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Lee Reiners is a lecturing fellow at the Duke Financial Economics Center at Duke…
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Russian Sanctions will Compel Further Adoption of Cryptocurrency and Increase Compliance Risks for Cryptocurrency Companies
Russian Sanctions will Compel Further Adoption of Cryptocurrency and Increase Compliance Risks for Cryptocurrency Companies
In the wake of the U.S.
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Public Companies Must Disclose Their Climate Risks
Public Companies Must Disclose Their Climate Risks
Climate change poses serious risks to almost every aspect of the economy, and its impacts will have long-term…
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Introducing "FinTech Law and Policy"
Introducing "FinTech Law and Policy"
In 2016, few people had ever heard of Bitcoin or blockchain, initial coin offerings were non-existent, and US financial…
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Lee Reiners, CFA shared thisThe $6.3B Binance heist is the largest theft of anything in history, yet it is simply another chapter in a 12-year structural pattern. I joined Al Jazeera English’s Inside Story to examine the fallout from the Binance exploit and what it means for digital asset security and financial stability. A few core takeaways from our discussion: 1. Vertical Integration Creates Systemic Honeypots: In traditional securities markets, exchange, broker-dealer, and custodial functions are segregated by law. If a retail broker like Schwab or Robinhood suffers a cyber incident, the NYSE or Nasdaq does not freeze. In crypto, exchanges bundle trading, clearing, and custody under one roof. When a single developer's device is compromised, the entire exchange and its order book halt. 2. Regulation Isn't a Panacea, But Firewalls Are Essential: Merely stamping "regulated" on an exchange offers false comfort if the underlying market structure remains flawed. 18 years to the day after the Bitcoin white paper was published, multi-billion-dollar heists continue to directly fund rogue state weapons programs. As long as these vulnerabilities persist, the priority for regulators must be insulating the traditional banking and financial system from contagion. 3. Emerging Tech Will Intensify the Pressure: The speed of this attack points to the growing role of AI in supercharging vulnerability exploitation. Looking further ahead, the transition toward quantum computing will test whether decentralized networks can coordinate fast enough to overhaul core cryptographic foundations. Catch the full segment and panel analysis here: https://lnkd.in/eGWUUMTcHow vulnerable are cryptocurrency platforms? | Inside StoryHow vulnerable are cryptocurrency platforms? | Inside Story
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Lee Reiners, CFA posted thisJohn Reed Stark and I have filed our comment letter urging the SEC to withdraw its proposed Regulation Crypto Assets in its entirety. For a decade, the SEC persuaded federal judges appointed by six Presidents that unregistered token sales are securities offerings, compiling more than 200 enforcement victories. The proposal would exempt the very transactions those courts found easiest to classify. On September 15, the Senate declined even to begin debate on the CLARITY Act. The Senate's own text would have directed the SEC to adopt a "Regulation Crypto," with a $200 million lifetime cap, a bar on companies organized abroad, and mandatory holding periods for insiders. The SEC's proposal allows $75 million every 12 months with no overall cap, opens its startup exemption to companies organized anywhere, and imposes no holding period on insiders. The agency is writing by rule a looser version of a bill the Senate would not take up. The treatment of insiders is more generous still. Coinbase urged the SEC to limit token sales by development teams until a network is "sufficiently decentralized." The SEC's proposing release concedes that a one-year holding period for insiders "could benefit potential investors by strengthening investor protection," then rejects one, observing that "an exit of a large insider could potentially result in a broader base of investors." That broader base is the retail public, buying what the insider is selling. The proposal also treats work to "secure" a functioning network as categorically outside the managerial efforts that make a token an investment contract. Yet migration to post-quantum cryptography may decide whether many tokens retain any value, and neither the proposing release nor the SEC's March 2026 interpretation mentions quantum computing. The Senate Banking Committee's CLARITY text includes a finding that quantum advances threaten "the security of digital assets." The exemptive authorities the SEC invokes, Section 28 of the Securities Act and Section 36 of the Exchange Act, are backstop provisions enacted in 1996. With Chevron deference gone after Loper Bright, a court will decide for itself whether they authorize a parallel offering regime for an entire asset class, and we believe any final rule resembling this proposal will be vacated. The SEC cannot enact by rule what Congress has declined to enact by law. The full letter, all 235 footnotes of it: https://lnkd.in/g4YdxhUM #Crypto #SEC #SecuritiesLaw #InvestorProtection #CLARITYAct
