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Day 2 of Chainalysis Links NYC 2024: Stablecoins, Tokenization Paving the Way for an On-chain Future

On the second day of Links NYC 2024, world-class leaders from finance, crypto, and the public sector convened to share behind-the-scenes insights and how they’re looking towards the future. Discussions covered a range of topics, including the latest innovations intersecting with blockchain, strategies to combat crypto-related crime, and how compliance is becoming a powerful catalyst for new developments in the industry.

Emerging technologies shaping crypto

Howard Lutnick, chairman and CEO of Cantor Fitzgerald, in conversation with Chainalysis CEO Michael Gronager, shared his perspective on the evolving relationship between traditional finance and the crypto world, championing the role of stablecoins: “Stablecoins are the most practical, efficient, logical way for people in these emerging markets to hold a dollar…I am a fan of properly backed stablecoins.” Lutnick highlighted the importance of the dollar’s dominance and how stablecoins could reinforce America’s economic strength globally. He expressed skepticism towards cryptocurrencies without practical use cases, preferring instead to focus on innovations that could genuinely integrate with and enhance the financial ecosystem. Michael Gronager echoed the sentiment on the foundational role of crypto in finance, affirming the utility of stablecoins. Lutnick added, once blockchains are operating at scale: “I think that tokenization will be a fundamental part of my business and everyone’s business.”

Exploring the synergies between AI and crypto, Chainalysis’ Danielle Davis moderated a discussion between Chainalysis’ Chief Scientist Jacob Illum, John Randles of Siren, and Lucas Tcheyan of Galaxy Digital. They talked about how AI could enhance the crypto ecosystem and address its complexities, affirming its potential to empower developers and spur creativity in innovation by unlocking technology to people who lack the specialized skills to bring their ideas to life. “We’re looking to democratize access to more complex things…ensuring people are not frustrated but successful,” said Illum. The panelists spoke to the nature of AI as experimental and stressed the importance of responsible innovation and the need for a human-centric approach in integrating AI with blockchain. Tcheyan emphasized the necessity of preserving the ethos of crypto as open source, transparent, and accessible.

Innovation born of compliance

Chainalysis Co-founder and Chief Strategy Officer Jonathan Levin convened with compliance leaders from leading exchanges: Noah Perlman (Binance), Valerie-Leila Jaber (Coinbase), and CJ Rinaldi (Kraken) to discuss the ever-evolving landscape of crypto compliance. The conversation stressed the importance of collaboration between compliance teams and product engineers. Settlements and consent orders were framed as markers of maturation, validating the continuous nature of compliance work and the ongoing need for investment in systems and controls. The session also touched on the challenges and opportunities of operating at scale and the differences in agility and ability to experiment compared to traditional finance. “The difference between us and TradFi is the speed…the willingness to try and pilot,” said Valerie-Leila Jaber.

In a session focused on Latin America’s financial evolution and crypto compliance landscape moderated by Chainalysis’ Daniel Cartolin, Vanessa Araujo Lopes Butalla from 2TM Group/Mercado Bitcoin discussed Brazil’s leading position in crypto adoption and the country’s push towards clear regulation and tokenization. “Tokenization of financial contracts is the future and we are working hard to make this a reality,” said Vanessa Araujo Lopes Butalla. Luz del Valle of FV Bank noted a customer base increase for institutional funds, particularly in Argentina, and the other speakers affirmed the institutional shift towards crypto across Latin America. Gabriel Campa from Towerbank shared insights into Panama’s unique stance on crypto regulation, which leans towards observing United States regulatory actions due to its lack of a central bank. Vanessa Araujo Lopes Butalla spoke to the success of public-private partnerships in Brazil, exemplified by regulatory sandboxes and the Central Bank of Brazil’s landmark project for tokenizing government bonds. The panelists emphasized the importance of education and its challenges and taking cues for regulatory rigor from traditional finance.

Crypto in the context of national security

A session covering crypto heists perpetuated by North Korea (DPRK) was moderated by author Geoff White, featuring Jessica Peck from the Department of Justice (DOJ), Chris Wong from the Federal Bureau of Investigation (FBI), and Chainalyis’ Erin Plante. They dissected DPRK’s extensive involvement in crypto hacks and extortion, such as the Axie Infinity bridge hack, which claimed over $600 million — described by Plante as “the largest heist of all time that’s not internal embezzlement”. They discussed how North Korea transitioned into a formidable force in the crypto crime sphere beginning around 2017 to fund its weapons program, primarily through phishing and social engineering. “[Crypto] is the space with the most open sharing between private and public sector, a lot of efforts we make in the North Korea space have a much broader impact,” said Chris Wong.

“The expertise in this room: The NYPD, in blockchain analytics—sends a signal to those who want to do harm that they cannot hide behind cryptocurrency.”—Alvin Bragg, District Attorney of Manhattan. A session presented by the District Attorney’s office of Manhattan gave a behind-the-scenes overview of the landmark case of the People of the State of New York v. Victoria Jacobs, marking the first-ever prosecution and trial for terrorism and cryptocurrency financing within the New York State Court system. Speaking to the collaborative efforts of the New York City Police Department, the Manhattan District Attorney’s Office, and Chainalysis, presenters emphasized the pivotal role of blockchain analytics and the importance of prosecutorial and investigative expertise in addressing the nuanced challenge of terrorist financing through cryptocurrency.

Lessons from Day 2 of Links 2024

The final day of Links NYC was incredibly insightful and inspiring. The future’s looking bright, in no small part thanks to all the hard work going on.

We’d like to extend our gratitude to everyone involved in making this year’s Links NYC a roaring success: all of our organizers, sponsors, speakers, and attendees. Your engagement and ideas have been invaluable to deepening the collective understanding of these cutting-edge technologies and their potential to transform our world. We look forward to continuing these important conversations. Once again, a hearty thanks to all who joined us and made this possible. See you next year!


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