Ben Strack

Brian Brooks, a former regulator, has joined the board of directors at Hashdex, a crypto asset manager. This appointment represents another instance of a former regulator becoming an adviser to a crypto firm.



Brian Brooks has previously held similar positions after his tenure as the acting US comptroller of the currency from May 2020 to January 2021. As an independent bureau of the US Department of Treasury, the Office of the Comptroller of the Currency (OCC) ensures national banks are complying with various laws.&nbsp;&nbsp;&nbsp;



<a href="https://blockworks.co/news/brian-brooks-resigns-as-binanceus-ceo">Brooks was the CEO of Binance.US</a> for several months in 2021 before becoming the CEO of bitcoin mining company Bitfury that October. He later <a href="https://blockworks.co/news/bitfury-ceo-brian-brooks-joins-board-of-voyager-digital">joined the board of Voyager Digital</a> in December 2021 as an independent, non-executive director.



Brooks said in a statement at the time of joining Voyager that he would help the firm in “building out the platform for global scale and navigating the regulatory environment in the US and beyond.” But <a href="https://blockworks.co/news/voyager-files-for-bankruptcy-days-after-freezing-withdrawals">the company filed for bankruptcy</a> roughly seven months later.



Now, as a strategic adviser to Hashdex, Brooks is set to sit on the council representing Valor Capital Group — an investor in Hashdex for which Brooks is a partner. He will help the firm bridge the gap between the crypto ecosystem and traditional finance, the company said Thursday.&nbsp;



Hashdex CEO Marcelo Sampaio added in a statement that “his proven ability to push forward thoughtful, innovation-driven public policy is much needed at this time.”



The Brazil-based firm <a href="https://blockworks.co/news/hashdex-btc-etf-feasible-2023">offers a bitcoin futures ETF in the US</a> and <a href="https://blockworks.co/news/hashdex-expands-offerings-to-eu-in-latest-crypto-etp">expanded to the European market for the first time in April</a>.&nbsp;



<h2 class="wp-block-heading">Ex-SEC and CFTC leaders, former lawmakers now advising</h2>



Other crypto firms have filled advisory and executive roles with former regulators in the absence of a comprehensive crypto framework in the US.&nbsp;&nbsp;



Read more: <a href="https://blockworks.co/news/america-lagging-crypto-regulation">Is the World Leaving America Behind on Crypto Regulation?</a>



Jay Clayton, who was chair of the SEC from May 2017 to December 2020, joined the advisory board of crypto custody provider Fireblocks in August 2021.&nbsp;



He was brought aboard to “navigate evolving market and regulatory dynamics affecting the development and deployment of solutions for the emerging digital asset infrastructure,” Fireblocks said in a news release at the time.&nbsp;



Clayton also became an adviser to crypto venture capital firm Electric Capital in August 2022. Kevin Warsh, a member of the Federal Reserve Board of Governors between 2006 and 2011, joined the company as an adviser at the same time.&nbsp;



The former SEC chair is <a href="https://blockworks.co/news/sec-conflicts-of-interest-case">among those targeted by Empower Oversight</a> for allegedly having possible ties to crypto while regulating the space. Clayton <a href="https://blockworks.co/news/former-sec-chairman-turned-crypto-advisor-defends-move-to-private-sector">told Blockworks last year</a> he didn’t expect to be involved with crypto companies after he left the commission.



Clayton said during an interview with CNBC in April that <a href="https://blockworks.co/news/jay-clayton-ether-sec-security">crypto tokens deemed securities today might not be in the future</a> — comments seeming to further complicate <a href="https://blockworks.co/news/brian-armstrong-sec-cftc-war">a turf war of sorts</a> between the SEC and the Commodity and Futures Trading Commission (CFTC).&nbsp;



Ex-CFTC officials have also entered crypto advisory roles in recent years.&nbsp;



Chris Giancarlo, CFTC chair from August 2017 to July 2019, became a strategic adviser to crypto investment firm CoinFund in January 2022.&nbsp;



He is also in advisory and director roles at Nomura, Digital Asset, the Chamber of Digital Commerce and Baton Systems, according to his LinkedIn <a href="https://www.linkedin.com/in/j-christopher-giancarlo-77257111/details/experience/">profile</a>.&nbsp;



Former CFTC Commissioner Dawn Stump has been a strategic adviser for Solidus Labs since last August — joining Giancarlo and Brooks, as well as former SEC Commissioner Troy Paredes; ex-LabCFTC Director Daniel Gorfine; and Clara Chiu, a former innovation and licensing leader at the Hong Kong Securities and Futures Commission.



More recently, Heath Tarbert — a former acting under secretary for international affairs for the US Treasury Department and ex-chair of the CFTC — became chief legal officer and head of corporate affairs at stablecoin issuer Circle.&nbsp;



Former lawmakers have also gotten involved with crypto companies — including for Binance and Coinbase, exchanges <a href="https://blockworks.co/news/coinbase-binance-suits-different">sued by the SEC last month</a>.&nbsp;



Binance said last September <a href="https://blockworks.co/news/former-us-senator-will-chair-new-binance-global-advisory-board">its new advisory board would be led by Max Baucus</a>, an ex-Democratic senator from Montana who was US ambassador to China.



Coinbase tapped former Senator Patrick Toomey, R-Pa., for <a href="https://blockworks.co/news/coinbase-creates-advisory-board">its newly formed global advisory council</a>, as well as Tim Ryan and Sean Patrick Maloney — ex-Democratic US representatives for Ohio and New York, respectively.  



2020 Democratic presidential candidate Andrew Yang <a href="https://blockworks.co/news/latest-in-crypto-hiring-andrew-yang-to-advise-web3-focused-firm">began advising Web3 data startup Pool Data</a> last year.



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These former US regulators and lawmakers are advising crypto startups

Katherine Ross

Brian Brooks, the former CEO of Binance.US, was cited in a transcript linked to exhibit documents in the SEC’s case against Binance, BAM Trading, BAM Management and Binance CEO Changpeng “CZ” Zhao.