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Lee Reiners, CFA shared thisI’ve spent much of the past decade arguing that most of crypto is speculation dressed up as innovation. People sometimes ask why, then, I co-host a digital assets conference at Duke every February. It’s a fair question. I learn a lot from reading filings and enforcement actions, but I also want to hear from the people writing the rules, building businesses under them and putting money into those businesses. I want to ask them questions and give them a chance to challenge my arguments. Occasionally, those conversations change my mind. More often, they help me explain more precisely why I’m skeptical. That’s why Jimmie Lenz and I started Digital Assets at Duke. We bring regulators, builders, investors and critics into the same room at a university. They don’t have to agree, but they do have to take each other’s questions seriously and answer them in person. Registration for DA@D 2027 opened earlier this week. We’ll meet February 10–12 in Durham, with attendance capped at 250. We expect to sell out. If you want to argue with me about crypto, come join us. Details and registration: https://lnkd.in/eRrcrdzH The conference announcement: https://lnkd.in/eXZMxSQy
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Lee Reiners, CFA shared thisMy latest article for The Conversation U.S. reflects on how Trump’s personal crypto profits undermined the industry’s push for looser regulation, and how that tension played out in the fight over the CLARITY Act. If you weren’t following the debate closely, the article offers a concise account of what happened and why. It’s easy to lose the larger story amid the legislative details, competing proposals and political arguments. I wanted to bring those pieces together for readers who saw the headlines but didn’t track every development. At the center is a tension between the president’s personal financial interests and the industry’s legislative ambitions. You have to dance with the person who brought you to the ball, but in the end, Trump’s crypto grift came with real political costs for the industry.How Trump’s crypto winnings undermined the industry’s push for looser regulationHow Trump’s crypto winnings undermined the industry’s push for looser regulation
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Lee Reiners, CFA shared thisThe U.S. Securities and Exchange Commission’s proposed Regulation Crypto Assets is an extraordinary gift to the crypto industry. It would give crypto projects easier access to retail investors, immediate token liquidity without a mandatory insider lockup, broad preemption of state securities laws, and a self-certified path out of securities-law treatment. The proposal is especially generous to the venture firms and other insiders that buy tokens early and cheaply, then depend on public liquidity to cash out. Remarkably, the SEC declined to require an insider lockup even though its own economic analysis recognizes the investor-protection benefits, and even Coinbase and a16z suggested restrictions on insider sales. The legal foundation is also aggressive. The SEC acknowledges that these investment contracts are ineligible for Regulation A under the specific authority Congress provided in Section 3(b). So it is invoking its general Section 28 exemptive authority to construct a parallel public offering regime of up to $75 million. My latest article explains why I see this as regulatory capture in action: policymaking by crypto, for crypto. Read here: https://lnkd.in/eTBgChpJRegulation Crypto Assets: Policymaking by Crypto, for CryptoRegulation Crypto Assets: Policymaking by Crypto, for Crypto
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Lee Reiners, CFA shared thisSEC Chairman Paul Atkins recently argued that the Declaration of Independence and Adam Smith's The Wealth of Nations express the same philosophy and that both support the SEC's current deregulatory approach to crypto. His history lesson doesn't withstand scrutiny. The Founders certainly championed private property and commerce. But they were also deeply concerned about concentrated private power, political favoritism, and the ability of wealthy interests to capture government. James Madison warned of economic factions. Thomas Jefferson warned of an "aristocracy of our monied corporations." Adam Smith defended free markets but also believed money and banking belonged within a framework of public law. History matters because it shapes today's policy debates. If we're going to invoke Jefferson, Madison, and Smith to justify changes to financial regulation, we should be faithful to what they actually wrote. My latest article explores why Chairman Atkins's reading of Adam Smith and the American founding falls short and what that means for the SEC's retreat from crypto enforcement. Read it here: https://lnkd.in/eqdAdbZHPaul Atkins Misreads Adam Smith and the American FoundingPaul Atkins Misreads Adam Smith and the American Founding
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Lee Reiners, CFA shared thisMost of the debate over the latest CLARITY Act text has focused on crypto ethics, DeFi, and the stablecoin-interest loophole. But Title I may prove more consequential over time. Title I would codify the crypto industry’s “separation theory”: a token can be sold as part of an investment contract while remaining a non-security itself. It replaces Howey’s focus on economic reality with a dense statutory taxonomy, limited disclosure obligations, weak investor remedies, and certification processes that will invite regulatory arbitrage. A token with no meaningful function can land in the bill’s residual digital-commodity category and avoid Title I altogether. At the other end, issuers can structure around the bill’s formal list of prohibited financial rights while preserving the economics of an investment in an enterprise. The SEC under Paul Atkins has already adopted the same central premise through interpretation. Congress is now preparing to make it durable law. My new post explains why that will produce chaos, not clarity: https://lnkd.in/eXYgvfwM #Crypto #FinancialRegulation #SecuritiesLaw #CLARITYActWhy Title I of the CLARITY Act Will Produce Chaos, Not ClarityWhy Title I of the CLARITY Act Will Produce Chaos, Not Clarity
