Caitlin Long Blockchain

I’ve Left Symbiont; Musings About Progress and What’s Next for the Sector

NEWS – I have left Symbiont to pursue other opportunities in the blockchain sector.

I’m as optimistic as ever about bitcoin and blockchain, and will continue to work eagerly to advance these technologies as solutions to many of the problems faced by the mainstream financial sector.

Inflection points are always good opportunities for taking stock of progress and ruminating about what’s next. The blockchain sector is only in its first inning, IMHO, and here are areas where I see need for a lot more work in the coming years. You’ll find me in the middle of many of these!

  • Clarify ownership of securities by restoring property rights to the true owners of securities. The industry is off to a good start, but fixing the issue will take time. This remains my biggest passion in the field. No, capital markets are not fair to savers, especially mutual funds, pensions, insurers and Mom & Pop, because the system of indirect ownership is susceptible to inaccuracies and to mischief by bad actors who have identified holes in the system that enable them to skim value from regular folks (e.g., the Dole Food case). Blockchain is key to solving this problem.
  • Free hundreds of billions—maybe trillions?—of capital currently trapped on corporate balance sheets due to payment system latency, which is a deadweight loss on the economy. It makes zero sense for high-cost-of-capital companies to trap their expensive capital in bank accounts as “comfort deposits” waiting for payments to clear. And that’s why we need to…
  • Expand the network effects of bitcoin even more than the staggering growth of the past 9 months, to bring down bitcoin’s bid-offer spreads and ensure daily liquidity remains at institutional levels. More companies will dip their toes into using bitcoin as intermediary for cross-currency transactions, without ever touching the bitcoin directly. A lot more education and infrastructure support (especially!) are needed to bring bitcoin into widespread use for corporate payments, but it’s no longer a crazy concept.
  • Bring ICOs into regulatory compliance, thereby democratizing the capital formation process. A big lesson from the ICO boom is that regular folks matter to capital formation. Small investors are largely excluded from the securities issuance process, which is clogged and too bureaucratic—especially for small businesses. And why should prepaid software licenses be considered securities, when tradeable gift cards and prepaid cell phone minutes are not? Watch for the states to step in here, and keep a special eye on my native state of Wyoming—where grassroots efforts have gathered support for a bill, which Rep. Tyler Lindholm will introduce during the February legislative session, that would exempt utility tokens from the State’s securities and money transmission laws. Wyoming has zero state income or corporate taxes and strict privacy laws governing LLCs formed there, so passage of this bill would give the blockchain sector a clear, welcoming state regulatory jurisdiction and may cause some of the industry’s businesses to re-domicile there. Hat tip to the Coin Center for its assistance here to the Wyoming Blockchain Coalition, in which I remain highly active.
  • Create efficiencies by enabling “coopetitors” to share infrastructure for maintaining a single, immutable copy of the data they share, thereby de-duplicating work and obviating the need for reconciliation. This, at bottom, is the basic value of blockchain for the developed world. And it applies to financial services, health care, supply chain, governments and much more. Enterprise blockchain is slower-moving and less sexy than the cryptoasset part of the sector, and it will take time to meet its transformative potential, but its promise is very real.
  • Serve the unbanked, both at home and abroad. Cryptocurrencies have brought valuable financial services to the unbanked abroad, and the undocumented at home, via their mobile phones, many of whom are skipping right over the “old world” concept of a bank account and straight to cryptocurrency wallets, just as emerging countries skipped over landlines to mobile telephony.
  • Empower individuals via blockchain property titles and self-sovereign identity. I’m grateful to Medici Ventures for introducing me yesterday to legendary economist Hernando de Soto to learn about his new venture with Overstock, which aims to bring billions of people out of poverty by providing them a means to record titles to their property on a blockchain. During the Medici event, I also heard a cypherpunk motto that fits with the zeitgeist of the community:Privacy is the ability to selectively reveal oneself to the world.”
  • Bring US regulatory-compliant, tax-efficient, 100% reserved or self-custodied vehicles for wealth management and inter-generational wealth transfer to the HODLer market. Stay tuned for developments on this front.
  • Reduce—or eliminate—unfair information advantages in capital markets by implementing truly decentralized blockchain. There’s an age-old power struggle between the sell-side and buy-side in securities markets over market structure decisions. The buy-side has generally been takers, not makers, of these decisions. But blockchain will change that. Watch the enterprise blockchain space, where the sell-side will endeavor to cut costs while also maintaining its information advantages by implementing versions that have back-door centralization, but the buy-side will push back and insist on a level playing field that reflects the natural decentralization of financial transactions. This is also a multi-year undertaking, and it’s only just beginning.

