The world heavily believes in Blockchain’s triumphalism, blinded by media coverage and Venture Capitalists who make grand, sweeping gestures by investing millions into Blockchain companies that we barely understand. As many are quick to jump into the crypto-game without understanding the technology’s value, purpose, and future.
I’d like to give you a small introduction about who I am and why I am interested in Blockchain. I am a law student and a musician. I have had the unusual opportunity of being able to travel internationally as a musician while also furthering my legal education. I ran a musical at the Sydney Opera House for a month straight, and I wish I could explain how that was even possible; however, I had a lot of downtime, so I spent my days reading about Blockchain, it’s capabilities, and it’s awkward dance with international regulations.
We Don’t Know what Blockchain is Actually Capable Of
Blockchain has capabilities beyond measure, and it is going to take time for the technology to be implemented into the backbone of every country’s infrastructure. This summer, countries like Thailand, Korea, and Singapore, created their own regulation administrations or boards to control anti-money laundering and fraud in cryptocurrency. In theory, countries are finding ways to combat the systemic issues that come with using Blockchain, which is that money is being used for criminal purposes or it is acquired unlawfully. Like many securities before crypto, people will find loopholes and exploit aspects of the new security because it is barely understood. That prevents us from seeing Blockchain’s true purpose. By being burdened by the constant misuse of Blockchain, the public is blinded by what Blockchain is set out to accomplish. In 2017, Deloitte found that 26,000 Blockchain projects launched the previous year became idle. Some may argue that this is because funding is diminishing for Blockchain startups, yet without knowing how Blockchain will benefit society, most of these companies are speculative. Not only will these companies struggle to find investors, these companies will fall into legal traps where they are likely to violate regulations already in place. As laws develop, companies will emerge; as companies emerge, laws will slow down the company’s development; it’s a cat and mouse scenario.
ICOs Need to Follow Regulations That Already Exist
Sound businesses should generally follow laws already in-place, and they should understand them. I am not a lawyer, this is not legal advice; nor am I a businessman; I am certain this will be refuted in some way; but I do believe that cryptocurrencies are a hybrid of “security-commodity” that should follow SEC protocol in the US, as well as reasonable regulations internationally. There is a reason why the SEC continues to freeze companies like Telegram for not registering as an ICO (Initial Coin Offerings). Understandably, companies are trying to strike while Blockchain is hot, but that should not prevent companies from being patient when it comes to following the SEC’s regulations. U.S. Supreme Court in SEC v. W. J. Howey Company defined an “investment contract” as a contract, transaction, or scheme in which 1) a person invests money in a common enterprise, 2) with a reasonable expectation of profits, 3) to be derived solely from the entrepreneurial or managerial efforts of others. I won’t go any further. The law in this case speaks for itself. For more, click here. http://bit.ly/2pUTilp