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Lee Reiners, CFA shared thisThe federal government is moving on two tracks that are headed toward a collision. On one track, it is investing billions of dollars to accelerate quantum computing and requiring federal agencies to migrate critical systems to post-quantum cryptography by 2030 and 2031. On the other, policymakers are rapidly integrating quantum-vulnerable blockchain infrastructure into the financial system through stablecoins, tokenized securities, federally chartered crypto firms, and exchange-traded products. The crypto industry increasingly recognizes that it has a problem. Coinbase, BitGo, the Bitcoin Security Consortium, and others have begun preparing for post-quantum migration, and there is a growing technical debate over how blockchains should upgrade, protect exposed wallets, and address dormant assets that cannot migrate themselves. Financial regulators, however, have been almost entirely silent about what this means for custody, stablecoins, tokenized markets, collateral, and financial stability. The latest Senate draft of the CLARITY Act acknowledges that quantum computing threatens digital assets. But its response is limited to guidance, technical assistance, and “voluntary, market-driven measures.” It imposes no migration deadline, planning obligation, or quantum-readiness standard on the institutions it would federally license. My new blog post summarizes the problem, and my accompanying working paper proposes a federal quantum-resilience perimeter designed to protect regulated finance while preserving self-custody and leaving technical decisions to protocol communities. Blog post: https://lnkd.in/dXviQXdC Working paper: https://lnkd.in/dUgijZDJ This is a working draft, and I welcome feedback from financial regulators, lawyers, cryptographers, blockchain developers, market participants, and others thinking about the intersection of quantum computing, digital assets, and financial stability.The Quantum Clock Is Ticking: Financial Stability and the Regulation of Quantum-Vulnerable Digital AssetsThe Quantum Clock Is Ticking: Financial Stability and the Regulation of Quantum-Vulnerable Digital Assets
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Lee Reiners, CFA liked thisLee Reiners, CFA liked thisThe future of digital finance deserves more than hype headlines. It deserves informed debate, rigorous research and direct conversations with the people shaping what comes next. That's what Digital Assets at Duke is built around. Join us February 10 to 12, 2027, at Duke University. Today is the final day to register at early bird rates. Pricing ends at midnight! Get closer. Go to the source. https://lnkd.in/ekD-8JcY #DigitalAssetsAtDuke #DigitalAssets #Fintech #crypto #blockchain #DAatduke
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Lee Reiners, CFA liked thisLee Reiners, CFA liked thisDéjà vu all over again? (See Attached Snapshots) Thursday, Binance: "user funds are completely safe." Then "we'll cover all losses." And CZ, within the hour: "User funds are safe! ... I don't manage Binance (.com) anymore, but as a shareholder, I expect all user funds will be fully covered." Read the history for yourself in the attached snapshots: Terra: "steady lads." Celsius: "all funds are safe." Voyager: "customer assets are safe." FTX: "assets are fine." BlockFi: "all is good." And Kevin O'Leary, one month before FTX collapsed: "if there's ever a place I could be that I'm not gonna get in trouble, it's gonna be at FTX." Every one of them went to zero. Meanwhile, Paul Atkins, the Chairman of the U.S. Securities and Exchange Commission, the one official on earth whose entire job is to protect investors, has just watched the greatest theft from investors in the history of the world, and he has said nothing. Not a statement. Not a tweet. Not a word of concern for the people who were robbed. This is the man who had Binance in a federal courtroom, on allegations that it commingled and diverted customer money, and dismissed the case with prejudice so it could never be brought again. This is the man who ordered his own examiners, twice and in writing, to stop looking at crypto. This is the man who declared crypto the SEC's "north star," who told a Wyoming crypto conference that "very few" tokens are securities, who disbanded the Crypto Assets and Cyber Unit, sending its chief trial lawyer to OIT to fix printers, who dismissed Coinbase, Kraken, Consensys and Cumberland on top of Binance, who withdrew fourteen crypto-specific investor-protection rules in a single notice, who waved crypto wallet providers out of broker-dealer registration, who granted tokenized stock venues a five-year exemption from the definition of "exchange," who proposed letting investment advisers self-custody client crypto, and who sat on the board of a tokenization company and held millions in crypto investments right up until the day he was nominated. Paul Atkins did not miss this. He arranged it. He disarmed the only agency that could have stopped it, then stood in the doorway and waved the thieves through, and now that six billion dollars is gone he wants us to believe he has nothing to say. It is unbelievable. It is also entirely predictable, because there is nothing Paul Atkins can say about this heist that does not indict Paul Atkins. So when he finally does speak, expect the Orwellian version: a statement praising Binance for its "swift and transparent" response. I am not kidding. The Stark Reality is that the regulatory capture of Paul Atkins is so far beyond the pale that it cannot be overstated. This is not 1984. In 1984 the Ministry of Truth at least bothered to rewrite the record. This is Pyongyang: the state robs the citizen, the citizen is told he has been protected, and the official in charge of protecting him applauds.
