Biden reportedly is set to nominate a law professor critical of crypto and big banks to run the OCC

the white house ellipse
The White House.

  • President Joe Biden is set to nominate Cornell University law professor Saule Omarova to head the Office of the Comptroller of the Currency, according to a Bloomberg report.
  • The banking law professor has been a critic of cryptocurrencies and envisions a larger role for the government in overseeing banks.
  • Omarova needs Senate confirmation to serve a five-year term.
  • See more stories on Insider’s business page.

President Joe Biden is preparing to nominate a Cornell University law professor who has been critical of cryptocurrencies and envisions a larger role for the government in overseeing banks to run the Office of the Comptroller of the Currency, according to a Bloomberg report.

Biden as soon as this week will name Saule Omarova as his choice to head the OCC, Bloomberg reported late Wednesday, citing three unnamed sources familiar with the nomination process. The OCC is a key regulator overseeing consumer banking and supervises large lenders such as Bank of America and JPMorgan Chase.

Omarova, a banking law professor, is expected to push for tougher oversight and rules in the industry. A native of Kazakhstan, Omarova in an October 2020 academic paper wrote about a blueprint for a “People’s Ledger,” or a comprehensive restructuring of the central bank balance sheet to democratize money and finance the world’s largest economy.

By separating the lending function from their monetary function, a proposed reform for banks would “effectively ‘end banking,’ as we know it,” with Omarova making a direct play on the title of the 2014 book, “The End of Banking: Money, Credit, and the Digital Revolution”.

Biden’s aides were vetting Omarova in August, according to The New York Times, noting that Omarova has said cryptocurrency operations could allow banks to conduct more trading activity out of oversight of the Federal Reserve and other regulators. Bloomberg reported that Omarova contends that digital tokens threaten to destabilize the economy and are vulnerable to abuse by private firms at the expense of public safeguards.

Omarova served in President George W. Bush’s administration as a special adviser for regulatory policy in the Treasury Department. She’s practiced law at Davis Polk & Wardwell, specializing in corporate transactions and advisory work in financial regulation.

If confirmed by the Senate to a five-year term, Omarova would take over from Michael Hsu, a former Fed official who has been running the OCC on an acting basis since May. Hsu this week told a blockchain panel that crypto and decentralized finance look similar to the financial instruments that sparked the 2008 global financial crisis.

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Crypto is not a viable long-term form of private money and stablecoins are equivalent to poker chips at the casino, SEC chief says

gary gensler sec chair
  • Securities and Exchange Commission Chairman Gary Gensler likened stable coins to “poker chips.”
  • Gensler returned to his previous analogy referring to the $2 trillion cryptocurrency market as the “Wild West.”
  • The SEC is working on a report about stablecoins under the guidance of Treasury Secretary Yellen.
  • See more stories on Insider’s business page.

Securities and Exchange Commission Chairman Gary Gensler likened stable coins to “poker chips,” in an interview with the Washington Post, returning to his previous analogy referring to the $2 trillion cryptocurrency market as the “Wild West.”

He also said private forms of money have turned out to be unsustainable, suggesting thousands of such projects won’t last.

Stablecoins “are acting almost like poker chips at the casino right now,” Gensler said in an interview with Washington Post columnist David Ignatius. “We’ve got a lot of casinos here in the Wild West and the poker chip is these stablecoins … at the casino gaming tables.”

Gensler in a speech in early August said the market for digital assets was like the “Wild West,” in lacking a robust amount of protection for investors. He has called on lawmakers to give the SEC more authority to regulate the industry.

A stablecoin is a cryptocurrency pegged to fiat currencies such as the US dollar and backed by traditional assets such as short-dated government bonds. Among the biggest stable coins, tether was valued at around $68 billion and USD Coin had a market capitalization of almost $30 billion, according to CoinMarketCap.com. Gensler did not name any stable coin in the interview.

The SEC is putting together a report about stable coins under the guidance of Treasury Secretary Janet Yellen, Gensler said, adding that working with Congress “would help” in the regulation of stable coins.

The interview was published after Gensler last week told the Senate banking committee that cryptocurrency exchanges need to register with the agency because some of their tokens or products may be securities.

“Those platforms should come in, they should figure out how to register, be an investment–investor protection remit,” Gensler told the Washington Post.

The regulator said there are examples of experimentation with private forms of money in the US, notably the Wildcat banking era between the 1830s to the 1860s, when banks issued their own notes and competed with each other.

