Regulating The Crypto Economy Book Launch

Regulating The Crypto Economy Book Launch Presented by: Iris H-Y Chiu, University College London Date: March 8, 2022 Introduction - What motivated the writing of this book? - The legal frameworks for the book and its limitations - Key teasers in the book - What else I would have liked to do What Motivated The Writing Of This Book? - The crypto-economy has been perceived principally through a financial lens, but what attracted me to the area are the possibilities for innovation and new entrepreneurship, the 'enterprise lens'. - Crypto-economy- a convenient short-hand term for the space for economic activity that is taking place in permissionless blockchains, mainly the Ethereum blockchain - Room for regulatory policy to play a constructive steering role, in the framework of 'regulatory capitalism' where regulation is not regarded as the antithesis to enterprise and innovation but as constructive supporter, providing a useful order that markets may fall short of - In unpacking what is desirable regulatory policy, book identifies key areas that would benefit from regulation, but focused on areas of my expertise. Hence regulatory policy comes back round to focus on business structures and financial regulation The Importance Of The Financial Lens- A Stock take - Crypto-economy developments have been wrapped in 'financial framing' but this should not obscure the innovative and commercial activities that are arising in this space - Financial framing includes: • Cryptocurrency ether being the private money of the Ethereum blockchain, as it is the native token of the blockchain protocol, transforming in terms of monetary and investment functions? • ICOs and fund-raising- which is also the point in time the book proposal was conceived and accepted - But fund-raising is just the start to an 'enterprise' lens of the crypto-economy- real question is what Daps would do and how this leads to economic transformations - However, 'twinned' phenomenon of commercial and financial development at the same time, e.g. stablecoins, NFTs and their financialization - Book was premised on 'locating' finance as supporter, intermediator and going alongside commerce/economic transformations, an idea which is perhaps debatable! The Enterprise Lens - Interesting and novel Daps - What policy may support new forms of peer-to-peer commerce that can be alternative and competitive - What effects on the development of such commerce if we merely leave the market to work, with its financialized focus? Regulatory Agenda - Promoting entrepreneurialism • Need to sift out 'wheat' from the chaff- regulatory criteria can distinguish genuinely Dap businesses and provide a bespoke regulatory framework for starting a business and raising finance • The story about 'Sponsy'  Failed ICO flogging business development documents on ebay  Business idea vague but collection of charitable donation proceeds can be done by a dot.com, why is a blockchain needed?  Is there a need for there to be standards for a blockchain-based peer-topeer business application so that entrepreneurs do not contrive to fit into the hype, and ill-intentioned people do not mislead well-meaning investors? Key Teasers - Book deals with the need for blockchain enterprise laws? There is also a potential for meaningful regulatory competition amongst jurisdictions - Fund-raising laws for pre-development projects, earlier than start- up financing. SEC enforcement in the US and its effects: are we content with ICOs being funded by accredited investors and financial institutions, such as VC capital? Should these businesses, which are meant for broad peer-to-peer participation become dominated by financiers and the wealthy? - Should private money and payment systems be subject to regulation and how? Can regulation/CBDC be responses? - What is DeFi for and does it defy financial regulation? The Legal Frameworks For The Book And Its Limitations - Enterprise formation and governance as enabling rules • - Comparative discussion with some pioneering examples Financial law and policy relevant to and wrapping around the enterprise lens • Fund-raising and after • To an extent consonant with the thinking behind the EU MICA but goes beyond MICA's scope • Payment services • High level thoughts about DeFi, its purposes and its interaction with the enterprise lens Limitations of the Book - Not a book that deals with the uses of permissioned blockchains and their mobilization in the conventional economy - Not a book that seeks to apply existing regulatory policy especially financial regulation to the different crypto- finance developments we see - Not a book that assumes that market order is sufficient and hence extensively analyses private law and rights in order to see how market participants' interests may be sufficiently or insufficiently catered for - The crypto-economy raises various implications that cannot be fully covered in the book such as role of competition law, digital and data regulation, consumer protection laws and regulation and sectoral-specific issues other than finance What else I would have liked to do - There is the possibility of dedicating one or two to the development of virtual worlds from centralized gaming operators to decentralized blockchain platforms, and how the virtual world economy poses specific novelties for the crypto-economy and their needs - The development of NFTs took off right at the end of the book writing and it would be disruptive to re-organize the book but trends can be discerned in terms of NFTs as a gateway to financially mobilizing real and virtual world assets - effect of the SEC's enforcement actions against ICOs would channel development funding into accredited investor avenues. - how accredited investor/financial entity ownership shapes business development in the crypto-economy is an important area for empirical research