London's Token2049: Regulatory Uncertainty is a Recurring Theme

London's Token2049: Regulatory Uncertainty is a Recurring Theme

At Thursday's Token2049 conference in London, regulatory uncertainty was a constant theme.

Through Zoom, Galaxy Digital CEO Mike Novogratz stated that U.S. Securities and Exchange Commission Chair Gary Gensler was intelligent and committed, but questioned the regulatory authority in crypto. Novogratz spoke to the crowd in London.

The Galaxy chief stated that it is difficult to determine whether crypto is considered a security when it is lent to another person. He also lamented the prolonged regulatory uncertainty. Novogratz said that the lack of education in crypto has contributed to some of these problems.

He said that the crypto community as a whole, including myself, did not do enough to lobby domestic politicians and educate them so they understand what they are talking about.

CBDCs are looming

Novogratz stated that the biggest decision will be how stablecoins should be approached. He warned against any options that would give central bankers better dashboards, and described himself as a "giant alert ringer" about central stablecoins. Novogratz was referring to central bank digital currency (CBDC). "Governments aren't good at innovation and I don’t think anyone in West wants to give away as much privacy as the Chinese.

"Going through this pain together"

An early morning panel that focused on institutional crypto trading reiterated the need to be clear.

Michael Moro, the CEO of Genesis Trading, pointed out that U.S. financial regulators have created a confusing regulatory environment.

"When Chairman Gensler says that most tokens out there trading are a security, but doesn't name the securities, that's more regulator confusion," Moro said. Darren Jordan, managing Director of BitGo Europe, agreed. He said, "We are all going through the pain together."

The panelists said that it is a common misconception that crypto is unregulated, much like the Wild West.

Max Boonen, founder and former fixed-income trader at Goldman Sachs, said that "it feels like being in a bank" at times.

DeFi Focus

Decentralized finance (DeFi), believed education should focus on smart contracts and regulation. Stani Kulechov is the CEO of Aave, a lending platform. "Every second of every second, the entire ecosystem can be audited by anyone. This amazing risk mitigation can be achieved that we didn’t have in 2008!