Building trust in crypto with Jonathan Levin of Chainalysis
Nov 20, 2024
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Jonathan Levin, co-founder and CSO of Chainalysis, dives into the future landscape of cryptocurrency following the U.S. elections. He discusses the significant implications of Bitcoin's recent surge and the growing bipartisan attention on crypto regulations. Levin highlights the troubling trends in crypto-related crime and emphasizes the urgent need for trust and compliance in the industry. He also shares insights on blockchain's transparency in law enforcement and the promising future of stablecoins, showcasing how innovation can foster a safer crypto space.
The U.S. crypto landscape is poised for significant change post-election, potentially leading to clearer regulatory guidelines that encourage institutional participation.
As cryptocurrency expands into serious crimes like ransomware and human trafficking, law enforcement must adapt and enhance cooperation to address these emerging challenges.
Deep dives
Potential Changes in Crypto Regulation
The U.S. crypto landscape may undergo significant shifts following the recent electoral changes, particularly in light of President-elect Donald Trump's critical stance towards SEC Chair Gary Gensler. As enthusiasm around cryptocurrency surged, with Bitcoin reaching over $90,000, there’s speculation about the repeal of restrictive regulations that currently hinder innovation. Many are optimistic about a bipartisan push for clearer regulatory guidelines that could help establish a solid framework for cryptocurrency operations, moving away from a regulation-by-enforcement approach. This anticipated clarity may bolster participation from major financial institutions, such as HSBC, in custodying cryptocurrencies in compliance with federal laws.
The Broader Implications of Crypto in Crime
Cryptocurrency has extended its presence beyond typical cyber crimes and is increasingly associated with various illegal activities, including ransomware attacks, human trafficking, and drug trade. Notably, Chainalysis has observed that cryptocurrencies now frequently appear in counterintelligence operations and other serious criminal cases. As traditional crimes evolve to incorporate digital currencies, law enforcement agencies are adapting their strategies to address these emerging patterns through thorough investigation and compliance tools. This cross-disciplinary approach highlights the necessity for enhanced cooperation between different governmental agencies to effectively combat the multifaceted nature of crypto-related crime.
Future Trends in Cryptocurrency and AI
The future of cryptocurrency appears promising, particularly with the anticipated rise of stablecoins for mainstream payments and the integration of AI technologies. As firms increasingly recognize the operational benefits of using stablecoins for cross-border transactions, this trend is expected to accelerate in the coming years. Furthermore, AI's potential in optimizing cryptocurrency processes and enhancing security is being explored, with some companies developing infrastructure for AI agents capable of managing transactions autonomously. These developments suggest a transformative shift in how both individuals and businesses interact with cryptocurrency and each other, creating new efficiencies and opportunities in the financial landscape.
Late last week, U.S. Securities and Exchange Commission chair Gary Gensler said that he was “proud to serve” the agency, which some are taking as a hint at an upcoming resignation. Gensler has faced heavy criticism for his crackdown on crypto, including a recent lawsuit from 18 states, and is likely to be replaced under President-Elect Donald Trump who has vowed to oust Gensler. On Tuesday, the Wall Street Journal reported that Trump is meeting with Brian Armstrong, the CEO of crypto exchange Coinbase, to discuss potential personnel appointments.
Today on Equity, we're bringing you an interview between Rebecca Bellan and co-founder and CSO of blockchain analysis firm Chainalysis, Jonathan Levin. The pair caught up at our Strictly VC event in New York shortly before the Gary Gensler news dropped to discuss:
The imminent change for crypto in the wake of the US election
Trends in crypto crime
Chainalysis’s choice to run its operations in the US
How to build trust in crypto
Equity is TechCrunch’s flagship podcast, produced by Theresa Loconsolo, and posts every Wednesday and Friday.
Subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts. You also can follow Equity on X and Threads, at @EquityPod. For the full episode transcript, for those who prefer reading over listening, check out our full archive of episodes over at Simplecast.
Credits: Equity is produced by Theresa Loconsolo with editing by Kell. Bryce Durbin is our Illustrator. We'd also like to thank the audience development team and Henry Pickavet, who manages TechCrunch audio products.
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