foreign
[Music]
we have three speakers Florian glass
trained as a lawyer on software
developer with many years of experience
working full-time in the blockchain
space
Florian is aware of the key issues in
the intersection of crypto assets and
regulations
Floridian glass has confound and lead
the German blockchain associations
has president for its first four years
he advised political decision makers at
the German and European level of
blockchain Regulation
Marina is the co-founder of aoec we
change to propel UAE Revelation to
become defi friendly since 20
2017 Marina has been advising crypto
projects on governance and legal matters
with focus on decentralization
sorry please if you wanna any question
to the speakers uh you can talk outside
of the room sorry
okay
Define it she previously led the
advisory team of blockchain accelerator
co-founded
co-found.it and co-found a crow
investment platform and Simon Paul wrote
educating on crypto and public
blockchain since 20 050.
um well welcome
um please give it up to the speakers
[Applause]
so thank you everyone for joining our
talk my name is Marina and together with
Simone and Florian we're going to talk
about the crypto regulation and its uh
influence on the open blockchains so
what we see today it's an increased
activity of crypto regulation all around
the world
okay sorry we'll just wait for two
minutes because the counter then starts
so what I will talk today is basically
on the um increased regulatory
activities from all over the world we
are coming from Europe and we're trying
to talk about the trends that happen all
around the world but basically what
we're expert is in the European law and
why this is interesting is because last
week we had some new laws being
finalized in Europe and they are I would
say the beginning of what's happening
globally
so um as
sir of course so Florence Simone and I
started the European Crypt initiative
which is a non-profit based in Brussels
exactly two years ago when the first
crypto assets uh draft for marketing
grouped assets regulation has been
issued so basically this has been leaked
and we have seen it online and we said
we should do something about it so
immediately in the next week we
basically started talking to The
Regulators about this topic
um
okay sorry there's no presentation but
I'm going to go uh on without it so
basically what we are doing is talking
to the regulators and trying to explain
what is happening in the crypto area and
trying to educate them on what we're
doing and what blockchain is so what
happens in generally in the last two
years specifically is that there has
been an increased regulatory activity
from Regulators all over the world and
what is very important is that this
activity is coordinated so it is
happening in Europe it's happening in
the US but what is also very very
important is that is happening on the
international level on International
organizations so basically organizations
like farev ayosco and some other
organizations are very actively looking
into crypto and also very actively
looking into D5 specifically in the next
I would say one and two or two years we
will see reports from all of those
organizations being published and this
will be a big influence not only in the
world where we're coming from so the
European Union but basically it is going
to be a big influence also in Colombia
in South America Asia and all over the
world
what it is important is that many times
those Regulators they are very well
intended and we are talking to a lot of
them they are interested to learn more
but the problem is that they don't have
that much time so of course we have like
an hour one hour talk with them and we
need to be very precise on what we are
discussing in this really short amount
of time and the problem is that many
times because they don't have this I
would say knowledge or at least
opportunity to learn more the outcome of
this regulation is even more negative
that they wanted to at the beginning and
so I think that educating Regulators
talking to them and even educating about
crypto in general is very very important
so besides what's happening uh I would
say on the international level we have
seen also a lot of bad news happening in
the last year and this is not helping
The Regulators are seeing and mostly
reading news that are negative and this
is then reflected in regulation we have
seen in the markets in crypto assets
draft edit a new article specifically
talking and specifically being I would
say a consequence of what happened with
Terra Luna and we also can see this in
the stablecoin bill that is written in
the SEC
so in a way it's also important of what
is the image that the whole crypto
Community projects in the world but also
in the specifically for The Regulators
so why this time right now is so
important for all of us to talk about
regulation is basically because we know
that crypto exists for more than a
decade but at the beginning it was
really seen more as a toy for geeks I
would say and it was not seen as
something that would be problematic for
the financial system which is right now
so in from 2020 or for the last I would
say a couple of years there is an
increased concern from the regulator of
what crypto is possible we have seen a
lot of scams we have seen D5 being
developed but also the increased usage
of nfts and this is what is also
concerning from The Regulators
especially when it comes to consumer
protection and so what we need to do in
the future is think about really new
options and New Alternatives
and how to have an even more increased
dialogue with The Regulators because the
all the development that happened in the
last years will most probably not be
just copy pasted in the future because
of specific limitations that we will we
will see coming from the regulatory
world
so I'll just come up to date so this is
what I was talking about an increased
activity from The Regulators in the last
few years
as I said last week we have seen markets
in crypto assets regulation and the
transfer of funds regulation being
finalized in Europe and what does this
mean for this community what does this
mean for the people that are building
applications and they're building
