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Regulation and Past: Key Takeaways from Consensus 2023


Staff 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 12 months’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 staff and different information sources. 

There isn’t any doubt that regulation was the foremost theme on the convention, and specifically regulatory uncertainty within the US.

Among the many key business 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 would 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 firms are flying blind within the present regulatory atmosphere.

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

An excellent illustration of the place this uncertainty is coming from was seen within the “The Turf Conflict: 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 giant, 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 had been mirrored in lots of discussions the EEA staff 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 staff present in lots of their discussions, there was a basic sense of optimism amongst many current.  

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

Our staff additionally discovered a powerful sense amongst many who, popping out of some of the troublesome intervals for crypto final 12 months, 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 firms, Patrick McHenry, Chairman of the US Home Monetary Providers 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 Might 2023.  Such hearings could possibly be an vital step in direction of offering extra regulatory readability for firms working on this area.

Whereas each McHenry and Lummis expressed optimism about future developments in crypto regulation, in keeping with our staff on the bottom, the final temper was extra ‘wait and see’. There’s plenty of urge for food for regulation within the US, and recognition that doing it properly is vital, however the expectation is that it’ll take plenty of time. It’ll even be vital for the business to get collectively and determine what they’re eager about, or danger shedding a possibility to get a seat on the drafting desk.

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

There have been a bunch of different vital matters on the agenda as properly. One which caught the eye of our staff was crypto accounting. 

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

One panel dialogue on the convention targeted particularly on the distinctive challenges dealing with companies in the case of 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.

A variety of modern options had been offered on the convention to assist cope with these challenges. These embrace specialised accounting software program that integrates with in style cryptocurrency exchanges, in addition to instruments that permit for automated monitoring of positive aspects and losses over time.

The EEA hosted an unique Member-Solely breakfast, sponsored by EY. Regardless of the early hour, quite a lot of 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 bunch and participant. Co-chairs Michael Gonzales of EY and Dyma Budorin of Hacken talked by way of the place the DRAMA Working Group is in growing finest practices for accounting within the DeFi business. Different firms represented embrace OpenZeppelin, Microsoft, ConsenSys Mesh, Wanchain, Noves, Certik, C4, Hyperledger, Bitwave, Entersoft, Cartesi, and Cryptio

The breakfast offered a possibility for EEA members to community and share insights on numerous matters associated to blockchain know-how. Total, this occasion served as a precious platform for collaboration and data sharing amongst business leaders in attendance.

You’ll find extra about Consensus 2023 on Coindesk.

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