Amid the get-rich-quick mania that has gripped the sector, remember that most of us “old-timers” are in it to solve real problems. Some of these problems will take years to solve, if not decades. Decentralizing legacy, centralized market structures is hard. It’s meaningful work. Worth doing.

So much work to do!

I wish my friends at Symbiont well, and remain a shareholder of the company.

To reach me, please DM me here on LinkedIn, Twitter or Facebook, or on



Why Compliance and Risk Managers Should Embrace Blockchain

Why Compliance and Risk Managers Should Embrace Blockchain

Wolters Kluwer Mag Cover

This article appeared in the July/August issue of Practical Compliance and Risk Management, a journal published by Wolters Kluwer. It is printed here with permission.

New technology exists that provides a shared, immutable record of who owns which asset, and exactly when they bought or sold it. It provides a perfect audit trail. It can automate business processes that today are duplicated by many parties, and are slow, manual and error prone. It can enable real-time, desktop monitoring by both external regulators and internal compliance and risk management professionals alike. Distributed Ledger or “blockchain” technology is capable of all of this and more.

This article first explains what blockchain technology is, as well as related concepts such as distributed ledgers and smart contracts. It then addresses common questions about blockchain technology and how it can help the financial services sector. Lastly, it discusses blockchain uses for solving real-world problems and the promise of blockchain for more efficient and effective regulation.

Answers to common questions:
(1) One blockchain or many?
(2) Standards?
(3) Cybersecurity?
(4) Speed/scalability?
(5) Privacy?
(6) Timing?

To continue reading, please click here: PCRM_04-17_Long

Speech to Insurance Regulators: Fixing a Fixable Solvency Risk to Insurers

Speech to Insurance Regulators: Fixing a Fixable Solvency Risk to Insurers

Slides available here:  naic_long_miami_dec2016_vfinal

Thank you to the National Association of Insurance Commissioners (NAIC) for your invitation to speak at your Fall meeting about how blockchain technology can fix a low-probability, but high-severity threat to insurer solvency:  lack of beneficial ownership tracking of securities by the securities industry.

Blockchain is not the only solution to this problem, but it is an exciting and complete one!

I care passionately about restoring title to the true owners of securities–in other words, giving asset owners direct ownership in their assets–and this is a major reason why I jumped to a blockchain start-up after 22 years on Wall Street.  No, you do not actually own the securities you think you own in your brokerage account!

During nearly all of those 22 years on Wall Street, I was fortunate to work in and around the insurance industry and care deeply about its financial health.  In the old days during regulatory exams, insurance regulators used to audit the paper certificates held in insurers’ vaults to verify that securities recorded on Schedule D were actually there.  This is no longer possible to do today, owing to the indirect manner of securities ownership and the use of omnibus accounts by layers upon layers of securities industry intermediaries.  It’s time to go back to the future and restore beneficial ownership tracking–or, better yet, actual ownership of securities by those who think they already own the securities!

With permission from my company, Symbiont, I’ve included my NAIC E Committee presentation slides in this blog post.  This is my second speech to the NAIC on this topic, and the first in a public forum.

As Delaware Chancery Court Judge Travis Laster said in a recent speech to institutional investors, “I want you, the institutional stockholders of America, to take back the voting and stockholding infrastructure of the U.S. securities markets…The current system works poorly and harms stockholders…The plumbing needs to be fixed.  A plunger exists.  The takeover [of securities industry plumbing by institutional investors] doesn’t have to be hostile.  It can be friendly.  But it needs to be done.”

