CoinShares CSO: Inconsistencies in regulatory enforcement of laws hurting industry
At Bloomberg’s ‘The Future of Digital Assets’ briefing in London, Chief Strategy Officer for CoinShares, Meltem Demirors, spoke to Alex Webb about CoinShares’ goals as a company, crypto-regulations, and how “nothing is decentralized, but it doesn’t matter anyway.”
According to Demirors, society has become captive to the five largest companies on the S&P, which in total represent 15% of the S&P, namely, Microsoft, Apple, Amazon, Google, and Facebook. She posed the question,
“If the Internet created open protocols but the networks became captive to these organizations and are proprietary, what’s going to happen with blockchain networks?”
Demirors stated that CoinShares’ goal is to create permissionless networks that can enable new models for how people engage with platforms and networks that “aren’t as proprietary.” She also said that CoinShares is not reliant on surveillance capitalism or monetizing user data as a business model.
“The question is what’s the currency of blockchains? So far it’s been transactions and transaction volume.”
The CoinShares CSO also spoke of how cryptocurrencies aren’t as decentralized as one would expect. She pointed out how in a lot of circumstances, development of the protocol itself — the code — is highly centralized. Demirors highlighted how there aren’t that many different entities running these networks for a 51% attack to be implausible. The CoinShares CSO cited the case of NEO, a network with a multi-billion dollar market cap, that is essentially controlled by just 7 nodes.
“In the case of Bitcoin, there’s a group of volunteers, but some of them are funded by for-profit companies, notably Square, who recently hired a number of Bitcoin core developers to work on the development of the code.”
Demirors also compared the present regulatory situation with cryptocurrencies to the original crypto-wars back in the 90s. She recalled how encryption, which at the time was considered a weapon, was used by civilians and companies for non-military purposes.
“I think we’re going to face some of the same challenges here, because this is a new paradigm.”
Consequently, she said that there have been a lot of inconsistencies in how regulators choose to enforce laws, adding that that’s never a positive situation. She also spoke about a statement made by former CFTC chairman, J. Christopher Giancarlo, who said that the CFTC allowed Bitcoin Futures to move forward in 2017 only because it wanted to bring down the price of Bitcoin.
“That’s a clear example of a regulator picking winners or losers. That’s not the role of a regulator.”