When discussing his role as head of Binance.US, Brooks said, “I did not work for Binance.com, that nobody at Binance.com was my boss, and that my role was to complete and highlight the corporate separateness. So when I talked to CZ, I considered myself to be talking to him in his role as board chair BAM Trading.”



“What became clear to me at a certain point was [that] CZ was the CEO of BAM Trading, not me…That wasn&#8217;t because Binance.com somehow controlled us, but again, he owns the vast majority of Binance.com so I put that aside,” he continued.



Brooks was the CEO of Binance.US from May 2021 to August 2021. In a deleted tweet, Brooks said that <a href="https://blockworks.co/news/brian-brooks-resigns-as-binanceus-ceo">he resigned because of</a> “differences over strategic direction.”



On Monday, the <a href="https://blockworks.co/news/binance-changpeng-zhao-face-sec-charges">SEC filed a lawsuit against Binance</a> with 13 charges, as well as allegations of fraud and commingling customer assets.&nbsp;



Among the charges, <a href="https://blockworks.co/news/binance-execs-unlicensed-securities-exchange">the filing quotes multiple unnamed Binance executives</a> as acknowledging that they were running Binance.com “as an unregistered securities exchange in the USA” and quoted Zhao as actively seeking ways to keep “VIP” customers.



“We don’t want to lose all the VIPs which actually contribute to quite a large number of volume. So ideally we would help them facilitate registering companies or moving the trading volume offshore in some way—in a way that we can accept without them being labeled completely U.S. to us,” he allegedly said in June 2019 during a “weekly meeting of senior Binance officials.”



Binance said it was “disheartened” and “disappointed” <a href="https://blockworks.co/news/binance-pushes-back-sec-lawsuit">with the SEC’s lawsuit and said</a>, “Most recently, we have engaged in extensive good-faith discussions to reach a negotiated settlement to resolve their investigations. But despite our efforts, with its complaint…the SEC abandoned that process and instead chose to act unilaterally and litigate.”



The SEC also <a href="https://blockworks.co/news/binance-us-sec-assets-freeze">filed a temporary restraining order</a> against Binance, BAM Trading and BAM Management — both of which supposedly oversee Binance.US separately from Binance.com.&nbsp;



The temporary restraining order, if granted, would seek to freeze the assets of BAM Trading and BAM Management.



Binance did not immediately respond to a request for comment.



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Ex-Binance.US CEO Says CZ Was ‘CEO of BAM Trading’: Court Docs

<div id="highlights-block_61e84de8f238a" class="highlights">
 <ul>
 <li>Blockchain Association’s Dave Grimaldi says he expects context around mining numbers that “sound scary,” discussion around collaborations</li>
 <li>Witnesses to testify include Bitfury CEO Brian Brooks, who spoke at last month’s hearing in front of the House Financial Services Committee</li>
 </ul>
 
</div>



Members of Congress are set to gather on Thursday for a hearing focused on the energy impacts of blockchains, marking the latest effort by lawmakers to learn more about the crypto space ahead of <a href="https://cms.blockworks.co/crypto-companies-brace-for-year-of-regulation-in-2022/">expected regulation</a> this year. The Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce will host the hearing, which is scheduled for 10:30 a.m. ET. A live stream of the hearing can be accessed below:



<hr class="wp-block-separator"/>



<iframe loading="lazy" width="560" height="315" src="https://www.youtube.com/embed/HWg731-3id8" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen=""></iframe>



<hr class="wp-block-separator"/>



<h3 class="wp-block-heading">What to Expect</h3>



Those set to testify are Ari Juels, professor at Cornell Tech; Soluna Computing CEO John Belizaire; Bitfury CEO Brian Brooks; Steve Wright, former CEO of Chelan County Public Utility District and Bonneville Power Administration; and Gregory Zerzan, a shareholder of business law firm Jordan Ramis PC.



“Most industries kind of emerge from a regulatory and legislative perspective over years — maybe even a decade or more,” said Dave Grimaldi, head of government relations at <a href="https://theblockchainassociation.org" target="_blank" rel="noreferrer noopener">Blockchain Association</a>.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“Crypto and blockchain have kind of burst onto the scene and are a trillion-dollar part of the economy and a big element of everyday lives for a lot of users, and that’s happened in probably two years.”</blockquote>



Grimaldi joined Blockchain Association — a group aiming to improve the public policy environment so that blockchain networks can thrive in the US — in November. He previously worked as the chief of staff for Federal Communications Commission (FCC) Commissioner Mignon Clyburn from 2010 to 2013. Prior to that, he had served as legislative counsel to then-US Rep. Ed Towns and senior counsel to Majority Whip James Clyburn.



Though the complexity of crypto and blockchain can be intimidating for lawmakers, Grimaldi explained, many members of Congress have shown a genuine desire to learn more.



The hearing comes after <a href="https://cms.blockworks.co/crypto-industry-will-move-offshore-if-congress-doesnt-act-executives-warn/" target="_blank" rel="noreferrer noopener">crypto company executives testified</a> in front of the House Financial Services Committee last month about the broader digital assets space. FTX CEO Sam Bankman-Fried said during the event that crypto technology can help make the financial system more equitable, while Brooks warned of crypto companies moving offshore if US regulators don’t act.&nbsp;&nbsp;&nbsp;



Grimaldi called the Dec. 8 event a “watershed hearing,” noting that most lawmakers seemed more interested in learning than making accusations.



“We thought that if there was going to be tough questions or scrutiny or demagoguery around crypto mining and climate, it would have happened then, and it didn’t,” he told Blockworks.



<h3 class="wp-block-heading">Focus shifts to energy</h3>



While the hearing last month covered a bunch of topics around digital assets and the future of finance, Thursday’s hearing is expected to focus more on the energy and environmental impacts of certain blockchains used in cryptocurrency mining.



“Members of Congress are generalists; they’re spread across 20 different things with barely any time in a day to be conversant in any of them,” Grimaldi said. “Deep-diving on them is helpful and puts sunlight on them. I hope that’s what Thursday is.”