“Private monies usually don’t last that long. So, I don’t think there’s a long-term viability for 5,000 or 6,000 private forms of money. History tells us otherwise,” he said. “So, in the meantime, I think it’s worthwhile to have an investor protection regime placed around this.”

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A crypto hedge fund manager was sentenced to over 7 years in prison for running a Ponzi scheme

Bitcoin
Bitcoin

A former cryptocurrency hedge fund manager who pleaded guilty to securities fraud after prosecutors said he ran a Ponzi scheme was sentenced to seven and a half years in prison, the US attorney’s office for the Southern District of New York said Wednesday.

From 2017 to 2020, 24-year old Stefan Qin stole and dissipated nearly all of the assets of his $90 million flagship hedge fund, and attempted to steal millions from a secondary fund to pay back investors, according to the Department of Justice.

Qin pled guilty to one count of securities fraud in federal court in February. Now the trader, who was the subject of a Wall Street Journal profile for his cryptocurrency arbitrage skills in 2018, is facing a prison sentence.

According to the US attorney’s office, Qin lied about returns on his $90 million fund and took money from its accounts to fund personal expenses, including a penthouse apartment in New York City. The office also said over 100 investors in Qin’s fund were scammed.

“Qin’s brazen and wide-ranging scheme left his beleaguered investors in the lurch for over $54 million, and he has now been handed the appropriately lengthy sentence of over seven years in federal prison,” US Attorney Audrey Strauss said.

According to the Wall Street Journal, federal sentencing guidelines called for nearly 20 years in prison, but US District Judge Valerie Caproni said those recommendations were draconian. Qin’s lawyers had asked for a two-year sentence, but the judge landed on a sentence that would dissuade others from committing similar white collar crimes, the Journal said.

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Coinbase applies to offer trading in crypto derivatives and futures on the exchange

Coinbase
Coinbase

Coinbase, the largest publicly listed crypto exchange, said on Wednesday it plans to expand its product offering to include trading in futures and derivatives.

The company said in a tweet it had submitted an application with the National Futures Association (NFA), a US regulatory body that focuses on derivatives.

Coinbase is joining CME Group, as well as crypto exchanges like Binance, OKEx, FTX and Kraken, in offering derivatives.

“This is the next step to broaden our offerings and offer futures and derivatives trading on our platforms. Goal: Further grow the crypto economy,” Coinbase said in a tweet.

The company, which listed on the US stock exchange in February, has been making strides in growing its business.

Earlier this week, Coinbase said it planned to raise up to $2 billion through a bond sale and would use the proceeds to fund future takeovers, develop new technologies and products.

The NFA website showed Coinbase Financial Markets had a pending membership application.

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El Salvador will exempt foreigners from paying bitcoin taxes to encourage investment, report says

bitcoin payment el salvador people buying
  • El Salvador will exempt foreign investors from paying taxes on bitcoin profit and income, AFP reported.
  • An advisor to El Salvador’s president said the country wants the move to encourage foreign investment.
  • The Central American nation recently made bitcoin legal tender, the first country in the world to do so.
  • See more stories on Insider’s business page.

El Salvador, which this month became the first country to make bitcoin legal tender, will exempt foreign investors from paying taxes on their profits from the cryptocurrency, according to an AFP report.

“There will be no taxes to pay on either the capital increase or the income,” from bitcoin, Javier Argueta, a legal adviser to El Salvador President Nayib Bukele, told AFP in a report published Friday.

“This (is done) obviously to encourage foreign investment,” Argueta was quoted as saying. The Central American country launched bitcoin as legal tender on September 7, in part to help combat persistent hyper-inflation.

Argueta also the government hopes that bitcoin as a legal payment option will cut millions of dollars off commissions on remittances sent home from abroad, mainly the United States.

El Salvador’s rocky rollout of bitcoin, which included technical issues with the country’s Chivo national crypto wallet, was cited as a factor in sending bitcoin’s price tumbling by at least 17% on the country’s launch day. Bitcoin joins the US dollar as national currency in the country but the move has been met with local protests and skepticism about its use, partially because the cryptocurrency is prone to sharp price swings.

Bitcoin on Wednesday slipped 0.2% to $47,805.

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ALTCOINS TO BUY: Crypto experts share the best investing opportunities they’re seeing outside of bitcoin

In this photo illustration of the litecoin, ripple and ethereum cryptocurrency 'altcoins' sit arranged for a photograph
In this photo illustration of the litecoin, ripple and ethereum cryptocurrency ‘altcoins’ sit arranged for a photograph

  • Thousands of cryptocurrencies now exist.
  • It can be difficult to pick winners in such a saturated space.
  • Insider has asked several experts about where they see the biggest opportunities in altcoins.
  • See more stories on Insider’s business page.

