In the spirit of bringing together the public and private sectors, Day 1 of Chainalysis Links NYC 2024 explored the integration of crypto with traditional finance, the evolving landscape of blockchain regulation, the unique challenges of crypto crime, and the innovations paving the way forward. Industry leaders from both the public and private sectors discussed forging a unified approach to mainstream adoption, strategies for engaging with regulators, and the importance of interoperability and user-centric design.
Keynote by CEO Michael Gronager
Michael Gronager set the tone by reflecting on Chainalysis’ decade-long journey and how much the industry has changed in that time. Gronager emphasized that crypto is not about “disrupting finance” but about building new financial infrastructure: “Crypto will look more like finance before finance looks like crypto.” He pointed to major milestones, including $12 billion of net inflows to Bitcoin ETFs in just a few months: “The fastest growing ETF in history.” (Larry Fink, BlackRock)
Addressing the early rhetoric that branded crypto as crime-ridden, Gronager emphasized a shift, recognizing that “crypto crime” is just “crime.” A mere 0.34% of cryptocurrency transaction volume was confirmed illicit in 2023, however, the growing ubiquity of crypto has made it a tool for all forms of crime. He spoke to how the inherent transparency of blockchain offers “a silver platter” of opportunities for investigation and resolution. He also touched upon the serious implications of crypto in matters of national security, addressing the link between crypto hacks and the funding of DPRK’s missile program. In his closing remarks, Gronager spoke of how Chainalysis is the only source of blockchain analytics deemed reliable enough to be admissible in court, with the Chainalysis network instrumental in the seizure of $10 billion of illicit funds.
Regulatory insights
Chainalysis Co-founder and Chief Strategy Officer Jonathan Levin moderated a discussion between Adrienne Harris, Superintendent of New York State Department of Financial Services (NYDFS) and Congressman Ritchie Torres (D-NY). Harris and Torres discussed the future of crypto regulation, emphasizing the importance of collaboration between regulators and innovators. Harris spoke about how NYDFS had the largest crypto regulation unit in the word and its role in global crypto regulation, while Torres spoke on the legislative perspective, stressing the need for a comprehensive regulatory framework for crypto. “We want to make sure those good innovators are here in the US,” said Harris.
In a session focused on regulatory developments in the United States, Jason Somensatto, Chainalysis’ Head of North American Policy, Alma Angotti of Guidehouse, Marta Belcher of the Filecoin Foundation, and Kara Calvert of Coinbase, discussed the dynamic landscape of crypto regulation in the US. They explored potential policy changes, regulatory uncertainties, and anticipated trends in regulation for 2024 and beyond. Kara Calvert shared insights into Coinbase’s advocacy work with policymakers, emphasizing the importance of engaging the crypto community and leveraging information for policy influence. Alma Angotti reflected on her enforcement background, noting the challenges crypto companies face in navigating regulatory ambiguities and advocating for clarity. Marta Belcher highlighted Filecoin’s mission and its efforts to demonstrate the non-financial use cases of blockchain technology to policymakers. The conversation also broached the broader implications of regulatory actions by the Securities and Exchange Commission (SEC) and other entities on crypto businesses, stressing the need for regulatory clarity to support innovation and maintain the US’s competitive edge in the global market.
The fight against crypto crime
Yevhenii Panchenko of the Ukranian Cyberpolice shared insights into how cryptocurrency has played a role in the conflict between Russia and Ukraine. Panchenko discussed how the National Police of Ukraine has used Chainalysis over the last five years and the importance of blockchain analytics in combating modern warfare.
In a session covering the darker side of crypto-related crime, leaders from Customs and Border Protection (CBP), Homeland Security Investigations (HSI), and Queens County, spoke on the increasingly complex landscape of crime where crypto is being used in new and alarming ways. Molly Chambers from Chainalysis, alongside Michael Hanson, the Assistant Director for Intelligence at Customs and Border Protection, and Jonathan Sharp, Deputy Chief of Major Economic Crimes, discussed their encounters with crypto in violent crime like ghost gun sales and murder-for-hire cases, and how it complicates the fight against traditional crimes. Michael emphasized CBP’s analytical work and its push towards enhancing crypto literacy among officers. The conversation concluded stressing the ongoing need for partnership across sectors to navigate the evolving landscape of crypto crime. “This is the reality: that adoption is just going to continue and it is necessary for everybody to become familiar with cryptocurrency.”
Inspiring innovation
“This is the moment that crypto’s gone mainstream.”—Brett Tejpaul, Head of Coinbase Institutional. In a session that took us “behind the scenes” of the recent Bitcoin ETF launch, Sari Granat, Chief Operating Officer of Chainalysis sat down with Samara Cohen of BlackRock, Caroline Butler of BNYMellon, and Brett Tejpaul of Coinbase to discussed the impact of the spot bitcoin ETF, its significance for the industry, and the collaboration required for its success. “Don’t underestimate the power of a common language around digital assets. That is going to progress the pathway,” said Samara Cohen of BlackRock.
In Links’ first-ever Science Fair, Jason Lau, the Chief Innovation Officer at OKX Group, along with Asta Li, the Co-founder and CTO of Privy, and MC Lader, the COO of Uniswap, presented their latest projects, emphasizing the importance of blockchain interoperability, user-centric design, and the potential of on-chain markets.
Links NYC ’24’s most-requested topic was a session exploring tokenization. Caroline Butler of BNY Mellon, Naresh Nagia of Deloitte, and Maredith Hannon of Wisdom Tree, alongside Chainalysis’s Director of Compliance Caitlin Barnett, took a deep dive into the potential of tokenization for the broader financial ecosystem and their respective organizations. The session addressed the pressing issue of modernizing the cumbersome and outdated process of value transfer, a system largely unchanged since the 1970s. The conversation focused on the benefits of tokenization — using blockchain to digitally represent assets or liabilities — as a means to streamline, expedite, and enhance value transfer. The speakers also acknowledged the challenges of integrating tokenization within regulatory frameworks but framed these as opportunities for making the existing system more efficient and responsive to client needs. The session concluded with a focus on the need for collaboration across the financial sector to fully realize the transformative potential of distributed ledger technology and crypto.
Lessons from Day 1 of Links NYC 2024
The opening day of Chainalysis Links NYC 2024 was packed with engaging discussions, live demonstrations, and interactive sessions led by key figures from both the private and public sectors. The sentiment echoed throughout the day consistently spoke to a need for collaboration across sectors with the increasing integration of crypto in the traditional financial landscape and the world at large.
Links NYC 2024 is continuing today! Stay tuned for our recap of day two.
This material is for informational purposes only, and is not intended to provide legal, tax, financial, or investment advice. Recipients should consult their own advisors before making these types of decisions. Chainalysis has no responsibility or liability for any decision made or any other acts or omissions in connection with Recipient’s use of this material.