protocols for the people that are also
using these applications and protocols
and I will only give you a few examples
that are I would say quite important and
again those are European examples but
it's in a way only the start because the
markets in crypto assets regulation is
the first worldwide overarching
regulation for crypto
so if you are a crypto asset service
providers for example is an exchange or
a wallet you will need to be
incorporated in Europe and you will need
to get a license from a European
National competent Authority what is
important is that you're also going to
be need to be compliant with anti-money
laundering rules if you are not you will
not be able to issue or to offer
services to the European Union which
means that the European user is only
going to have the opportunity to use
services that are regulated and
compliant are their marketing crypto
assets regulation
also an interesting part is the crypto
asset issuance so if an entity wants to
issue crypto Assets in Europe and offer
it to the crypto us to the European
users you will need to be incorporated
again in the European Union but at the
same time also write a white paper very
similarly to like a very short very
similar to an IPO and in this white
paper there are a lot of rules around
marketing but also there needs to be a
report on the energy consumption of this
specific crypto asset and the blockchain
that it uses
this is going to have a very important
effect on the listing of different
crypto assets so again the crypto assets
that are not going to be compliant they
will not be able to list it on exchanges
they're offering their services in the
European Union
and let me come to the most critical
part of the markets in crypto assets
regulation so this regulation was
basically written because of DM and so
the aim is to regulate stable coins
there is a big part in the regulation
that regulates stable coins and this is
I would say the most critical part there
is a cap of 200 million transactions per
day in the European Union that needs to
be observed by the issue of the
stablecoin but also by the regulator so
there are obligations like reporting
obligations that the crypto issue
stablecoin issue needs to send quarterly
to the regulator
which means that they need to send all
the information of the number of
transactions the users Etc and if those
limitations are not met the the
basically it's not possible to operate
in Europe anymore the license that this
stablecoin issues would have they will
lose it at that moment and there's
another part the marketing computer
assets regulation even talks about
the stopping of issuance of stable coins
from those stable coin issuers this is I
would say quite critical and we're going
to see how it will work in practice but
the markets in crypto assets regulation
is public so you can read it online and
then form your own opinions the last
part from my side is the non-fungible
tokens door those are excluded from the
regulation but only the ones that are
unique and usually linked to an art and
also each shoot in a very small
collections so that's all for me I give
the mic to Florian
thank you
thank you Marina
oopsie
Springer of bad news Okay
um whether I click here okay perfect
yeah so let's talk about the positive
sides of this regulation because it's
not just badge I mean that was pretty
bad I agree but
um not everything is that awful so the
scope of Mika of this Market in crypto
air regulation is limited in a sense to
centralized uh applications of crypto
technology meaning that decentralized
Finance nfts are officially not in that
scope yet so we expect in a sense a Mika
2 regulation to sort of follow up in I
don't know a few years and that's
something we'll address later
self-custodial wallets survived a pretty
pretty hard harsh attack from the
European Parliament we were afraid for a
few weeks like most of you probably that
they may be banned
so good news Europe still accepts uh
South custodial wallets going forward
proof of work also survived so there was
a real chance that proof of work assets
would be flat out illegal in Europe that
also was this year and I think they got
away with a slap on the wrist
so proof of work assets have been
labeled as unsustainable but there are
no consequences yet tied to it but the
foundation has been laid for a potential
ban later on or very negative tax
implications for holding them those
kinds of things
the result is in a sense sort of a white
elephant so it's not as bad because it's
sort of scoped to only regulate
centralized applications not the
decentralized ones however it's really
framing everything in the terms of the
status quo and in terms of financial
assets so Europe does not yet really
recognize on the legislative level that
crypto is more than just money
um and you know what we just celebrated
as wins are really just temporary
exclusions for The Regulators
um the long-term impacts that we see of
the regulation in Europe that has been
passed now and that is you know
following
um is definitely
um going to be looking at that it's
going to be looking at defined nfts much
more it's already on the radar of
regulators data they're writing reports
on this in the European commission and
the Parliament
and a big big question there is what is
actually decentralization is this a real
thing can we actually observe this in
the real world can we pinpoint
Regulators to assist them and say look
at that this is true decentralization
this is what we mean when we say
decentralization is not the same as
centralized services
the energy crisis in Europe of course is
real everybody knows that and so we
expect you know more sort of
restrictions around proof of work
um it's probably not going to be a
sustainable business or investment uh
for Europeans
um stable coins continue to be the most
controversial and sort of most
regulated topic going forward we expect
the U.S for example to draft a stable
coin bill in the next 12 months and
Europe will definitely uh you know
continue to be very strict on regulating
them funny enough nobody talks about
Facebook anymore and their stable coin
because they shelf the project now it's
just a Terra Luna as being the scapegoat
um we've all seen what happened with
