Good Week Bad Week?
Liina and I are back again talking Good Week Bad Week in Crypto. I have to confess that I am still buzzing from London. Last week I was chairing the Blockchain 360 conference in the Excel centre on June 13 and 14. Organised as part of the Informa group conference, the Blockchain theatre was packed on both days.
Armed with headphones, mics and glasses (the last piece a nod to my printing out my notes with smaller than usual fonts) it was a very fast paced two days. I met up with my good friend Brian Heinin who was also taking part in one of the panels and we hung out that evening too – crashing the London Tech Week party in Shoreditch where we met up with fellow Irishman Shane Kehoe of SVK Crypto – the leading crypto fund in London. Shane is an amazing man and his company is leading the way in all things crypto in London. He hosts monthly meetups (where almost 1000 people attend) and produces daily updates on the crypto market. His company also announced last week that they were partnering with BlockOne, the organisation behind the EOS blockchain, to jointly administer a $50million fund. It’s all big numbers in crypto.
Highlights of the Conference was a panel on regulation which featured Brian, founder of a Blockchain Europe group on Linkedin, John Salmon (legal) Hogan Lovells, Nicole Sandler (legal) Barclays and Jeremy Millar (chief of staff) ConsenSys (which was co-founded by the co-founder of Ethereum and also recently opened offices in Dublin).
The big problem is that there is little or no regulation surrounding Initial Coin Offerings (ICOs) with various governments and financial regulators looking to use existing financial regulation to apply to the cryptocurrency market. None of the panel felt that was a good idea as it is akin to comparing apples with oranges.
The US SEC uses the Howie test to see the new coins are securities or utilities. The Howie test basically says that if a financial instrument is easily traded, is expected to increase in value and that value will both be promoted by the organisation behind it as well as the organisation benefitted from the increase in value – then the coin is a security and is subject to a whole raft of quite onerous and expensive rules.
John Salmon pointed out by that simplistic definition the Wimbledon debentures are also securities – every five years or so they are issued, they are freely traded and the rise in value benefits the prestigious tennis club. Of course, they are not declared as securities as that would be unreasonable.
The panel decided that regulators needed to brush up on their knowledge of the industry and to apply reason not existing, inflexible rules in order to regulate this space.
Back to Good Week Bad Week – of course the first piece of news is that an SEC senior manager said at a conference in San Francisco that neither Bitcoin nor Ethereum were securities. This is not law but it is a good sign of understanding coming forward.
In other news Blockchain Ireland was launched last week in Ireland. This portal is part of an initiative promoted by Enterprise Ireland, the IDA and ConsenSys. I am delighted at this news as Ireland has a fabulous opportunity to again lead the world in this fast growing area.
Other news discussed in our video this week include Thailand’s reversal of ICO banning and introduction of a framework. A German drinks chain offering blockchain based rewards provided by qiibee – a fabulous loyalty company working in the blockchain area. I had occasion to interview the founder earlier this year. Best of luck to them.
And then there was the continued volatility of the markets – falling to below a market cap of 300 billion – and due in part to yet a another exchange hack, this time in South Korea. So not good news for investors.
However, the announcement of Blockchain Ireland is a very positive step for Ireland and I was still buzzing as I said at the outset from London, so a good week overall.