A memorandum sent by House Committee on Energy and Commerce Chairman Frank Pallone (D-N.J.) to the Subcommittee on Oversight and Investigations cites <a href="https://digiconomist.net/ethereum-energy-consumption" target="_blank" rel="noreferrer noopener">an analysis by Digiconomist</a> indicating that the energy required to validate just one ether transaction could power a US home for more than a week. <a href="https://digiconomist.net/bitcoin-energy-consumption" target="_blank" rel="noreferrer noopener">Another</a> found that the energy required for a bitcoin transaction could power a home for more than 70 days.



However, <a href="https://hbr.org/2021/05/how-much-energy-does-bitcoin-actually-consume" target="_blank" rel="noreferrer noopener">industry experts point out</a> that use of a ‘per-transaction’ metric is misleading. In proof-of-work consensus blockchain networks like Bitcoin and Ethereum mainnet, the energy consumption is almost entirely related to issuance of new coins, and not the processing of transactions.



“Due to their broad adoption, cryptocurrencies are predicted to remain in use for the foreseeable future, raising questions about their rising energy consumption,” the memorandum states.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“Validation mechanisms that use less energy, such as Proof of Stake (PoS), exist, and demonstrate that exponential energy consumption is not necessary for cryptocurrencies to function.”</blockquote>



For example, when Ethereum merges its mainnet with the Beacon Chain (also known as Ethereum 2.0), becoming fully proof-of-stake, its energy consumption <a href="https://blog.ethereum.org/2021/05/18/country-power-no-more/" target="_blank" rel="noreferrer noopener">will plummet</a> by 99.95%.



The New York Times <a href="https://www.nytimes.com/interactive/2021/09/03/climate/bitcoin-carbon-footprint-electricity.html" target="_blank" rel="noreferrer noopener">reported in September</a> that bitcoin uses more electricity than many countries, a story that Grimaldi said likely helped spur lawmakers’ attention to this issue.&nbsp;



“If power consumption numbers are going to be discussed, I hope that they are explained in a way where a number that sounds eye-popping and a number that sounds too big is explained by the witnesses for what it is,” he said.



Grimaldi added that committee members will likely explore during the hearing how crypto miners can decrease energy usage if necessary and how they can be incented to do so. The head of government relations noted that he will also be listening for discussion around how municipalities, city governments and public utilities companies can partner with mining communities.&nbsp;&nbsp;



“There is not a gotcha element to this hearing,” Grimaldi explained. “I hope it’s open ears and open minds and open dialogue, and I think that’s a real possibility.”



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What to Expect From the House Energy and Commerce Hearing

<div id="highlights-block_61c0bd4a92d5e" class="highlights">
 <ul>
 <li>Brooks can assist Voyager as the company expands into NFTs, decentralized finance (DeFi) and the metaverse, Voyager Chairman Philip Eytan said</li>
 <li>The Bitfury CEO was one of six crypto firm executives to testify during a hearing of the House Committee on Financial Services earlier this month</li>
 </ul>
 
</div>



The former acting comptroller of the currency and current CEO of <a href="https://bitfury.com" target="_blank" rel="noreferrer noopener">Bitfury</a>, Brian Brooks, has joined <a href="https://www.investvoyager.com" target="_blank" rel="noreferrer noopener">Voyager Digital’s</a> board of directors to help the firm in its next phase of growth.&nbsp;



Brooks joins the board as an independent, non-executive director, according to the firm, and his appointment is effective immediately. 



“As one of only two publicly traded, crypto-first trading platforms, and with exponential funded account growth of 23 times this year, Voyager is already proven in the marketplace,” Brooks told Blockworks in an email. “The next challenge for the company, and one that I look forward to being part of, is building out the platform for global scale and navigating the regulatory environment in the US and beyond.”



Brooks became the CEO of Bitfury, a designer of mining application-specific integrated circuits (ASICs) and operator of mining data centers, in October. Before that, he was Binance.US’s CEO for several months, <a href="https://cms.blockworks.co/brian-brooks-resigns-as-binanceus-ceo/" target="_blank" rel="noreferrer noopener">but resigned in August</a>, citing “differences over strategic direction” in a Twitter post.&nbsp;



Prior to his stint at Binance, Brooks was acting comptroller of the currency. The 3,500-employee <a href="https://www.occ.treas.gov">federal agency</a> is responsible for chartering and regulating 1,200 national banks and federal savings associations, which comprise 70 percent of all banking activity in the US, Brooks wrote on his LinkedIn profile.



He added on the profile page that he “led federal efforts to modernize the national bank charter, expand the scope of marketplace lending partnerships, reform and modernize the Community Reinvestment Act, and define the scope of permissible cryptocurrency activities” while in the position.



Brooks also launched <a href="https://www.occ.gov/topics/consumers-and-communities/minority-outreach/project-reach-fact-sheet.pdf" target="_blank" rel="noreferrer noopener">Project REACh</a>, a partnership of large bank CEOs, fintech founders, minority deposit institutions and civil rights organizations dedicated to correcting barriers to financial inclusion for underserved Americans.



&#8220;Brian Brooks is extremely well versed in crypto, banking and in the legal and regulatory aspects of crypto,” Voyager Chairman Philip Eytan told Blockworks. “He can assist Voyager in the next phase of our growth around the globe, especially as we expand into NFTs, DeFi and the metaverse.&#8221;



Founded in 2018, Voyager offers a mobile app allowing users to trade about 70 crypto assets and earn rewards of up to 12% annually on more than 30 cryptocurrencies.



The firm <a href="https://cms.blockworks.co/voyager-digital-acquires-crypto-payment-platform-coinify/" target="_blank" rel="noreferrer noopener">announced in August</a> that it would acquire crypto payment platform Coinify to accelerate its international expansion and boost its capabilities in the payment space.