tornado cash so privacy preserving
protocols will be very very
um highly regulated going forward so um
this is uh definitely still something
where we advise everybody to be super
super
um careful
yeah thoughts on the future
um right now the legitimacy of the
crypto space the perceived legitimacy of
the crypto space in the court of public
opinion is pretty low
it's maybe at its lowest point ever
um
the incumbents that we challenge with
this technology are super active in
spreading thought about crypto you can
read their reports
central banks of course Regulators on
the international level like the
financial action task force commercial
Banks and National Regulators they are
all sort of aligned on keeping this
technology from reaching Mass market
adoption in its current decentralized
form
and so you know there are two sort of
problems we have to address as a
community one is the fact that
regulation is certain
but the other one is that we do not have
the support of the public right now
we're literally a small Elite that's
sort of growing but not fast enough and
most people are not inside our bubble
and they sort of follow what they read
in the news and that's mostly bad so we
have to somehow come up with a way as a
community
to surface the goodness and sort of
label the bad stuff as what it is bad so
scam sex money laundering paid chills
and influences uninformed Investments by
the public in things like you know
stable coins that are going to explode
next week we should sort of not do that
and it's I think a collective failure of
the whole space that we haven't come up
with any effective means
um to to do this and um I want to give
it to Simon to to take this further
thank you
thank you so yeah uh what do we do now
and the future looks uh uncertain and
the global perception of crypto is not
ideal and maybe what we thought the
crypto would would make as an impact to
the world as not yet fully materialized
so we are at a very critical moment
because
as you as we said all The Regulators are
looking at us and the results that we
are pushing
forward and maybe not as wonderful as we
want them to be so
what we think now is that we have to be
a photo proposal like as an industry as
a community we have to
somehow and we'll have a plan for that
um create some form of proposal some
form of
initiatives that basically go from Trend
The Regulators front-front institutions
and explain what we can do what we are
doing today in a very positive manner
and with actual practical
mitigation proposals for all the risks
and all the issues that we see today
and to do that one of the critical thing
is to create some form of consensus
inside of the community inside of the
industry of what is acceptable and what
we can push forward because we
definitely don't want to give IDs to The
Regulators that would be contrary to the
values that we want to defend right so
there will be difficult choices to make
and there's a lot of potential solutions
that we can think about
both technological uh or in terms of
initiative that the community can make
but are they acceptable is this
something that we want to push forward
and this is an open question that we
will discuss later so for as an example
um the European commission launched an
initiatives to study whether it would be
meaningful to basically embed the
civilians of the blockchain or real-time
surveillance of public blockchain in in
some form of of a system that would be
used by The Regulators to basically be
alerted and and act on potential issues
happening on the public blockchains do
we want that do we do we do we support
this kind of initiatives do we regulate
interfaces of course this is a very big
subject and to another cache sanctions
really make in China
and this is still an open question do we
regulate and if so how do we want to
circumvent that by creating Shadow
interfaces uh is it a long-term solution
open question again do we want to
Leverage The these in some form like
creating identities that would be
recognized by institutions in some way
do we leverage on the the initiatives of
the institutions on the IDS because
there are some in Europe specifically
um
do we basically segment regulated and
Degen space
it's a potential solution and of course
the whole sanction in general is it's
it's a very big subject and still uh
with a lot of different implications
where there's a lot of also of open
questions you've all seen the
discussions recently about do we need to
basically sanction address at the
protocol level it's a very
uh dangerous question to us but also a
very practical one and the the answer
has to be has to be given at some point
so these are basically solutions that
could be uh moved forward do we want
that and basically to decide this we
need to decide what are the
non-negotiable values of of the the
community of the of the industry today
it could be a lot of things like uh
credible neutrality of the the public
networks is that is that the the most
important thing that we want to protect
is this like the composability like the
openness so we want to basically fight
every kind of you know kyc things that
could limit this composibility
uh is this the fight on self-custodian
wallets that we have to to prioritize is
it privacy preserving systems and it can
be all at once it can be all those
things but we need to to be sure that
where we cross the line and what
Solutions we can put forward or not
um and for this
I think uh it's very critical that we
have a very clear Way Forward and
there's a few things
that can be leveraged to move forward
with the with the institutions in
general the first thing is that
everything is not Bleak and there's a
lot of people
um inside of those institutions that
know about crypto and that are
interested by uh what's going on they
are open to suggestions and those people
we have identified a lot of them at the
EU level but there are some of them at
every single
um in every single institution worldwide
those people we need to help them and we
need to feed them with suggestions we
need to feed them with actual proposals
and so this is the main uh leverage we
have
um then do we have all the the good
Obviously good use cases of crypto that
we need to to push forward and to move