Indeed, it does.

As I’ve said many times, the biggest beneficiaries of blockchain technology are long-only investors:  insurance companies, pension funds, mutual funds, and Mom & Pop investors.  They’re the biggest losers from today’s lack of beneficial ownership tracking in the securities industry.

I stand ready to educate and assist the insurance, pension and mutual fund industries in fixing this problem.  How can regulators measure insurer solvency when securities–especially U.S. Treasuries–may be over-issued?  Even federal securities regulators do not know how leveraged the financial system truly is, because multiple financial institutions report that they own the very same securities at the same time–and securities regulators have no means by which to back out the double- or triple-counting of assets.

Lack of beneficial ownership tracking is a low-probability but high-severity risk to insurer solvency, but it is real.

Blockchain technology is one of many possible solutions to the problem.

Thank you for your interest!


MUST READ for Corporate/Securities Lawyers Regarding Blockchain

Delaware Chancery Court Judge J. Travis Laster makes the crystal-clear case for why the securities industry should embrace blockchain in this terrific speech. He shares my concern for the securities industry’s plumbing mess that prevents people from actually owning the securities we think we own, and he lays out the gaps between Delaware corporate law and federal securities law that have caused some very expensive balls to drop.

In Judge Laster’s words, “The good news is that you have a plunger that you can use to clean up the plumbing. That plunger is distributed ledger technologies, the technology that underlies bitcoin.”

“The current system works poorly and harms shareholders…These technologies could reunite legal and beneficial ownership of stock and eliminate many of the problems identified [in his speech].”

INDEED, Judge Laster!!!  Well done!!!


Caitlin’s Top 10 Blockchain Predictions for the Next 12 Months


Below are the welcoming remarks I gave as chairman of IMN’s blockchain conference, which was held on September 28, 2016 in New York City. IMN has kindly given me permission to reprint them here. Enjoy!


Good morning and welcome to IMN’s Blockchain Conference!  Julius Hill, CEO of IMN, asked me to chair this conference to bring perspectives from the three different hats I’ve worn in this young ecosystem:  (1) a bank hat (serving on Morgan Stanley’s distributed ledger technology working group beginning in 2014), (2) an independent hat (working over the spring and summer to advance the ecosystem, especially with regulators) and (3) a start-up hat (joining Symbiont as chairman and president a month ago).

Specifically, Julius asked me to speak about where the ecosystem stands and where it’s going.  


Where do we stand?  

One word:  deluge.

The deluge is coming from potential customers–if you think about it, it’s quite unusual that customers are beating down the doors of vendors, not the reverse, but that’s what the ecosystem is experiencing. The deluge is also coming from regulators, who want to see demos of the technology in action. And the deluge is also coming from personal networks.  Just for fun, I counted the number of people who sent me direct-messages on social media alone during my first week at Symbiont, not counting emails or calls:  208 people. And it was the week before Labor Day.  And it hasn’t slowed down that much. Others in the ecosystem are experiencing the same, so the deluge is not unique to Symbiont or to me.

Something big is happening.

Duncan Niederhauer shared what I think is the best insight about it. He’s the former CEO of the NYSE, and before that he ran equities at Goldman Sachs. He was early to join the boards of two blockchain start-ups. His insight? Most of the innovation on Wall Street came from the front office during the past couple of decades. Innovation will come from the back office in the coming decades, for myriad reasons.  I think he’s right.

Credit Suisse’s announcement yesterday is a perfect example of why he’s right. Credit Suisse executed a syndicated loans pilot through the R3 consortium, in which 14 major financial institutions participated. This is the most complex proof-of-concept undertaken to date in blockchains. It’s also the first project in which multiple buy-side firms participated. And Credit Suisse announced that the project successfully met milestones, not merely that it kicked off. Yes, big things are really happening.