Voyager CEO Steve Ehrlich <a href="https://cms.blockworks.co/voyager-looking-to-enter-nft-space-in-2022-ceo-says/" target="_blank" rel="noreferrer noopener">said during an October earnings call</a> that the company intends to make NFTs on multiple platforms accessible to its users, which now totals more than 2 million.



The company also revealed last month that it was set to <a href="https://cms.blockworks.co/voyager-digital-to-debut-crypto-debit-card/" target="_blank" rel="noreferrer noopener">offer a crypto debit card</a>, which will go out to customers in early 2022.



<h3 class="wp-block-heading">Crypto regulation</h3>



Gary Gensler, chairman of the US Securities and Exchange Commission (SEC) <a href="https://cms.blockworks.co/gensler-says-centralized-regulation-is-path-for-crypto/" target="_blank" rel="noreferrer noopener">has said</a> in recent months that cryptocurrency companies and exchanges will not be able to operate outside of regulatory oversight for much longer.&nbsp;



Brooks was one of six crypto executives that <a href="https://cms.blockworks.co/crypto-industry-will-move-offshore-if-congress-doesnt-act-executives-warn/" target="_blank" rel="noreferrer noopener">testified during a hearing of the House Committee on Financial Services</a> earlier this month, which focused on digital assets and the future of finance.



The Bitfury CEO asked for more regulatory clarity around crypto at the hearing. He urged lawmakers to not only focus on micro questions, such as if a particular token is a security or not, but larger questions, such as whether big banks should be trusted more than open-source software as a tool for maintaining ledgers of account and allocating credit and capital.



“It is clear to me that the present financial system has plenty of examples of risk and costs and safety and soundness problems that are being addressed in the current system,” Brooks said at the time.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“Shouldn’t we take seriously the possibility that algorithms and open-source software that take a measure of human error, greed, negligence, fraud and bias out of the system might actually make the system better on net, even if there are some new risks being presented that need to be understood and regulated?”</blockquote>



In addition to his role as Binance.US, CEO and acting comptroller of the currency, Brooks has held senior positions within the financial industry including chief legal and risk officer at Coinbase, as well as general counsel and corporate secretary at mortgage loan company Fannie Mae.



<hr class="wp-block-separator">
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<hr class="wp-block-separator">

Bitfury CEO Brian Brooks Joins Board of Voyager Digital

Casey Wagner

<div id="highlights-block_61b1365be9bfa" class="highlights">
 <ul>
 <li>Executives from six major digital asset companies testified on the state of the industry before Congress Wednesday</li>
 <li>House Financial Services Committee members have different approaches to crypto</li>
 </ul>
 
</div>



As US policymakers continue to wrestle with how to regulate the growing digital asset industry, executives from major cryptocurrency companies appeared before Congress on Wednesday to provide, and request, clarity.&nbsp;



Rep. Maxine Waters (D-Calif.), head of the House Financial Services Committee, called the hearing, which was titled “Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the U.S.”



Rep. Patrick McHenry (R-NC) was one of several lawmakers that expressed a more favorable view of the emerging asset class.&nbsp;



“I ask my friends on the Hill, do you know enough about this?” he said, referring to his committee colleagues, whom he argued lacked enough understanding of the technology to be able to create regulation.&nbsp;



Bitfury <a href="https://cms.blockworks.co/brian-brooks-lands-as-ceo-at-mining-manufacturer-bitfury/" target="_blank" rel="noreferrer noopener">CEO</a> Brian Brooks, who formerly acted as comptroller of the currency under President Donald Trump, before a short <a href="https://cms.blockworks.co/brian-brooks-resigns-as-binanceus-ceo/" target="_blank" rel="noreferrer noopener">stint</a> at Binance.US, pleaded with lawmakers to look past the investment side of the industry.&nbsp;



Lawmakers must consider the innovation that blockchain technology can bring to governments, businesses and citizens, he said. The present financial system is not without risks, costs and safety problems, Brooks said.&nbsp;



“Shouldn’t we take seriously the possibility that algorithms and open-source software that take a measure of human error, greed, negligence, fraud and bias out of the system might actually make the system better, on net, even if there are some new risks being presented that need to be understood and regulated?” he asked the committee.&nbsp;



FTX CEO Sam Bankman-Fried noted that cryptocurrency technology can help solve many of the issues that Congress has already identified.



“When you look at the number of people who are underbanked or unbanked in the United States, and globally, it’s indicative of a system that does not work for everyone,” Bankman-Fried said. “Cryptocurrencies do provide a potential way to address a number of these issues, making it easier, cheaper, faster and more equitable for people to do what they need to do to manage their financial lives.”



Rep. Alexandria Ocasio-Cortez (D-NY) had doubts.&nbsp;



“What do you say to the folks that say, ‘This doesn’t seem like a new financial system per se but an expansion of the old one?’” she asked when questioning Jeremy Allaire, the CEO of payments company Circle, who spoke after Bankman-Fried.



“I really do believe we are building a new global economic infrastructure layer,” Allaire responded, adding that regulation needs to become more clear if policymakers want companies to continue innovating.&nbsp;



If the US does not act quickly enough, cryptocurrency firms are going to move to other nations with more favorable regulations, Brooks said, pointing to the lack of a bitcoin spot ETF. When a spot product is already available in other nations, there is nothing stopping issuers from taking their business elsewhere, he argued.&nbsp;&nbsp;



“There are some products that are legal in other countries and are just not legal here,” Brooks said. “If you’re a developer of ETFs there’s no fuzzy line, it’s super clear: You cannot do that here, so you have to go abroad.”



Other testifiers included Coinbase Global Chief Financial Officer Alesia Haas, Paxos CEO Chad Cascarilla and Stellar Development Foundation CEO Denelle Dixon.



A full recording of the hearing is available <a href="https://financialservices.house.gov/events/eventsingle.aspx?EventID=408705#LiveWebcast" target="_blank" rel="noreferrer noopener">here</a>.