Cryptocurrencies have exploded in popularity over the last several months. Of course, the most popular remains bitcoin.

But some other smaller cryptos are gaining serious steam as well, as the concept of digital currencies continues to seep into the public consciousness.

However, it can be difficult to know which cryptocurrencies to invest in, or whether you should in the first place. There are currently thousands of different types of coins on the market. And some – like dogecoin, which was founded as a joke – don’t appear to be serious. Others, like some built on the Ethereum blockchain, appear to have better use cases.

Crypto is an esoteric domain – its intricacies can be difficult to understand, especially for those new to the space.

To help cut through the noise, Insider has talked to several experts about which altcoins – cryptocurrencies other than bitcoin – they believe have the best upside. These experts also described the fundamentals and technicals that make these altcoins attractive. Their views are shared in the articles below.

This is a photo of Ran Neuner wearing a black t-shirt with a bitcoin logo on it and a black blazer standing in front of a white background.
Ran Neuner, host of Crypto Banter on Youtube and CEO of Onchain Capital

The biggest altcoin opportunity since 2018 is happening now, according to a crypto evangelist who says he sold some ether to buy in. He explains it, and shares 4 other cryptos the average investor should be buying.

Ran Neuner, the cofounder and CEO of blockchain investment fund Onchain Capital, is very excited about one crypto right now: solana (SOL). He told us why the ethereum competitor could be the biggest opportunity in crypto since 2018.

Adrian Zduńczyk
Adrian Zduńczyk.

5 altcoins that could surge 10-100x in the coming ‘legendary’ altcoin season that outshines bitcoin, according to a crypto technical analyst who’s holding them

Crypto technical analyst Adrian Zduńczyk says some altcoins due to outperform bitcoin in a “legendary” way. Zduńczyk is the founder and CEO of the Birb Nest, a trading platform. He shared five altcoins with us that he thinks could surge 10-100 times.

Matthew Sigel
Matthew Sigel is the head of digital assets research at VanEck.

The head of digital assets research at an $81 billion money manager breaks down 3 drivers fueling the $2 trillion crypto market’s latest bull run – and shares 3 competing altcoins to ethereum, including one that could nearly double in the next year

Ethereum is the second-biggest cryptocurrency at the moment, sitting behind bitcoin. But it has problems like expensive transaction fees. Matthew Sigel, head of digital asset research at VanEck, shares three altcoins to rival ether.

Bitcoin, Dogecoin, Ethereum cryptocurrency coins and a graph are pictured in Kyiv on 08 July, 2021.

Bitcoin is ready for a ‘monster run’ up to $85,000 if it clears a key resistance level, a crypto evangelist predicts – and shares 7 altcoins he’s bullish on now

Ethereum’s major upgrade in early August led to a 9.6% intraday price spike, and investors haven’t yet sold the positive news. That’s one reason why David Gokhshtein is bullish. He also told us his theses for six smaller altcoins he owns.

A local business in El Salvador that accepts bitcoin payments.
A local business in El Salvador that accepts bitcoin payments.

Why crypto crashed: 4 experts break down what Tuesday’s sudden drop might mean for the altcoin season and NFT frenzy – and share 12 high-quality tokens that are likely to continue rallying toward the year’s end

Various cryptos tumbled on Tuesday September 7 as El Salvador officially adopted bitcoin as legal tender. By the following morning, more than $3.25 billion in crypto positions had been liquidated over 24 hours, affecting more than 300,000 traders, according to Bybit. We asked experts what was driving the sell-off, and where they recommended buying dips.

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Dogecoin is a ‘meme’ cryptocurrency, seemingly created as a joke

The chief economist of a blockchain data firm breaks down why the current dogecoin rally has more legs to run – and lays out why ‘anything is possible’ for the altcoin, including reaching $1

When dogecoin rose over 12,000% to $0.68 earlier this year, it shocked the investing community. It has since cooled off, though its price has picked up in recent weeks. It now sits around $.027. What will it do next? Chainalysis chief economist Philip Gradwell broke down why he think it will go to $1.

