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Congress looks at taxes, oversight, crime in fintech bills
Lawmakers focus on fostering innovation while ensuring technology isn’t abused

Companies that facilitate bitcoin payments, called merchant services providers, received $158 billion in bitcoin last year, which was just about 1 percent of the economic activity on bitcoin’s blockchain, according to Chainalysis, which analyses such transactions. (Avishek Das/SOPA Images/LightRocket via Getty Images photo illustration)

Corrected 4:25 p.m. | Cryptocurrencies involve cutting-edge technology, but Congress is aiming at age-old problems when it comes to financial technology legislation: taxation, crime and jurisdiction to set the rules.

A review of the latest fintech-related bills by CQ Roll Call shows lawmakers’ latest efforts are focused on fostering innovation by some and making sure the technology isn’t abused by others.

Wall Street czar Linda Lacewell takes on regulation
Fintech Beat, Ep. 38

Linda Lacewell, superintendent of the New York State Department of Financial Services (AP Photo/Mary Altaffer)

When it comes to regulating Wall Street, perhaps no one person is more important than Linda Lacewell, the superintendent of New York’s Department of Financial Services. On her one year anniversary in office, she talks with Fintech Beat about changes to the BitLicense, the Apple Pay card and her 2020 priorities.

Courts, without law for guidance, setting value of cryptoassets
Judges determining currency values receive little input from policymakers focused on other issues

Inconsistent classifications and ill-formed definitions of bitcoin and other digital assets are being left to the judiciary to sort out. (AFP via Getty Images)

Bankruptcy judges are used to deciding the value of assets, but for cryptocurrencies, which can halve or double in value in a matter of months, determining how much one party is owed gets tricky.

It’s an issue that could be mitigated by regulators or lawmakers, but despite myriad efforts focusing on digital assets this year, U.S. bankruptcy judges are unlikely to get much guidance, according to several lawyers who track the cryptocurrency industry.

Bitcoin Intermediaries
Fintech Beat, ep. 37

LONDON, ENGLAND - OCTOBER 24: A visual representation of the digital Cryptocurrency, Bitcoin on October 24, 2017 in London, England. (Photo by Dan Kitwood/Getty Images)

Iran, North Korea and Crypto
Fintech Beat, Ep. 36

Looking toward the North Korean side of the Joint Security Area within the DMZ from Panmunjom, South Korea. (Photo By Niels Lesniewski/CQ Roll Call)

Fintech Beat gives an inside view from former intelligence officials on how sanctions and political gyrations between the Trump administration and Iran and North Korea can impact financial technology, and how these regimes can use cryptocurrencies in nefarious ways.

Crypto enthusiasts say new products lend bitcoin credibility
Futures considered crucial to gain buy-in from financial industry

The big development at the end of 2019 was the first trading of what’s known as physically settled bitcoin futures, following approval from state and federal regulators. Those bitcoin futures trade through regulated exchanges and clearinghouses. (Avishek Das/SOPA Images/LightRocket via Getty Images photo illustration)

The cryptocurrency industry is hailing the emergence of complex bitcoin investment products as a needed step to attract new investors while lending credibility to the digital asset and building a pathway to regulatory clarity.

The big development at the end of 2019 was the first trading of what’s known as physically settled bitcoin futures, following approval from state and federal regulators. And while the launch of these investment products hasn’t convinced everyone that they will lead to buy-in from a skeptical financial industry, those leading the charge say it’s a crucial step.

Can - and should - an algorithm be ethical when it comes to financial technology?
Fintech Beat, Ep. 35

Can an algorithm be ethical? (iStock, Getty Images)

Algorithms have evolved into to powerful engines of financial technology. But they don’t always live up to the hype, as algorithmic models fail to take account of basic societal concerns like fairness, privacy and bias. Fintech Beat sits down with Michael Kearns to find out what can be done to make algorithms “ethical.”

Fintech Beat sits down with the former chief of the Federal Reserve’s open banking unit
Fintech Beat, Ep. 34

The Federal Reserve building. (Caroline Brehman/CQ Roll Call)

Open banking’s benefits involve using customer consent to develop new financial products to revolutionize financial services. But critics claim open banking can at times bypass customer consent by using digital avatars and other online tools to infiltrate and collect customer data. Fintech Beat sits down with the former chief of the Federal Reserve’s open banking unit to get answers.

The Year in Fintech
Fintech Beat podcast, Ep. 33

LONDON, ENGLAND - OCTOBER 24: A visual representation of the digital Cryptocurrency, Bitcoin on October 24, 2017 in London, England. (Photo by Dan Kitwood/Getty Images)

Fintech Beat sits down for a one-on-one with Maxine Waters
Fintech Beat podcast, Ep. 31

House Financial Services Committee Chairwoman Maxine Waters, D-Calif., departs from a meeting of the House Democratic Caucus in the Capitol on Tuesday. (Caroline Brehman/CQ Roll Call)

Rules, privacy issues loom for fintech industry in 2020
Advocates foresee sparse congressional activity for 2020

Facebook changed the fintech industry's focus this year when the social media giant announced plans to launch its own cryptocurrency called Libra. (Photo by Chesnot/Getty Images)

The nascent financial technology industry started the year faintly optimistic that the 116th Congress would pass bills in its favor. But as 2019 comes to an end without legislation, the industry isn’t even expecting action in 2020. And for that, they’re feeling relieved, not disappointed.

Facebook Inc.’s midyear announcement that it planned to launch a cryptocurrency, Libra, upended the industry’s focus, tilting the legislative strategy from pressing hard for beneficial bills to staying clear of measures aimed at checking the social media giant’s ambitions to transform commerce.

Regulators warn about fraudsters creating synthetic borrowers
Information cobbled together from multiple people used to make fake identities, establish credit

The Federal Reserve has issued warnings about synthetic identity fraud and is expected to release a report in early 2020 outlining ways that financial companies can mitigate the problem. (Caroline Brehman/CQ Roll Call file photo)

The financial technology industry that’s upending consumer finance could be the solution to a kind of identity fraud that’s dogging traditional banks and fintech companies alike.

It’s called synthetic identity fraud, where instead of stealing one person’s information, criminals synthesize a false identity using information from many people — usually those unlikely to monitor their credit, like children, the elderly, prisoners or the homeless. Fraudsters then establish a credit history for the fake person over time until they can trick banks or financial technology companies into lending them money.

The transfer agent: A deep-dive into how blockchain technology can help capital markets
Fintech Beat, Ep. 31

Public blockchains such as those that underpin cryptocurrencies like bitcoin are most at risk because anyone can participate. (Dan Kitwood/Getty Images file photo)

Curing the Small Business Recession
Fintech Beat podcast, Ep. 30

Big data poses big problems for banks, experts say
Risks to security and privacy cited as products and services develop rapidly

Minnesota Rep. Tom Emmer says big data systems generate “astounding” amounts of data. “This is the future, and there’s no going back from here,” he said at a Nov. 21 hearing. (Bill Clark/CQ Roll Call file photo)

The financial services industry’s use of big data and data aggregation tools has the potential to benefit millions of consumers but also could disproportionately affect the privacy and security of vulnerable populations.

That’s the take of experts who testified to the House Financial Services Committee’s Task Force on Financial Technology last month, hoping to convince lawmakers that more attention is needed on the issue.