<hr class="wp-block-separator has-css-opacity"/>



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Crypto Industry Will Move Offshore If Congress Doesn’t Act, Executives Warn

<div id="highlights-block_61b08d5a6c0b0" class="highlights">
 <ul>
 <li>Executives from Bitfury, Paxos, and Stellar Development Foundation will also testify at hearing of US House Committee on Financial Services</li>
 <li>Circle Co-founder Jeremy Allaire to recommend that “the US should aggressively promote the use of the dollar as the primary currency of the internet”</li>
 </ul>
 
</div>



Executives of some of the largest crypto companies in the world are set to testify before the US House Committee on Financial Services on Wednesday.



The hearing — called Digital Assets and the Future of Finance: Understanding the Challenges and Benefits of Financial Innovation in the United States — will feature testimony from FTX CEO Sam Bankman-Fried, Circle CEO Jeremy Allaire and Alesia Haas, the CFO of Coinbase Global.



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The other crypto firm leaders set to testify include Bitfury CEO Brian Brooks, Paxos CEO Chad Cascarilla and Denelle Dixon, the chief executive of Stellar Development Foundation.Though some might interpret the invitation as US legislators taking a hostile approach towards digital assets, it should rather be seen as a positive signal, said Mikkel Morch, executive director at crypto hedge fund <a href="https://urldefense.proofpoint.com/v2/url?u=https-3A__ark36.com_about-2Dus_-23our-5Fteam&amp;d=DwMF-g&amp;c=sWW_bEwW_mLyN3Kx2v57Q8e-CRbmiT9yOhqES_g_wVY&amp;r=FUTyxn_53i67ILzDMW5BFG24i77vq3UgLHm1MQBAppk&amp;m=F2xft-K7lbChauYoIcnSMDrgQHVZWAilDTCEYvi8Lnk&amp;s=4TvW1zxaA07sth7ycoEiAHuILYioqhRAnu0CpSFeqrU&amp;e=" target="_blank" rel="noreferrer noopener">ARK36</a>.



“Cryptocurrencies have been on the radar of top US politicians for a long time now, yet the Congress hasn&#8217;t yet decided to take any substantial regulatory action towards it,” Morch said.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“One should hope the committee is a sign that US congressmen and congresswomen are willing to learn more about this burgeoning and extremely innovative market sector before taking any action that could potentially cripple it.”</blockquote>



Martha Reyes, head of research at digital asset prime brokerage and exchange <a href="https://urldefense.proofpoint.com/v2/url?u=https-3A__bequant.io_&amp;d=DwMF-g&amp;c=sWW_bEwW_mLyN3Kx2v57Q8e-CRbmiT9yOhqES_g_wVY&amp;r=FUTyxn_53i67ILzDMW5BFG24i77vq3UgLHm1MQBAppk&amp;m=F2xft-K7lbChauYoIcnSMDrgQHVZWAilDTCEYvi8Lnk&amp;s=dowhZcTdB6r7C_aqJIkkDmqvYIufW4NNrBpEaluPZDk&amp;e=" target="_blank" rel="noreferrer noopener">BEQUANT</a>, said in an email that it is key for politicians to understand the implications of any crypto-related laws they may enact. She added that the hope is that the US becomes the first major crypto-friendly economy.



Morch said he doesn’t expect the US to follow China’s approach to crypto. The People’s Bank of China (PBOC) <a href="https://cms.blockworks.co/bitcoin-breaks-below-30000-on-china-concerns/" target="_blank" rel="noreferrer noopener">told the country’s key financial institutions</a> in June to block all cryptocurrency transactions, and its regulators have intensified a ban on bitcoin in recent months.



But, Morch added, he believes there will be tighter regulation related to stablecoins, noting that it is becoming more likely that the US government will seek to “severely restrict” what entities will be able to issue stablecoins.



Circle launched its stablecoin, USD Coin (USDC), in September 2018.



“In a world where money becomes a core feature of the internet, the US should aggressively promote the use of the dollar as the primary currency of the internet, and leverage that as a source of national economic competitiveness, security and a major upgrade needed for more efficient and inclusive financial services,” Allaire, Circle’s co-founder, said in <a href="https://www.circle.com/blog/circle-ceo-to-congress-u.s.-at-pivotal-moment-on-digital-assets" target="_blank" rel="noreferrer noopener">a blog post </a>published Tuesday.&nbsp;&nbsp;



Allaire will also be speaking about the expanding use cases for stablecoins across both institutional and startup businesses, according to a Circle spokesperson, including small business payments, international low-cost, high-speed remittances and efficient payments for remote workers.



“Even though the road will be a long one, the sector is hopeful that these Congressional meetings will make a difference in the long term,” Reyes said. “While this continues, players in the industry such as ourselves must continue to act with clients&#8217; best interests at heart and aim to become recognized and regulated in other jurisdictions while the US decides how it will move forward.”



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<h3 class="wp-block-heading">Watch Replay</h3>



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Blockchain Industry Executives Set to Testify Before Congress

<div id="highlights-block_61a7ecd079714" class="highlights">
 <ul>
 <li>Former CFTC Chairman Giancarlo thinks that regulators need to let markets determine value on their own </li>
 <li>Two former US regulators agree that the way we are thinking about crypto regulation today may be misguided </li>
 </ul>
 
</div>



It is not up to regulators to determine which asset classes or securities are legitimate, according to Christopher Giancarlo, former chairman of the Commodity Futures Trading Commission (CTFC) and senior counsel at Willkie Farr &amp; Gallagher.&nbsp;



Giancarlo was joined by Brian Brooks, CEO of Bitfury Group and Former US Acting Comptroller Of The Currency for a keynote discussion at the <a href="https://www.youtube.com/watch?v=9uEXKptMYhM" target="_blank" rel="noreferrer noopener">Digital Asset Compliance &amp; Market Integrity Summit</a> in New York Wednesday. Both former regulators believe there are issues with the current approach to digital asset industry oversight.&nbsp;



Giancarlo was leading the CFTC, the regulatory body that oversees derivatives markets in the US, during the bitcoin rally of 2017. The Commission was approached by two main operators, the Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange (CBOE) about launching bitcoin futures that year.&nbsp;



