Regulation and the Future of Cryptocurrency at Token Summit II

On December 5th, 2017, the Mission Bay Conference Center in San Francisco hosted cryptocurrency enthusiasts in suits, hoodies and everything in between. Token Summit II, presented by William Mougayar, author of “The Business Blockchain,” and Nick Tomaino, founder of 1confirmation, was a hub for cohesion and problem-solving in the blockchain space. Experts gathered from every corner of the industry to discuss government regulation, cryptocurrency initiatives and the future of blockchain technology.

Here are some of the highlights from the conference.

Regulation Trials and Tribulations

Nancy Wojtas, partner at Cooley; Kathryn Haun, board member at Coinbase; Stan Miroshnik, CEO and managing director at Element; and Lowell Ness, partner at Perkins Coie, demystified and further debated looming government regulation (and lack thereof).

Common questions that echoed throughout the panel: Which regulatory agency should investors focus on? Are tokens securities? Will there be new regulation or does existing regulation suffice?

Haun believes that “people in the ICO space are myopically focused on the SEC.” Although the SEC has already issued guidance and issued emergency action, there is an “alphabet soup” of other agencies that could issue further regulation. Federal and state regulatory agencies such as the DOJ could also intervene –– which could involve prison time for breaking the law.

Wojtas, on the other hand, explained her perception that because the SEC is leading the charge, other agencies are taking a backseat. She speculated that “[people] are free to continue to do what we are doing,” while being sensitive to all regulations.

The short answer from the entire panel on whether or not tokens should count as securities: the government hasn’t figured it out yet. They agreed that until the government sets a precedent in court, there is no clear answer.

A utopian scenario in terms of regulating the industry as a whole would entail new regulatory schemes that specialize in blockchain technology and tokenization. The panelists suggested that there is a low likelihood for new regulation in the United States but that investors might see clarity once there is a body of cases that grows from tokens challenging the government in court or vice versa.

Token Transparency and ICO Insights

Messari, a new transparency and disclosures project, shared their vision to become the open source data library for the universe of crypto assets –– an SEC EDGAR-like solution for consumer protection. Ryan Selkis, founder of the Messari project, summarized the crux of cryptocurrency: Quasi-fiduciaries are selling quasi-securities, and there is no gold standard for disclosure…

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