And that brings us to today’s conference. 300 of you are here today, representing all major banks, exchanges, credit card companies, clearinghouses and buy-side firms. All major financial sector blockchain companies are here, as are 18 corporate sponsors. And an issuer is here too–, whose CEO will give the keynote this afternoon.  


And where do we go from here?  

Frankly, it’s easier to talk about the end state for blockchain implementation than it is to see the the near-term steps to get there. So I’ll throw caution to the wind and predict 10 things that will happen in the next 12 months.  All predictions are my own and are not endorsed by IMN or my company, Symbiont. And they’re worth the piece of paper they’re written on, which is not much! These are “educated guesses” based on the breadth of what I’ve seen in the ecosystem, not based on direct knowledge.  

Also, none of these are investment recommendations, so please do not rely on them in your decision making. Caveat emptor!

Here are my predictions for the next 12 months in blockchains:

  1. A well-known private company will kick off preparations for its IPO on a blockchain, thus forcing a fundamental change to the plumbing of securities offerings on Wall Street. I’d bet most people who work in the securities industry don’t even understand that when entrepreneurs take their company public in an IPO, they’re required to sign over title to every single share of the company to the DTC — even shares the entrepreneurs aren’t selling in the IPO. If I’m an entrepreneur, why would I be happy about that? If there’s a viable alternative that allows entrepreneurs to keep title to their own shares, I see the IPO market pivoting to it quickly. Yes, I think that will start to happen within 12 months and a big, important issuer will drive this change. 
  2. Banks will widely adopt blockchain in the syndicated loan market, finally eradicating the fax machine as a prevalent means of communication among parties in this market. 
  3. Insurers and reinsurers will complete a reinsurance syndication on a blockchain. 
  4. A credit card company will deploy a blockchain as its network in mobile payments. 
  5. Bitcoin will generally continue to trend “up and to the right” — in hashpower, transaction volume and price. (But I explicitly do not recommend buying or selling bitcoin!) 
  6. “Failures to deliver” will start happening, as some blockchain start-ups and projects will fail to keep up with their hype. I think a shake-out has already begun, through which a very small number of production-quality blockchain platforms will break out as clear leaders based on what they’ve actually done, not what they might someday possibly maybe do. Folks, it’s hard to deliver blockchain software that meets institutional-level requirements for performance, security and functionality. And let’s face it — players in this ecosystem issue press releases at the drop of a hat, announcing that they’ve started a project or contributed X thousand lines of code, but it seems very few press releases disclose something actually finished, or a milestone met, or software that demonstrably works well. Within the next year, an enterprising reporter will dig into this and write a critical, “big reveal” story. 
  7. More central banks in small countries will follow the lead of the central bank of Barbados, which green-lighted a blockchain start-up called Bitt to create a digital Barbados dollar that uses Bitcoin’s blockchain as an alternative method for settling foreign exchange. Small central banks are searching for alternatives because local banks are losing access to US financial system, owing to the retreat of American correspondent banks from small countries — a trend called “de-risking.” This is choking off trade, which is the lifeblood of most small economies.  Folks, this an unintended consequence of laws requiring U.S. banks to comply with strict anti-money laundering and know-your-customer regulations. These laws are hurting the developing world — and, ironically, boosting Bitcoin as a valuable alternative payment system. Kudos to Barbados for its creative solution! 
  8. will complete the first public securities offering on a blockchain, and skeptics will be surprised at how well the blockchain-settled securities trade relative to Overstock’s existing common stock. 
  9. The Delaware Blockchain Initiative will improve the delivery of all kinds of government services by the State, which will fundamentally boost its relationship with its constituents. Other states will follow Delaware’s lead. 
  10. The Bank of England will issue sterling on a blockchain, causing the pound to become the preferred intermediary currency for cross-border payments and creating a new competitive advantage for London’s financial markets post-Brexit.

OK, I may be too optimistic on a few of these (especially the timing of #10). Caveat emptor! These predictions are worth what you paid for them.  But I believe they’re all directionally correct. It will be a most exciting year ahead!