How to Regulate the ‘Wild West’ in the Crypto World
Cryptocurrency investors are well aware that regulation is inevitable. Will 2018 be the year we see regulation enforced? Is it possible to implement a one-size-fits-all approach with global regulators working together to regulate the sector?
“Fact is, that even though blockchain technology does not by-pass existing laws and regulations, the blockchain (r)evolution is still in its Wild West phase,” wrote Dr. Jeppe R. Stokholm, partner and general counsel at Black Swan, a Swiss venture capital firm.
He asks the “multi-billion-dollar question”: If no international standards exists, how can we then define and solve the legal impact of the Blockchain technology related to crypto currencies, crypto securities and smart contracts, assets and things?
While the question remains unanswered, Cryptonews.com spoke to some of the industry experts to find out their opinion about the ‘Wild West’ in the blockchain world and its regulation.
As there are more signs of attempts to regulate the crypto space, industry players warn not to hamper innovation and doubt that global regulation is possible.
“Regulation that still allows innovation is a great thing because it means the space is maturing, and regulators want to ensure fair and orderly business operations. There is no turning back. These technologies are here to stay and will provide a better, more decentralized future,” said Graeme Moore, vice president for marketing and communications at Polymath, a developer of the securities token platform.
Ted O'Neill, founder and chairman of the blockchain-based content platform Narrative agrees that more regulation is probably inevitable as cryptocurrency becomes more mainstream, but this could be counterproductive for the sector.
“If it becomes too regulated, its value diminishes, which is perhaps a goal of many governments and institutions. I’d prefer to see governments take the stance that Japan has, legitimizing cryptocurrency and encouraging its adoption,” said O’Neill.
The chairman of Narrative added that he “would be shocked” if there were any kind of global rules regarding crypto as too many governments have vastly different agendas. Nawid Habib founder of ICO HeadStart, an ICO (initial coin offering) fundraising platform, shares the same opinion: "The international cooperation in regard to this matter is quite hard to realize. States within certain unions have different opinions, let alone if you take all countries around the world into consideration.”
While O’Neill added that most governments cannot even decide if crypto should be classified as a currency or as an asset/property.
“The beauty of crypto is that it empowers people in a way that is antithetical to most government agendas. The freedom and accessibility we associate with crypto are truly endangered if we over-regulate,” O’Neill stressed.
Oscar Hartmann, co-founder of the VLB (Vehicle Lifecycle Blockchain) project believes that we are moving towards a “more definitive stance” and that various state regulators around the world are talking in relation to the crypto asset space.
“Some of the regulators prefer a more welcoming and amicable approach – recognizing both the great potential of the emergence of such assets and the underlying technology, as well as the inevitability of the social and economic progress they represent,” Hartmann told Cryptonews.com.
Others place emphasis on their determination to protect consumers from the "wild western" nature of this rapidly growing space. According to Hartmann, this is not necessarily a bad thing, as it gives the honest players a set of rules they could follow without any uncertainty.
“[The uncertainty], by the way, is way more unhealthy for the space,” co-founder of VLB added.