Crypto coins circle
crypto coins circle

WATCH: Crypto analyst David Grider and venture capital investor Ria Bhutoria discuss state of the market, under-the-radar altcoins, and outlook on regulation

Insider recently hosted a live webcast featuring two crypto experts. They broke down their views on everything from the recent slump to the possibility of regulation.

Lyn Alden Pic
Lyn Alden is the founder of Lyn Alden Investment Strategy

Bitcoin to $100,000 and ether to $5,000: Famed investment strategist Lyn Alden explains her bullish predictions for the largest cryptos in 2022, and why there are only 2 altcoins worth watching

Lyn Alden says most altcoins are “smoke and mirrors.” But there are at least two with interesting technologies that are worth watching.

Whale

A crypto evangelist explains why he’s going ‘all in on altcoins’ – and shares why he’s worried about bitcoin whales taking over that market

As some altcoins have shown, there is potential for huge appreciation in crypto outside of bitcoin. David Gokhshtein is one investor that’s looking to take advantage of these opportunities. He shared two altcoins he’s bullish on.

Mack Lorden and Lucas Dimos
Mack Lorden, left, and Lucas Dimos are TikTok crypto influencers.

2 crypto traders and TikTok influencers share their 6 go-to altcoins for riding out crypto bear markets – including one that’s up more than 11,000% since its launch in 2017

The broader crypto space just went through a rough patch after huge gains earlier this year. Like any asset class, it has its bull and bear markets. When crypto bear markets do come, crypto influencers Mack Lorden and Lucas Dimos told us that six altcoins in particular help them hedge losses.

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Many investors are excited about the Ethereum network’s uses.

The head of institutional coverage at crypto trading platform FalconX shares 9 Ethereum-tied digital tokens to take advantage of the DeFi revolution – and breaks down why Ethereum still has ‘significant’ upside

Many altcoins are built on top of the Ethereum blockchain. Aya Kantorovich, the head of institutional coverage at crypto exchange FalconX, shared nine coins built on top of the ethereum blockchain that she thinks have solid use cases.

“I personally always like coins with application,” Kantorovich said.

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How Michael Saylor rebooted his career and his company by becoming the world’s biggest bitcoin bull

Microstrategy CEO Michael Saylor
MicroStrategy CEO Michael Saylor

Michael Saylor is no stranger to the limelight. The MicroStrategy CEO is perhaps best known for losing $6 billion in a single day during the height of the dot-com bubble, when the software business he had founded at age 24 nearly collapsed.

Two decades later, Saylor is once again at the center of a jittering conversation, thanks to his unprecedented embrace of bitcoin. With a mix of debt and virtually all of MicroStrategy’s cash, Saylor has bought more than 100,000 bitcoins that today are worth billions – and he doesn’t show any signs of slowing his buying binge anytime soon.

While other high-profile tech execs have invested company cash into crypto – Tesla’s Elon Musk and Square’s Jack Dorsey are among the best known – none has lashed their business’s fortunes to bitcoin the way that Saylor has. As little as 20% of Microstrategy’s value is tied to the company’s core software product, reckons analyst Kamil Mielczarek.

Saylor’s re-emergence as a bearded crypto king is one of the most fascinating comeback stories in the tech business; a surreal second act as well as a striking manifestation of the popular forces reshaping the rules of business. With 1.5 million Twitter followers, Saylor has twice as many as the US Federal Reserve and nearly 10 times as many as Gary Gensler, the chairman of the Securities and Exchange Commission who has vowed to more closely regulate cryptocurrencies.

The bitcoin pivot has injected an element of flair into MicroStrategy, now the largest corporate holder of the cryptocurrency, and sent the company’s stock soaring.

Insider spoke to a half-dozen former employees who worked closely with the executive over the years, as well as current and former friends, analysts, investors, and corporate-governance experts to understand whether the man behind the high-stakes bitcoin gamble is showing a stroke of genius or repeating a reckless habit.

Read the full story here: He once lost $6 billion in 1 day. Now he’s a bitcoin guru. Meet Michael Saylor, king of ‘electric money.’

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Bitcoin mining consumes 0.5% of all electricity used globally and 7 times Google’s total usage, new report says

A golden coin with the Bitcoin logo on it, sitting on top of a phone, which sits on top of a computer keyboard.
Bitcoin – represented here by a physical coin – uses a tremendous amount of electricity.

  • Bitcoin mining consumes roughly 0.5% of all energy consumption worldwide, according to the New York Times.
  • That’s roughly seven times more than Google’s total energy consumption per year, the report said.
  • Bitcoin’s negative environmental impact is expected to become a bigger issue as cryptocurrency gains more popularity.
  • See more stories on Insider’s business page.

