Regulation and Past: Key Takeaways from Consensus 2023


Group EEA, within the guise of Govt Director Dan Burnett, Director of Technical Packages Chaals Nevile, and Director of Gross sales James Harsh, was on the bottom at this yr’s version of Consensus by Coindesk, which was held in Austin Texas from April 26-28. 

Listed below are the important thing takeaways as reported by our group and different information sources. 

There is no such thing as a doubt that regulation was the main theme on the convention, and particularly regulatory uncertainty within the US.

Among the many key trade figures voicing their apprehensions was Paul Grewal, Coinbase’s Chief Authorized Officer. In a panel dialogue Grewal identified that he was bracing for a possible lawsuit from the SEC, an occasion that might shed some mild on the SEC’s particular grievances with Coinbase’s operations. The anticipation of such a lawsuit underscores the extent to which crypto corporations are flying blind within the present regulatory surroundings.

Kate Brady, Head of Communications for Web3 at PepsiCo, mentioned how she was being stymied in her work by the shortage of regulatory readability. This underlined that regulatory uncertainty is a possible menace to the competitiveness of American corporations within the quickly evolving Web3 house.

A great illustration of the place this uncertainty is coming from was seen within the “The Turf Warfare: Veterans of the SEC and CFTC Weigh In” panel. This introduced former commissioners and employees of the SEC and CFTC right into a dialogue across the relative strengths and weaknesses of every company in supervising crypto markets. The divide is massive, with the SEC asserting that just about all crypto property, together with Ethereum, are securities and fall beneath its purview, whereas the CFTC claims that sure digital property, together with Ethereum, are commodities and needs to be regulated by the CFTC.

The convention displays on these matters have been mirrored in lots of discussions the EEA group had with member organizations and potential members, in addition to in a number of facet occasions held across the formal convention.

Regardless of these worries, it will be fallacious to say that Consensus was held on a down be aware. Fairly the opposite. As our group present in a lot of their discussions, there was a common sense of optimism amongst many current.  

The distinction between the scenario within the US and what’s taking place in Europe, Asia-Pacific and past is one apparent grounds for this optimism. Firms who’re feeling the headwinds within the US are in lots of circumstances well-placed to proceed their growth within the many crypto-friendly hubs in these areas that not solely have extra regulatory readability, but in addition are dwelling to proficient growth communities who’ve developed good working relationships with native enterprises.

Our group additionally discovered a robust sense amongst many who, popping out of probably the most troublesome intervals for crypto final yr, developments in blockchain have been carrying on apace and that it was time to maintain constructing. That added to the optimistic really feel on the convention round blockchain and decentralization.

In a extra hopeful vein for American crypto and blockchain corporations, Patrick McHenry, Chairman of the US Home Monetary Companies Committee, and US Senator Cynthia Lummis, confirmed that the Home Monetary Service Committee and Agricultural Committee would maintain the primary joint listening to available on the market construction surrounding digital property in Could 2023.  Such hearings may very well be an necessary step in the direction of offering extra regulatory readability for corporations working on this house.

Whereas each McHenry and Lummis expressed optimism about future developments in crypto regulation, based on our group on the bottom, the final temper was extra ‘wait and see’. There may be numerous urge for food for regulation within the US, and recognition that doing it effectively is necessary, however the expectation is that it’s going to take numerous time. It can even be necessary for the trade to get collectively and work out what they’re focused on, or threat shedding a chance to get a seat on the drafting desk.

The stakes nonetheless are excessive. Regulatory uncertainty doesn’t simply have an effect on crypto corporations. This, as one Coindesk editor famous, was underscored within the speak by Pepsi’s Brady. Regardless of PepsiCo being a mainstream American firm and never intrinsically a part of the crypto trade, it’s aiming to make a mark in Web3. Nonetheless, the absence of regulatory readability is proving to be a major barrier. As talked about above, this has implications for the competitiveness of American corporations within the Web3 house. 

There have been a number of different necessary matters on the agenda as effectively. One which caught the eye of our group was crypto accounting. 

With the worth of cryptocurrencies fluctuating wildly each day, it may be troublesome to maintain monitor of the present worth of 1’s holdings, and to correctly account for positive factors and losses once they happen. 

One panel dialogue on the convention targeted particularly on the distinctive challenges going through companies in relation to crypto accounting. The panelists mentioned the significance of correct record-keeping for tax functions, in addition to the necessity to correctly monitor the worth of cryptocurrency holdings on a stability sheet.

Numerous progressive options have been offered on the convention to assist cope with these challenges. These embody specialised accounting software program that integrates with standard cryptocurrency exchanges, in addition to instruments that enable for computerized monitoring of positive factors and losses over time.

The EEA hosted an unique Member-Solely breakfast, sponsored by EY. Regardless of the early hour, quite a few EEA Members turned as much as meet and mingle in particular person, many for the primary time. 

Paul Brody, head of blockchain at EY and a member of the EEA Board, was a number and participant. Co-chairs Michael Gonzales of EY and Dyma Budorin of Hacken talked by means of the place the DRAMA Working Group is in growing finest practices for accounting within the DeFi trade. Different corporations represented embody OpenZeppelin, Microsoft, ConsenSys Mesh, Wanchain, Noves, Certik, C4, Hyperledger, Bitwave, Entersoft, Cartesi, and Cryptio

The breakfast supplied a chance for EEA members to community and share insights on varied matters associated to blockchain expertise. Total, this occasion served as a useful platform for collaboration and data sharing amongst trade leaders in attendance.

You’ll find extra about Consensus 2023 on Coindesk.


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