ecosystem

“The point of crypto is to have true decentralization — the projects that succeed will be the projects that achieve that,” said Brian Brooks.

Blaine Luetkemeyer, a House representative from Missouri, revisited the issue of major companies exerting control over vast swaths of the internet, something he expressed concerns about encroaching in the crypto space.

Speaking at a Wednesday hearing on digital assets with The House Committee on Financial Services, Luetkemeyer addressed Bitfury CEO and former acting Comptroller of the Currency Brian Brooks in saying that major tech firms including Instagram, Facebook — now Meta — and Twitter “control people on their platforms.” Luetkemeyer asked whether this level of control could extend to undue influence for the rollout of a digital dollar.

“The point of crypto is to have true decentralization,” said Brooks. “The projects that succeed will be the projects that achieve that. Bitcoin succeeded because there were literally millions of participants in the node network, and so there is no CEO of Twitter to deplatform you, there’s no CEO of JPMorgan to take away your credit card.”

Bitfurty CEO Brian Brooks addressing the House Committee on Financial Services on Dec. 8

The Bitfury CEO added that he believed companies unable to meet this standard would be relegated to the “ash heap of history” — that is, lose their relevance and largely be forgotten. In his written statement to the committee, Brooks implied that a decentralized internet would be better “than an Internet largely controlled by five big companies”:

“Crypto policy should take into account not only any new risks introduced into the system, but also the risks in the present system that are being solved by decentralization.”

Related: Bank of International Settlement calls the rise of decentralized finance ‘an illusion’ in latest quarterly review

For many of the lawmakers in attendance at the Digital Assets and the Future of Finance hearing, the goal seems to be gaining a greater understanding of the existing space rather than how they might be able to provide a clear regulatory framework for crypto and blockchain for the future. The six CEOs in attendance from Circle, Paxos, Coinbase Inc., Stellar Development Foundation, FTX and Bitfury have fielded questions including those on ransomware attacks, quantum computing and price volatility.

This story is developing and may be updated, as the House committee hearing is still ongoing.

Crypto CEOs request Congress provide regulatory clarity at hearing on digital assets

“We don’t need knee-jerk reactions by lawmakers to regulate out of fear of the unknown rather than seeking to understand,” said Representative Patrick McHenry.

The House Committee on Financial Services heard from several CEOs of major crypto firms in the United States, some of whom seemed to present a united front in urging lawmakers to provide a clear regulatory framework for crypto.

Speaking at a Wednesday hearing titled “Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States,” Circle CEO Jeremy Allaire, FTX CEO Sam Bankman-Fried, Bitfury CEO Brian Brooks, Paxos CEO Chad Cascarilla, Stellar Development Foundation CEO Denelle Dixon and Alesia Haas, chief financial officer of Coinbase and CEO of its U.S. subsidiary, told U.S. lawmakers about the challenges their companies faced as both stablecoin issuers and digital asset exchanges.

In a written statement released prior to the hearing, Allaire said Circle supported Congress’ efforts for “national licensing and Federal supervision” of stablecoin issuers, given many were now “too big to ignore.” Cascarilla seemed to echo this sentiment, describing the U.S. financial system as “inadequate” for handling the emerging digital economy, but blockchain technology may offer a possible solution:

“A blockchain-based financial architecture could settle trades on the same day, mitigate counterparty risk and eliminate the costly central clearinghouse,” said the Paxos CEO. “This would enable market participants and regulators to monitor and correct settlement and margin shortfalls in real time. We agree that shortening the trade settlement cycle should be a high priority for the SEC, and we are working aggressively to make that possible.”

Circle CEO Jeremy Allaire addressing the House Committee on Financial Services on Wednesday

Brooks added that there were already examples of companies involved in the digital asset space finding a more regulatory-friendly environment in other countries, such as Fidelity launching a Bitcoin (BTC) exchange-traded fund in Canada in the absence of the U.S. Securities and Exchange Commission’s approval of one.

“There is a reason why crypto talent is no longer concentrated in Silicon Valley, the birthplace of the original commercial Internet,” said Brooks. “Sure, some talent has merely moved from Silicon Valley to Miami — but a surprising number of talented founders have left for Portugal, Dubai, Abu Dhabi, Singapore, and other jurisdictions that are not at all unregulated but that have a more positive posture toward innovation and growth.”

Related: US lawmaker urges congressional action on crypto as government avoids shutdown

Addressing the panel of crypto CEOs, Representative Patrick McHenry argued the technology in the crypto space was “already regulated” but acknowledged that any existing framework could be “clunky” and “not up to date.” According to the North Carolina congressperson, a lack of understanding among his fellow committee members could risk overregulating crypto and blockchain:

“We need reasonable rules of the road, we know that. We don’t need knee-jerk reactions by lawmakers to regulate out of fear of the unknown rather than seeking to understand. And that fear of the unknown in the move to regulate before understanding will only stifle American ingenuity and put us at a competitive disadvantage.”

Still ongoing at the time of publication, the House committee hearing seeks to discuss four key aspects of the crypto space: exchanges, stablecoin offerings, regulatory concerns in digital assets, and federal regulatory responses. Lawmakers will also likely discuss decentralized finance, given its potential to “replicate and replace conventional delivery of financial services such as loans, asset trading, insurance, and other services.”

CIA director says agency currently has ‘a number of different projects’ focused on crypto

William Burns said that building knowledge on crypto was “an important priority” for the CIA, and he planned to devote “resources and attention” to it.

Current director of the Central Intelligence Agency William Burns said his predecessor at the government agency initiated projects focused on gathering intelligence on cryptocurrency.

Fielding a question on crypto at the Wall Street Journal CEO Council Summit on Monday, Burns said the CIA was looking to add expertise in cryptocurrencies and blockchain to its team of intelligence analysts in addition to communicating with industry experts. He said the challenges from the crypto space “could have enormous impact” on the United States given what he has already seen in ransomware attacks.

“My predecessor had started this,” said Burns, likely referring to the actions of former acting CIA director David Cohen. “[They] had set in motion a number of different projects focused on cryptocurrency and trying to look at second- and third-order consequences as well and helping with our colleagues in other parts of the U.S. government to provide solid intelligence on what we’re seeing as well.”

Screenshot from Wall Street Journal’s CEO Council Summit on Dec. 6

He added that building such knowledge on crypto was “an important priority” for the Agency, and he planned to devote “resources and attention” to it. The CIA director did not mention specifics on the direction the Agency planned to take in regard to fighting cyberattacks, but hinted it would aim to “get at the financial networks” for criminal groups using digital currencies for ransom. 

Burns, who assumed the director position in March, has seen hackers demand millions in crypto over an attack on Colonial Pipeline system in May, but also a task force from the U.S. government respond by recovering the majority of the lost funds. Michael Morrell, a former acting CIA director from 2012 to 2013, said “blockchain analysis is a highly effective crime fighting and intelligence gathering tool,” one underutilized by law enforcement agencies.

Related: CIA Has Had Keys to Global Communication Encryption Since WWII

There is no fixed term for a CIA director, meaning Burns will likely serve at the Agency at the pleasure of U.S. President Joe Biden. At the time of publication, Biden has yet to announce his picks to fill three empty seats on the board of governors of the Federal Reserve System.