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Lee Reiners, CFA liked thisLee Reiners, CFA liked thisCrypto firm Binance experienced a major hack yesterday, with $6.3 billion in crypto assets stolen from one of the platform’s hot wallets. This is the largest single crypto hack ever recorded, outstripping the $1.5 hack of Bybit in 2025. Observers believe state sponsored North Korean hackers were responsible and have already begun laundering the stolen funds. Stablecoin issuers Tether and Circle froze sizable portions of hacked stablecoins, but the hackers have still been able to launder other stolen crypto assets. These were allegedly Binance’s own funds in a company-controlled wallet, not customer funds. Binance says its user assets are “safe", and its insurance fund will cover losses. However, Binance has temporarily frozen withdrawals as a preventive measure. So far, the hack has not created major turmoil in crypto markets, but crypto observers are on edge, should Binance see more losses, an customer exodus from the platform, or if the underlying vulnerability allowing the hack is exploited on another platform or service. Crypto industry boosters are already playing defense, saying the industry’s quick response shows its tools are working, and that other parts of finance are just as vulnerable to such hacks. That argument doesn’t hold up very well. Crypto platforms are uniquely vulnerable to hacks, due to the same features that make it decentralized and permissionless, and that also help hackers launder or hide stolen funds. And, there just aren’t many examples of billion-dollar cyberthefts from traditional financial exchanges or brokers. There are also more regulatory protections and backstops in traditional finance when theft occurs. In crypto, even if a platform elects to restore losses, it’s still largely buyer beware. Crypto’s also had a bad year for security. Wallet providers Coldcard and Ledger experienced significant security breaches, the Kelp Dao Bridge suffered a $292 million hack, and 2026 has been the biggest year so far for single hacking incidents. Yet the industry is aggressively integrating itself into mainstream finance, despite concerns about inadequate regulatory oversight and robust industry-wide security standards. And the industry’s legislative and regulatory proposals do little to address these problems. The world should be the crypto’s industry oyster, with its friends leading every major federal financial regulator while the White House rolls out the red carpet. It should be smooth sailing. Instead, they are beset by problems largely of their own making. If the largest, most powerful and sophisticated crypto platform around is unable to prevent a multi-billionaire dollar hack, what does that say about the security and reliability of the sector overall? Policymakers need to see these security breaches as foundational risks present in an industry that’s still not ready for prime time – not as just bumps on the road to some promised innovation that has yet to appear.
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Lee Reiners, CFA liked thisLee Reiners, CFA liked thisFirst of all and this needs said since three people sent a DM joking about it, no, I am not the Binance hacker. Kindly ignore the $6B deposit to my OnlyFans. Meme content aside, the Binance hack shows a few core things about the crypto industry: 1) The fact Tether.io and Circle are freezing related funds without a court order. I have on countless occasions provided directly evidenced wallets associated with Russian intelligence, Hamas, drug dealers, so much more, and Tether does nothing. Key word: EVIDENCED. Tether is freezing wallets for this incident based upon ANALYSIS. I don't dispute that analysis, to be clear, but this is proof about what Tether's freeze decisions are based upon. 2) Binance's current losses not factoring frozen assets are in the realm of $3B. On the lowest end of Binance's revenue and the lowest end of a net profit margin, this would be not even one year of profit for them. At more realistic numbers, this is more likely closer to half of a year of profit for Binance. So yes, covering $3B out of their own funds isn't exactly a huge lift. 3) The sole reason why Binance has had so much revenue is due to knowingly facilitating money laundering. As just one example, https://lnkd.in/d3V9i__P 4) The facts that there are already hundreds of posts discussing the Binance hack and that the Binance hack is already an all-hands event for the analytics industry says everything you need to know about priorities. I was critical in the same way when Bybit was hacked. If 1% of the human capital put into the Binance hack was to be put into wallet labeling (merely sending messages on Telegram), analytics firms could label three continents at around 80% uptime through the next year. Again, these are decisions that are clearly being made with financial incentive as the driver: Binance is either a client or offering a cut, AKA money, and Binance doesn't want (and actively lobbies against) wallet labeling. Binance lost a fraction of how much they've enriched themselves facilitating activity that kills people. Business will continue as usual even if not $0.01 more is recovered. A hack isn't going to be what kills Binance. Meaningful enforcement action would be. Analytics firms going all-hands on the Binance hack isn't going to keep the crypto industry safe. Sticking two interns on messaging dealers on Telegram would be a start.