“It was remarkable how much pressure the commission faced to stall or stop those self-certifications of bitcoin futures, and it wasn&#8217;t just regulators, although there was a healthy dose of regulators in the US and abroad that were calling us saying ‘do not let this go forward because you are legitimizing bitcoin,’” Giancarlo said. “But it was the industry itself, a lot of legacy providers in the industry.”&nbsp;



Various banks and traditional financial institutions were against the approval of bitcoin futures trading at the time, Giancarlo said. The argument that bitcoin should not be validated was troubling to the former chairman.&nbsp;



“It was that notion of ‘if you do this, you’re legitimizing bitcoin’ that kept coming into my mind,” Giancarlo said. “It&#8217;s not for me as an unelected bureaucrat to legitimize a legal activity, it is for the market to determine what is legitimate. And the only way the market could do that is if we let this go forward.”&nbsp;



Brooks echoed Giancarlo’s sentiment. It is not up to any regulatory body to pick the winners and losers of Web3, he said.&nbsp;



“We don&#8217;t ask the SEC to make a judgement about whether Teslas or Buicks are better vehicles,” Brooks said. “We let the market decide that.”&nbsp;



Not long after bitcoin futures trading was approved, Giancarlo was summoned to appear before the Senate Banking Committee to testify about bitcoin. In his prepared opening statement, Giancarlo discussed how younger generations were becoming excited about this new, emerging asset class.&nbsp;



“I think we owe it to this generation to respect their interest in crypto, not with disdain and dismissiveness but with a real ‘let&#8217;s get it right’ approach,” he said. “Let&#8217;s spend the time, let&#8217;s dig into this.”&nbsp;



A key point of resistance both regulators have been met with when it comes to digital assets is the argument that cryptocurrencies have no use case. Brooks argues that it is not up to officials to judge how a technology might be used.&nbsp;



“There was this idea that we can&#8217;t allow [crypto] to happen until somebody can show us a use case. That is the problem I was trying to solve,” Brook said. “We don&#8217;t actually have to know a use case, that&#8217;s not the role of government in a market economy. The role of the government is to create a set of risk protection guardrails and allow markets to decide what&#8217;s valuable.”



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Former CFTC Chairman: Let Markets Decide Bitcoin’s Value

Sam Reynolds

<div id="highlights-block_6184f79c04499" class="highlights">
 <ul>
 <li>Brian Brooks resigned as CEO of Binance.US in August, and was previously the US Acting Comptroller of the Currency</li>
 <li>Bitfury raised $80 million at a valuation of $1 billion back in 2018, and is said to be pursuing an IPO</li>
 </ul>
 
</div>



Former Binance.US CEO and former US Acting Comptroller of the Currency Brian Brooks has been appointed CEO of mining manufacturer Bitfury as the company pursues its next funding round which might come in the form of an IPO. 



<div class="wp-block-image"><figure class="alignright size-large is-resized"><img loading="lazy" decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/11/800px-Acting_Comptroller_of_the_Currency_Brian_P._Brooks-731x1024.jpg" alt="" class="wp-image-10604" width="183" height="256" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/11/800px-Acting_Comptroller_of_the_Currency_Brian_P._Brooks-731x1024.jpg?w=731 731w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/800px-Acting_Comptroller_of_the_Currency_Brian_P._Brooks-731x1024.jpg?w=214 214w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/800px-Acting_Comptroller_of_the_Currency_Brian_P._Brooks-731x1024.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/800px-Acting_Comptroller_of_the_Currency_Brian_P._Brooks-731x1024.jpg?w=184 184w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/800px-Acting_Comptroller_of_the_Currency_Brian_P._Brooks-731x1024.jpg?w=186 186w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/800px-Acting_Comptroller_of_the_Currency_Brian_P._Brooks-731x1024.jpg?w=156 156w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/800px-Acting_Comptroller_of_the_Currency_Brian_P._Brooks-731x1024.jpg?w=57 57w, https://blockworks-co.imgix.net/wp-content/uploads/2021/11/800px-Acting_Comptroller_of_the_Currency_Brian_P._Brooks-731x1024.jpg?w=800 800w" sizes="auto, (max-width: 183px) 100vw, 183px" /><figcaption>Brian P. Brooks, June 2020</figcaption></figure></div>



“With an eye toward the next phase in our evolution, we are thrilled to welcome Brian to the Company. Brian is a respected executive and thought leader with deep regulatory, digital asset and capital markets expertise who shares Bitfury’s vision for a decentralized peer-to peer economy,” the company said in a release.&nbsp;



Bitfury founder and former CEO Valery Vavilov will move over to the role of Chief Vision Officer and the Chairman of the Board of Directors.



Given Brooks short stint at Binance.US — he was at the<a href="https://cms.blockworks.co/binance-us-taps-brian-brooks-as-ceo/" target="_blank" rel="noreferrer noopener"> firm for less than five months</a> before leaving due to “<a href="https://cms.blockworks.co/brian-brooks-resigns-as-binanceus-ceo/" target="_blank" rel="noreferrer noopener">differences over strategic direction</a>” — many had wondered where he would reappear, or if he would move on from crypto altogether. During Brooks’ tenure as Acting Comptroller of the Currency, where he oversaw the <a href="https://www.occ.treas.gov/about/index-about.html" target="_blank" rel="noreferrer noopener">US’ bank regulator</a>, he paved the way for <a href="https://www.coindesk.com/markets/2020/10/31/us-banks-may-seek-to-partner-with-or-buy-crypto-custodians-occs-brooks-says/" target="_blank" rel="noreferrer noopener">chartered banks to act as crypto custodians</a> creating the ability for institutions to invest in digital assets. 



“Bitfury is an established leader in the digital asset industry, renowned for its sustained research and development efforts and best-in-class proprietary technologies,” Brooks said in a statement. “I look forward to working alongside Valery and Bitfury’s highly experienced leadership team to grow the Company’s core businesses and scale its portfolio of new innovations.”