Bitcoin’s price has jumped nearly fivefold in the past year, but the rapid run-up is leading to significantly higher energy consumption for the popular cryptocurrency worldwide.

That’s largely because more people are competing to mine bitcoin – a process that involves solving complex mathematical problems that help verify digital currency transactions. Miners who solve these problems receive a share of bitcoin, and as more people who compete to mine them, the more energy it takes.

It’s difficult to measure exactly how much energy bitcoin mining consumes, but a new analysis by the New York Times shared some staggering data that puts the energy use in perspective:

  • Bitcoin mining consumes around 91 terawatt-hours of electricity annually.
  • That’s more annual electricity use than all of Finland, which is a country of 5.5 million people.
  • That’s almost 0.5% of all electricity consumption worldwide, and a 10 times jump from just five years ago.
  • That’s about the same amount of electricity consumed in the state of Washington each year, and more than a third of electricity used for residential cooling in the US annually.
  • And it’s more than seven times the electricity used by all of Google’s global operations.

Given bitcoin’s massive price appreciation in recent years, it’s not hard to expect the electricity consumption to continue to grow. Bitcoin is now worth about $50,000, a roughly fivefold increase from last year. It was priced at around $500 in 2016.

With increased competition, bitcoin mining has become an industry of its own, requiring specialized machines, servers, and huge data centers with enough cooling capacity to keep the computers from overheating.

As noted, the internal mining process itself has become more complex; according to the New York Times, a single desktop computer could easily mine bitcoin back in 2011, when the cryptocurrency had little following. Now, it takes roughly “13 years of typical household electricity” to mine a single bitcoin.

A man stands at the end of a long corridor. The walls are packed with computers and wires, which are being used to mine bitcoin.
Some “bitcoin farms,” like this one in Moscow, have hundreds of computers mining bitcoin at the same time.

For those who have been following bitcoin and the broader cryptocurrency space, the environmental impact of mining has long been a problem to reckon with. Iran was rocked by power outages earlier this year that were partly blamed on bitcoin. In March, Bill Gates warned bitcoin was “not a great climate thing.” And U.S. Treasury Secretary Janet Yellen has called its energy use “staggering.”

In response, some asset managers are looking to address crypto’s environmental concerns. Michael Hanus, a senior managing director at the alternative investments platform RealBlocks, previously told Insider that asset managers are becoming increasingly aware of crypto’s sustainability issues.

Hanus made reference to ESG analysis, an investing philosophy that encourages firms to consider an investment’s environmental, social, and corporate governance impact. “A lot of managers, if you look at ESG, were originally focused on the ‘G,’ the governance aspects, in order to improve their portfolios. I think that’s shifting now, and there is additional emphasis on the ‘E’ and the ‘S’ of ESG,” Hanus said.

In other words, asset managers are trying to balance the possible negative environmental and social aspects of cryptocurrency with the money it can potentially earn investors.

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The CEO of a crypto research firm says bitcoin is going to $100,000 by year-end

A visual representation of the digital cryptocurrency, bitcoin

Michael Gronager – CEO of the cryptocurrency research firm Chainalysis – is highly bullish on bitcoin, and says it will soar past $100,000 by year-end.

In comments made during an interview with Bloomberg, Gronager referenced bitcoin’s early-summer sell-off as a consolidation period that coincided with network improvements and other helpful upgrades across the crypto landscape.

“In the bear market, a lot of interesting things have been built, and that basically facilitates a new bull market,” he said. “Yes, I think we’re still in a bull market. I think we can see above $100k by the end of the year.”

He added: “For most of the cryptocurrencies like bitcoin and ethereum – the most stable ones – we just need to see that trend, where they grow year-over-year. Sometimes they grow faster than others.”

“Long term, usually you say the moon is the limit. We can go up beyond that as well,” Gronager concluded.

Bitcoin is currently trading just above the key $50,000 threshold, climbing as much as 3% to $51,033.97 on Friday.

The cryptocurrency is now up 74% year-to-date and 369% in the past 12 months.

The asset fell from its record high of almost $65,000 in April this year. It suffered a sharp sell-off in May and traded rangebound for a while. It’s since been on an upward trend since mid-May.

Read more: The head of research for a blockchain analytics firm breaks down why bitcoin and ethereum can reach $100,000 and $10,000 respectively by next year – and shares 2 altcoins that are best positioned for a DeFi comeback

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