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Lee Reiners, CFA liked thisLee Reiners, CFA liked thisI am a member of an informal group called the Cryptoskeptics Forum. Today our group has released a Report to Congress and Market Study on the crypto industry. Following is the abstract from our Report: On September 15, 2026, the United States Senate rejected a motion to limit further debate and refused to move forward to a final vote on the CLARITY Act. Due to that very wise and welcome decision, Congress now has time to undertake a comprehensive assessment of the crypto industry and adopt legislation that is urgently needed to address the industry’s unacceptable dangers to our financial system, investors, and consumers. In our Report and the accompanying Crypto Market Structure Study, the Cryptoskeptics Forum analyzes the global crypto industry’s market structure and presents findings that raise significant concerns about (i) the global crypto industry’s expanding market power, excessive political influence, and pervasive misconduct, and (ii) the potential future development of an unaccountable global crypto cartel. In the absence of strong regulation and effective oversight, the global crypto industry poses unacceptable threats to financial markets and economies worldwide. The international crypto industry’s structure is dangerously concentrated, both horizontally and vertically. In addition, foreign crypto firms dominate important segments of the crypto industry and are largely immune from U.S. regulation. The crypto industry’s concentrated structure and its dominance by unregulated foreign firms pose great dangers to the U.S. and other nations, including the risks that crypto firms will (i) severely undermine the stability and integrity of financial markets, with catastrophic consequences for investors and consumers, (ii) significantly impair the effectiveness of law enforcement authorities in combating financial crimes, and (iii) seriously weaken the ability of central banks to control their currencies and monetary policies. In light of the crypto industry’s intolerable threats, Congress should reject all attempts to revive and implement the CLARITY Act’s toxic provisions. Instead, Congress should restore a level playing field for all financial institutions, with proper guardrails, by repealing the GENIUS Act and approving legislation that requires crypto firms to comply with the same essential prudential rules and public safeguards that govern federally-insured banks, securities broker-dealers, mutual funds, and regulated securities exchanges. Our policy recommendations are based on the generally accepted principle of “same activity, same risk, same regulatory treatment,” which the Financial Stability Board endorsed in 2023 as an essential principle for regulating crypto-assets. That principle should apply with equal force to providers of crypto-assets as it does to traditional financial institutions and traditional investment assets. The Report and Market Study are available (at no charge) at https://cryptoskeptics.org.Cryptoskeptics ForumCryptoskeptics Forum
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Lee Reiners, CFA liked thisLee Reiners, CFA liked thisGrateful to @IslandEdgeNews Peter Shields, MBAfor covering my appointment as Executive in Residence at the SUNY Old Westbury School of Business. Thank you to Interim Dean Bruce Marx and the State University of New York at Old Westbury community for the warm welcome. I look forward to mentoring students and connecting them with practitioners and real-world opportunity. If you work in banking, finance, or technology and would like to meet our students, Please reach out to me with a direct message DM. "The best way to multiply your gifts is to share it." https://lnkd.in/eDH9iyjh #SUNYOldWestbury #ExecutiveInResidence #HigherEducation #Mentoring #longislandedgeSUNY Old Westbury Names Antony Paul Executive in ResidenceSUNY Old Westbury Names Antony Paul Executive in Residence
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American Predatory Lending
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American Predatory Lending and the Global Financial Crisis is a multi-method interdisciplinary team working under the Bass Connections project within Duke University. This student-faculty undertaking has explored the state-level dynamics leading up to the 2008 Crisis. Our website is populated with the products of our collaborative research.
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