<h3 class="wp-block-heading">A Bitfury IPO?</h3>



With the bitcoin mining industry <a href="https://cms.blockworks.co/chinas-global-bitcoin-hash-power-slips-to-0-heres-why/" target="_blank" rel="noreferrer noopener">exiting China </a>and doubling-down on the US, investors have taken <a href="https://cms.blockworks.co/north-american-miners-get-buy-rating-despite-bitcoin-price-slump-low-hashrate/" target="_blank" rel="noreferrer noopener">keen interest in the mining industry</a>. As Bitfury was <a href="https://medium.com/meetbitfury/a-momentous-bitfury-birthday-51f1343fb4b3">one of the first large-scale mining manufacturers</a>, founded in 2011 and launching its first mining chip in 2013, an IPO is a much talked about next step for the company. Last month its former CEO, Valery Vavilov, confirmed to <a href="https://cointelegraph.com/news/bitfury-ceo-confirms-ipo-considerations-are-part-of-expansion-plans" target="_blank" rel="noreferrer noopener">CoinTelegraph</a> that they were taking the first steps to pursue a public listing. 



“As Bitfury and its portfolio of companies continue their global expansion in the digital assets space, Bitfury will be considering an IPO as part of its broader expansion and growth plans,” Vavilov is quoted as saying.&nbsp;&nbsp;&nbsp;



Bitfury’s investors include South Korean internet giant Naver, Macquarie Capital, and Mike Novogratz’s Galaxy Digital.

Brian Brooks Lands as CEO at Mining Manufacturer Bitfury

<div id="highlights-block_611bd371e5c6b" class="highlights">
 <ul>
 <li>Binance’s US division has been on the hunt for a new CEO after Brian Books abruptly quit the company</li>
 <li>Brooks, with his experience in DC’s regulatory circles, was a replacement for Catherine Cooley who had the job between 2019 and 2021</li>
 </ul>
 
</div>



Binance’s US arm once again has a new CEO, but this time it&#8217;s confirmed just to be a temporary appointment.&nbsp;



Joshua Sroge, Binance.US’s CFO, has been appointed as its interim CEO according to an update on Sroge’s Linkedin. The company has yet to make an official announcement, though <a href="https://www.theblockcrypto.com/post/113960/binanceus-picks-cfo-to-helm-exchange-after-abrupt-brian-brooks-exit" target="_blank" rel="noreferrer noopener">The Block</a> initially reported on Sroge’s appointment late Monday.



Sroge has been with the company since January 2020, shortly after Binance opened its regulatory-compliant US division.



<div class="wp-block-image"><figure class="aligncenter size-full"><img loading="lazy" decoding="async" width="300" height="300" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/square_cropped_JoshS.jpeg" alt="Joshua Sroge, Binance.US’s CFO" class="wp-image-6573" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/08/square_cropped_JoshS.jpeg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/square_cropped_JoshS.jpeg?w=150 150w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/square_cropped_JoshS.jpeg?w=257 257w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/square_cropped_JoshS.jpeg?w=261 261w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/square_cropped_JoshS.jpeg?w=219 219w, https://blockworks-co.imgix.net/wp-content/uploads/2021/08/square_cropped_JoshS.jpeg?w=80 80w" sizes="auto, (max-width: 300px) 100vw, 300px" /><figcaption>Joshua Sroge, Binance.US’s CFO and now interim CEO</figcaption></figure></div>



By its title, Sroge’s appointment is only intended to be temporary unlike his predecessors which only held the job briefly before disappearing silently or publicly announcing their intention to quit.



<a href="https://www.linkedin.com/in/catherinegcoley/" target="_blank" rel="noreferrer noopener">Catherine Coley</a>, a former Ripple executive and VP at tech-focused Silicon Valley Bank, was the US-exchange’s first CEO holding the position since its inception until around May 2021 when former head of the Office of the Comptroller of the Currency <a href="https://cms.blockworks.co/binance-us-taps-brian-brooks-as-ceo/" target="_blank" rel="noreferrer noopener">Brian Brooks</a> was appointed to the job. Coley remained quiet after Brooks’ appointment, silencing her once-active Twitter account and keeping the title of CEO on her Linkedin until recently, leading some to believe that she was <a href="https://decrypt.co/76096/binance-ceo-catherine-coley-disappeared-after-ouster" target="_blank" rel="noreferrer noopener">engaged in a legal dispute</a> with the exchange about her ousting.&nbsp;&nbsp;&nbsp;&nbsp;



Regardless of how Coley’s ousting was handled, Brooks was a logical appointment for the role given his experience as a regulator. For an exchange that was looking to ‘go legit’ after being a regulatory pariah, there was no better hire than Brooks — the former top boss at the nation’s banking regulator.



“I wouldn’t have taken this job if I didn’t have a strong commitment from the board to lead a strong compliance program,” he said at the time.



But after three months Brooks was out, wishing his colleagues at the exchange success, despite “differences over strategic direction” just as Binance faces its most mighty challenge yet with <a href="https://cms.blockworks.co/irs-justice-department-probing-binance/" target="_blank" rel="noreferrer noopener">probes by the US DOJ, IRS</a>, scrutiny in <a href="https://www.coindesk.com/binance-to-take-proactive-stance-to-compliance" target="_blank" rel="noreferrer noopener">Hong Kong</a>, regulatory heat in the <a href="https://cms.blockworks.co/uk-fca-binance-ban-not-prohibiting-british-traders/" target="_blank" rel="noreferrer noopener">United Kingdom</a>, outright bans in <a href="https://cointelegraph.com/news/binance-banned-in-malaysia-given-14-days-notice-to-shut-down-operations" target="_blank" rel="noreferrer noopener">Malaysia</a> and <a href="https://www.bangkokpost.com/business/2158475/the-curious-case-of-binance" target="_blank" rel="noreferrer noopener">criminal complaints in Thailand</a>.



For his part, the company CEO Changpeng Zhao has said publicly that Binance will be “pivoting from reactive compliance to proactive compliance”.



