Even if you’re not familiar with cryptocurrency, you’ll notice one thing about its market trends — it has been trending higher and higher in the past decade. Then suddenly, in mid-April this year, Bitcoin and other cryptocurrencies plunged significantly in value. That’s because the U.S. government has started the conversation it’s been putting off for some time: Should cryptocurrencies be regulated and, if so, how? Here are some reasons the discussion needs to move forward. CRIMINAL USAGE OF CRYPTOCURRENCIES Is cryptocurrency still popular with criminals? A blockchain data firm Chainalysis reports that illicit activity made up 0.34% of all cryptocurrency transaction volume. That’s roughly 2% lower than in 2019. While the percentage has dropped for overall activity, Kim Grauer, head of research at Chainalysis, told NBC, “Still, ransomware was by far the biggest category in terms of activity growth (311% year over year), and we’re seeing an all-time high for dark-net market activity.” Ransomware is malicious software that hackers use to infect a computer, then demand a fee to unlock it. The bounty is typically paid in Bitcoin or other cryptocurrencies, which are difficult to trace. REGULATORY UNCERTAINTY IN THE U.S. Although criminal usage of cryptocurrency is rather miniscule today, how do you resolve issues with ransomware? One rule proposed by the U.S. government would require anyone holding crypto in a private digital wallet to undergo identity checks if they make a transaction of $3,000 or more. Many believe, however, that this isn’t a long-term solution. Jesse Powell, the CEO of Kraken, the world’s fourth-largest digital currency exchange, told CNBC that the U.S. is more “shortsighted” than other nations and “susceptible” to the pressures of incumbent legacy businesses, like banks, that “stand to lose from crypto becoming a big deal.” Technically, the Securities and Exchange Commission (SEC) regulates most crypto, but even Hester Pierce, a commissioner of the SEC, says, “We’ve seen other countries take a more productive approach to regulating crypto. Our approach has been to say no and tell people [to] wait … we need to build a framework that is appropriate for this industry.” In some ways, crypto is profitable like the stock market is, except you can also use it to purchase goods and services. While this regulatory framework isn’t clear just yet, the longer it takes to establish, the more the American public, like you, might lose out on these multibillion-dollar markets. WHAT WILL HAPPEN TO CRYPTOCURRENCY IN THE U.S.?
INSIDE FINANCIAL ARCHITECTS
How do we get better each and every day? That is a question that shareholders Chris Cousins and Pat Marody ask themselves a lot as they lead this company into the future. 2020 was a huge challenge, and it would have been very easy to sit back and stay the course and survive rather than advance. Chris and Pat
elected for the latter. We told you in the May edition of this newsletter about The Q5 Experience, a newly formed collaboration that involves FAI, Empowering Futures, LLC (The LifeMethod), and Absolute Succession that works with business owners to build transferable value before they sell. In layman’s terms, Q5 is a proven process that sets companies up for transition. In addition in 2020, the Leadership Team at FAI was introduced to a concept called EOS. This stands for Entrepreneurial Operating System. This was an introduction that turned out to be a game-changer. Pat, Chris, Kristi Laporte, Kim Keith, Melissa Scheib, and Matt Dery were all introduced to EOS Strategic Coach Chris Meso. Chris helps leadership teams like the one at FAI clarify and simplify their day-to-day operations and achieve their vision as a company. Furthermore, it is a system that sets up the organization for success by teaching them about accountability, ability to delegate and elevate, predict, systemize, and structure. After hearing Meso explain what EOS entailed and how its system would work for the leadership group at FAI, it was a no-brainer to sign up with Chris and learn more. And this was a decision that has worked out extremely well for FAI. The Leadership Team meets every Tuesday for an hour and a half and goes through a meeting called an L-10 or Level 10, where they discuss headlines for the week, a to-do list, and company “rocks.” Then they solve issues that are important for the entire company and our clients. As Meso states, “The meeting pulse every week is to make sure that everyone is on the same page and that issues are identified, discussed, and solved by all. No one in the meeting is left out.” EOS and the L-10 meetings have been so effective and refreshing so far that the entire Support Team at FAI now meets every Wednesday, too, using the same format. This has really been a terrific eye-opener for the firm and has helped us highlight again what we are all about. Our core focus has been established as “Helping people live a life of freedom by simplifying the complexity of money decisions.” Thanks to EOS, this core focus and our core values remain at the forefront of everything that we do.
The information contained in this newsletter is derived from sources believed to be accurate. You should discuss any legal, tax, or financial matters with the appropriate professional. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Registered Representatives offer Securities through The O.N. Equity Sales Company, Member FINRA/SIPC (www.FINRA.org/ and www.SIPC.org). Investment Advisory Services offered through O.N. Investment Management Company and FAI Advisors, Inc., Financial Architects, Inc., FAI Advisors, Inc., and The LifeMethod are not subsidiaries or affiliates of The O.N. Equity Sales Company or O.N. Investment Management Company. We have representatives currently registered in the following states: AL, AZ, CA, CO, DC, FL, GA, IL, IN, MA, MD, ME, MI, MN, MO, NC, NH, NV, NY, OH, OR, PA, SC, TX, VA, WA, and WI.
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