A recession is never pretty- it means the wiping out of thousands of jobs, capital flight, and quite often, a miserable and dark few years for anyone caught up in the storm.
But never did a darkness not give way to dawn- and today, this was exactly what several crypto executives discussed today during a panel discussion held during Crypto Expo Asia.
During the panel discussion, titled “Signs of Spring- Emerging from yet another crypto winter”, prominent executives were present to give their views, including Hayden Hughes, Co-founder and CEO of Alpha Impact, Henryk Abucewicz, Head of international Sales at Coinhako, Marouen Zelleg, Director of Growth at Infura ConsenSys, and Timothy Tan, Head of Sales and Marketing at Cactus Custody, Matrixport. The session was moderated by Adrian Chng, founder and Chairman of the Singapore Fintech Association and Fintonia Group.
The discussion comes at an important crossroads for the industry- just this week, the SEC laid out charges against Binance and its founder Changpeng Zhao and accused the company of working to evade US law, and many are drawing parallels between this case and the collapse of FTX.
Yet, many are also vocal in their criticism of the SEC’s handling of the crypto industry, as well as other actions by regulatory bodies like the CFTC.
The panellists too expressed mixed feelings about the state of regulation and its role in the future of the crypto industry.
“Give us rules, and we will play by them”
Given the failures of the past year, the panellists noted the end of the old narrative of crypto self-regulation, and welcomed the new narrative that regulators need to get involved with crypto regulation as well.
But while the SEC and its chairman, Gary Gensler, are probably public enemy number 1 in the crypto space right now, Hayden Hughes, Co-founder and CEO of Alpha Impact, advised everyone to try and see the broader picture.
“Plenty of people are criticising Gensler and the SEC for their brand of regulation, and I don’t agree with the suits against companies like Coinbase as well. But I can see where they are coming from- the failures of the past years have made regulators take notice of us. And I do believe that regulation is necessary. The lack of clarity harms the industry, and regulators need to provide us with rules to work with, and once they do that, we will play by them.”
-Hayden Hughes, Alpha Impact
Henryk Abucewicz of Coinhako also concurred with this sentiment, noting that without official guardrails being in place for companies, institutions are less likely to trust companies and join the industry. As such, Henryk believes that 2023 is high time that regulators step in.
“There are still plenty of jurisdictional turf wars and loose definitions on what crypto is and should be classified as, and many companies are still exploiting this. But while this is happening, honest companies still need to create and enforce their own guardrails. But official guardrails that are standardised will be able to create a more conducive macro environment and more meaningful involvement from institutional players.”
-Henryk Abucewicz, Coinhako
Regulation is good- but what is good regulation?
While ‘good regulation’ may be the demand of many players in the crypto industry, what that means is not exactly set in stone.
For starters, while the panellists agreed that it was time for regulators to do their job, they were also critical of the lawsuits that were being brought upon Binance and Coinbase by the SEC.
Timothy Tan, Head of Sales and Marketing at Cactus Custody, Matrixport, argued that ‘if companies and customers are slapped with lawsuits just because they dont understand what licenses they need to apply for, this only sets the industry back.”
There is perhaps some precedent with regards to legal principle here- actions are usually only considered as criminal conduct if there was a law stating that the action was a criminal offence during the time of its commission.
And given how fast the crypto space is evolving, old rules and frameworks may not necessarily be applicable. Instead, Timothy believes that the right way to go is to look at what companies do and to adapt regulations from traditional finance.
“There are two ways that regulators can go about trying to regulate the space- first is to focus on regulating what crypto is, and the second is to regulate the entities that deal in crypto. The second one is a better option because really nobody knows what defines crypto and how to classify it. It’s better to just understand how companies work and where the risks lie for customers and companies.
If we can regulate how much risk crypto entities can take, and how they regulate that risk, especially with regulations similar to those already present in traditional finance, and to regulate how these entities operate.”
-Timothy Tan, Cactus Custody, Matrixport
Marouen Zelleg, Director of Growth at Infura ConsenSys, also noted that part of why so many regulators were concerned with crypto was the rampant speculation that goes on within the markets, and that there was a difference between what he called ‘tech crypto’ and ‘money crypto’- and that the companies behind these different cryptocurrencies are often building completely different things.
Unfortunately, however, while companies who are building infrastructure and innovative tech will often be part of ‘tech crypto’, there are also very legitimate reasons for them to want to also be part of ‘money crypto’, especially if it means quicker and easier sources of funding.
“It’s not that easy to separate these two. And while regulators may want to treat these two things separately, as they should, the truth is it’s easier said than done.’
-Marouen Zelleg, Infura ConsenSys
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