BNB, its eponymous token, appears to be unaffected by the news and its down 0.8% trading at $420, according to <a href="https://www.coingecko.com/en/coins/binance-coin" target="_blank" rel="noreferrer noopener">CoinGecko</a>. The token is up nearly 27% during the last two weeks of trading. 



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Binance.US Taps CFO Joshua Sroge as Interim CEO

<div id="highlights-block_610d978758359" class="highlights">
 <ul>
 <li>In a message posted on twitter Brooks said he was stepping down as CEO and wished his colleagues success, despite “differences over strategic direction&#8221;</li>
 <li>Brooks’ resignation follows a series of signals from lawmakers that greater cryptocurrency regulation is coming</li>
 </ul>
 
</div>



Brian Brooks, the previous Head of the Comptroller of the Currency, stepped down as CEO of Binance.US after holding the position for about three months.&nbsp;



In a message posted on twitter Brooks said he was stepping down as CEO and wished his colleagues success, despite “differences over strategic direction.”



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Greetings <a href="https://twitter.com/hashtag/crypto?src=hash&amp;ref_src=twsrc%5Etfw">#crypto</a> community. Letting you all know that I have resigned as CEO of ⁦⁦⁦<a href="https://twitter.com/BinanceUS?ref_src=twsrc%5Etfw">@BinanceUS</a>⁩ . Despite differences over strategic direction, I wish my former colleagues much success. Exciting new things to come!&mdash; Brian Brooks (@BrianBrooksUS) <a href="https://twitter.com/BrianBrooksUS/status/1423727097323802626?ref_src=twsrc%5Etfw">August 6, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Brooks joined Binance.US as CEO in May, taking over from Catherine Coley, tech and finance executive formerly with Ripple and Silicon Valley Bank.&nbsp;



When Brooks announced he was joining Binance.US, he was quoted as saying that he aimed to make Binance’s United States wing a stalwart competitor to regulatory-friendly Coinbase.&nbsp;



“I wouldn’t have taken this job if I didn’t have a strong commitment from the board to lead a strong compliance program,” he said at the time.



<h3 class="wp-block-heading">Brooks&#8217; resignation follows regulation signals</h3>



Brooks’ resignation follows a <a href="https://cms.blockworks.co/regulators-are-coming-for-crypto-heres-how-firms-are-reacting/" target="_blank" rel="noreferrer noopener">series</a> of signals from lawmakers that greater cryptocurrency regulation is coming. US Securities and Exchange Commission Chairman Gary Gensler announced earlier <a href="https://cms.blockworks.co/sec-chair-gensler-prioritizes-crypto-platform-crackdown/" target="_blank" rel="noreferrer noopener">this week</a> that he will be making crypto exchange regulation a priority. The industry is also currently watching Congress, which will vote on a <a href="https://cms.blockworks.co/us-crypto-tax-crackdown-in-congress-crosshairs/" target="_blank" rel="noreferrer noopener">bill impacting cryptocurrency tax</a> collection as early as Saturday.&nbsp;



Binance, a cryptocurrency exchange incorporated in the Cayman Islands but without a named headquarters, has been the center of several controversies in the past. The company was investigated by the Justice Department and Internal Revenue Service in May as part of a crackdown against illicit trading activity in the digital assets market.&nbsp;



In June, the Financial Conduct Authority ruled that the exchange cannot operate any “regulated” services in the United Kingdom. Also in June, Silvergate ended its relationship with Binance which was a larger hit for Binance and not Silvergate, according to Compass Point analyst Michael Del Grosso.



Then Del Grosso suggested that Binance.US, an entity that only shares the same name and software as its international counterpart, may consider a rebrand since Brooks was hired to give the company a squeaky clean image away from the headline risks of Binance international.



“Who knows what kind of team he will bring on, but this is something that Brooks is going to try and distance himself from,” <a href="https://cms.blockworks.co/analyst-binance-silvergate-split-will-be-immaterial-for-silvergate/" target="_blank" rel="noreferrer noopener">Del Grosso said at the time.</a>



<h3 class="wp-block-heading">Executive shakeup hints</h3>



Hints at an executive shakeup began in late July when Binance CEO and Binance.US Chairman of the Board, Changpeng “CZ” Zhao <a href="https://cms.blockworks.co/regulators-are-coming-for-crypto-heres-how-firms-are-reacting/" target="_blank" rel="noreferrer noopener">said in July</a> that he would be willing to step down from his role leading the company if a candidate with a better understanding of the regulatory environment is found. 



Shortly after Brooks announced his resignation, Zhao also released a statement on <a href="https://twitter.com/cz_binance/status/1423729793548398597?s=20" target="_blank" rel="noreferrer noopener">Twitter</a> regarding the departure, where he said the former CEO’s work has been “invaluable.”&nbsp;



Before joining Binance.US, Brooks was former head of the Office of the Comptroller of the Currency, the nation’s banking regulator. There he ran its operations in a continued push to become regulator-friendly. His tenure lasted from May 2020 through January 2021.



Under his watch, the OCC gave the<a href="https://www.occ.gov/news-issuances/news-releases/2020/nr-occ-2020-98.html" target="_blank" rel="noreferrer noopener"> green-light for banks</a> to provide custody services for digital assets and also created a federal <a href="https://cms.blockworks.co/occ-to-unveil-bank-charter-for-crypto-financial-services-firms/" target="_blank" rel="noreferrer noopener">bank charter</a> for <a href="https://cms.blockworks.co/anchorage-raises-80-million-as-banks-seek-to-solidify-bitcoin-strategies/">digital asse</a><a href="https://cms.blockworks.co/anchorage-raises-80-million-as-banks-seek-to-solidify-bitcoin-strategies/" target="_blank" rel="noreferrer noopener">ts</a><a href="https://cms.blockworks.co/anchorage-raises-80-million-as-banks-seek-to-solidify-bitcoin-strategies/">-first banks</a>.



Want more investor-focused content on digital assets? <a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Join us</a> September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket. <a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Buy it now</a>.