Schwab Brings Crypto to 38M Users; North Korea 'Simply' to Blame for Recent DeFi Hacks

This episode of the CoinDesk Podcast Network's Policy Protocol explores two pivotal developments in the crypto space: Charles Schwab's expansion into crypto services, which now offers Bitcoin investment to its 38.5 million brokerage accounts, and a major DeFi hack attributed to North Korea, impacting protocols like Aave and CalpDAO through a bridge exploit on Layer Zero. The hosts, Renato Mariotti and Rebecca Reddick, discuss how Schwab’s move could normalize crypto for mainstream Americans, potentially shifting political sentiment on Capitol Hill and paving the way for more favorable regulation. In contrast, the DeFi hack underscores systemic vulnerabilities in cross-chain bridges and the need for stronger cybersecurity standards, especially as DeFi grows. Guest Ari Redboard, global head of policy at TRM Labs and former federal prosecutor, emphasizes a dual strategy: strengthening defensive cyber measures while aggressively pursuing offensive cyber operations and diplomatic pressure against state-sponsored actors like North Korea. He calls for U.S. regulators to provide clear rules for compliant innovation while intensifying enforcement against non-compliant offshore exchanges that facilitate illicit fund off-ramps. The episode also highlights a landmark legal battle in the Ninth Circuit Court of Appeals over whether prediction markets fall under CFTC jurisdiction, which could lead to a Supreme Court showdown and reshape the regulatory landscape for digital assets globally.