forward quickly
um that we've talked a lot about with D5
about DSi public good fundings
non-financial use cases of crypto all
those things uh together they bring
forward a very positive way of doing
crypto and this is something we need to
work on and of course there's the
constant Innovation and Improvement in
the space that is already happening and
that that we need to leverage so being
sure that there's the constant
information transmission of information
to the regulators and to the
institutions
um and maybe to do that I would like to
end uh with a call for the for Community
intervention so basically it's a call to
you
um in general and all the participants
here uh you you came here so you you're
basically interested by regulation and
and what's happening in in the future
you can help I mean all of you can help
because we need to there's so many paths
open today and there's of course the
path of Regulation is bad uh per se and
we want to be basically crypto to go
dark and and just don't care about the
regulation this is a way forward we want
to fully Embrace regulation and
basically cancel decentralization
meaning you know abandon all the all the
values that that we are trying to build
today we can create new standards we can
self-regulate
um like creating entities that that
bring rules forward that that are
followed you know
spontaneously by by the protocols when
they want to be when they want to be
compliant we can you know push to make
gasps maybe the crypto assets always
provider the gate keepers of crypto this
is for now more or less the approach of
the regulator but do we want to push in
this direction
um do we want to create a did standard
for D5 altogether do you want to create
that list for name and shames cameras
hackers I don't know there's a lot of
things that we can do we have IDs we
have proposals of course at euci but we
would like you to contribute and to help
and so please join the conversation we
have a telegram we have a Twitter
account we have a website and we
organize a big event in Lisbon from
November 1 to number four feel free if
you are
in Europe at the time or on or nearby
feel free to come and and walk with us
on this on these Solutions thank you
very much
[Applause]
I think we have time for a few questions
so thank you so much
I have one question so you've mentioned
that nft is now currently exploded from
micro regulation but um if we take a
look and we just you know browse what
European console says we see that
European Council is aiming to do some
assessment within the next 18 months so
uh the revocation is coming uh but it's
you know we don't know in which form yet
therefore my question was
um what in your opinion do you think in
what shape or form the regulation on nft
would be coming and perhaps if you could
just share some insights what would be
the best way in your opinion to shape
that regulation on nfcs thank you thank
you so for concretely on the nfts at the
moment there is a loose definition of
what an nft is in a Marketing Group does
its regulation and then every time there
is going to be a new issuance the
national competent Authority will need
to look into and do any analysis if this
is really again unique enough and if
it's issued in a small collection so it
will not be regulated and it is excluded
from from Mika what is coming next and
we were just talking to one of the MPS
from the European Parliament that is
going to lead this effort into
regulating nfts and we're also writing
some uh positions on this topic but it
is it has started already and there are
a lot of thoughts and activities
especially in the parliament at the
beginning to just start with a general
proposal an opinion on this and then I
think in the next few years we'll see
more activities as everywhere the
European Union Works in Cycles in
mandates the European commission that
usually proposed the regulation will
finalize their own mandate very soon in
a year so we'll we'll wait for the new
commission to have more ideas how to
move forward
do you think that the European Union is
going to be at any time at Dao and I'm
here in Florida
Ah that's a beautiful question
um I I do think that the idea of a Dao
is uniquely aligned with European values
so I for example I think Europe is the
continent of cooperatives
um I don't know if there is continent
with more and I think cooperatives but
also associations are sort of the old
world equivalents of what dials are
shaping up to become sort of inclusive
Cooperative ways to work together
um yeah so is the European Union itself
uh fit to become a dow I don't think yet
they are clinging to their hierarchical
Design Systems design but I think
citizens of Europe are ready for daos
and so I do hope that they are going to
front run uh the regulator on this one
and then potentially you know just I
don't know swallow the EU and it I have
no idea but yeah I would I would support
uh the EU becoming a doll for sure
let's go okay
there's another question over there oh
many questions
uh maybe a microphone to these gentlemen
over there
here sorry okay hi my name is Charlie
um
from a regulatory perspective
um if a cryptocurrency exchange goes
bankrupt
what's the best approach
you mean a centralized or a
decentralized exchange both
okay I don't know for a decentralized
one uh for a centralized one there are
no regulations in Mika that um you know
the um
the money custody by users needs to be
protected from insolvency right so this
is really important
um so that so I think Mika as a
regulation protects consume interest
quite well
vis-a-vis centralized business models
and crypto asset service providers so in
this case Mika really does help right
the problem really is where Mika touches
upon more decentralized applications and
where the rules don't fit the use case
anymore so
um yeah I think solvency of a
centralized Exchange in Europe is
regulated now
with the Mika regulation I'm not an
expert on insolvency law so this is
where I will stop giving advice I don't
know if Simon has anything more to say
on that
uh no but I see that the time is is out
so I think for the next questions feel
free to reach out to us and and we'll be
happy to help you
thank you everybody thank you very much
[Applause]