 Alright, okay to start off with thanks everyone for being here today. I appreciate that Crypto regulatory and legal is not the sexiest topic being discussed at DevCon and you have a lot of choices So thank you for joining us I'm Connor Spellcy as my fabulous host mentioned and I do a lot of stuff in crypto advocacy. I co-founded two industry associations the space which are the blockchain Association Canadian Web 3 Council I work with foundations on advocacy and then I also work with the get coin grants round and help lead their advocacy round Why I think it's so important and I'm so excited that so many of you are here today is that crypto advocacy well Doesn't get too much attention it gets a little bit of attention on crypto Twitter is going to be one of the most critical considerations for this community going forward and for it to be successful and then for this industry really to continue to look Like it does today. We're going to have to do a lot together very quickly I'll start with the fact that I'm a formerly a lawyer, but none of this is of course legal advice So I won't bury the leader the lead here over the next two years Regulation will have a greater impact on crypto's future then technological innovation Particularly in the US and the EU and I know that's a fairly big statement but unfortunately, I think that it's true and While I think technological innovation will play a huge role in getting us past some of the pitfalls of regulation It's going to be something that really very much materially impacts your use of crypto day-to-day in the next two years So for our agenda today, actually, can I get my notes up here? I don't I don't see them on the right here What we're going to discuss today is essentially the fact that while that is a big statement It's fairly nuanced, right? It's Not as doom and gloom as it initially appears There's a lot that we can do to steer advocacy in the right direction But we're going to have very limited time in order to make that happen And we really need to work as a collective to go forward with it Changes coming is something we're going to discuss, right? There's impending that legislation coming in the United States and there's already much happening in Europe Which we're going to discuss in a bit more detail because it's important to get a sense of Exactly why advocacy matters why we're doing what we're doing and why we need to invest so much of it in the very short term Ultimately end up talking about strategies that we need to use in order to Really take advocacy in this space to the next level right now There are a lot of fabulous organizations that are doing very good work But there's much more to be done and they really need your support now There's a lot of a lot of fun potentially in the first few slides here and I don't want to leave you with that at all There's so much that we can all do as a community I'm going to save the last five minutes of the presentations to go over questions and hopefully allay any fears But if we run out of time feel free to find me after or find me on Twitter So as a former lawyer advising crypto companies I can tell you that one of the major concerns for crypto companies is legal and legal clarity And I'm sure all of you had a dad to deal with this in some capacity and whatever role you have in this space That fact was very much reinforced for me when I started running the Dow research collective Which is an organization where we talked to Dow stakeholders about the key issues facing their organizations And we helped to try to solve them but over and over again legal and legal related to employment to Securities to ICOs any number of things was really holding back a lot of the organizations that we were working with Those they're kind of like two big related issues here, right? There's one which is that that lack of legal tear clarity really slows what we can do today It slows the development of the industry because founders and operators need to second-guess themselves over and over again with every choice They make because legal is this ever-present Fear and risk the second issue with this is that the clarity We are starting to get in the space is not really the kind of clarity that we want new policy is very much over indexing to limit risk and To maintain the status quo right kind of square square pegs and around holes instead of thinking about what crypto can do What the industry's potential is? Luckily blockchain is very much not the first disruptive industry to go through these growing pains, right? We've seen it happen many times before and we could check take a look at the playbook of how other emerging technologies did this So a few examples of what those would include would be AM radio FM radio Film television and even the Internet, of course it all went through this growing pains these regulatory hurdles I'll now jump into a bit more detail on the strategy that the crypto community should employ in order to generate those more favorable outcomes that I'm talking about based on what we've learned from those past industries But in case you want a primer, I highly recommend this book by Tim Wu Josh Stark also recommended it. It's called the master switch It'll give you a sense of how those industries started and how they got through the regulatory hurdles Which they had to battle all along the way and Josh also wrote a post about how this book in this like sort of philosophy Applies in crypto, which I highly recommend you read he co-authored that post so zooming out to be here from where we are in crypto Today it helps to understand how the cycle of innovation and regulation works in the United States And also just in the West generally now This is a global problem crypto regulation is a global thing and we can't just Escape it by moving from one jurisdiction to the next exactly my experience is is kind of in with Western countries So I'm going to focus primarily on those also those jurisdictions particularly the EU and the US when they pass something It has a way of trickling down into the laws of other countries So they're particularly relevant to our discussion today and the US as we know has a very major enforcement arm so Government blessing has been critical to every 20th century information empire while governments have No master keys that they can use to shut crypto down What they can do is make it so high risk for their citizens and their institutions to interact with crypto that they simply leave And we've seen this already a little bit in the ways that different institutions are already flip-flopping with crypto Right, they're making different statements every day about whether or not they support crypto They're attracted by the money in the bottom line and the potential but they're scared off by the risks of hacks But also the reputational risk of being associated with crypto We shouldn't let the limited government intervention to date Lull us into a false sense of security and I imagine some of you're thinking like has there been limited government intervention because we feel like There's been a lot right, but really good actors and crypto have had relatively limited antagonism from Western governments That has started to change in the last six months and as more regulation has passed We are going to have to change the way that we work and think about the space It's also critical here to kind of think about the ways in which your organization You know is going to represent itself for the greater community here now regulation is not necessarily problematic Governments can play a very important role in supporting and overseeing industries for instance, right? the crypto industry could have benefited a little bit if regulators had focused more on the scammers in this industry and some of the Irresponsible founders who've really created reputational issues for our industry the failures of Celsius three arrows capital and Tara Have heard a lot of people But those organizations were led by a very tiny fraction of those who are working in this industry of course But unfortunately their sins have dug us a massive reputational hole both within media Also with policymakers and regulators and now it's up to us to get out of that hole So if you're you know an organization, too, that's thinking about the ways in which you're operating Make you know make sure this this is in mind for you, right? If you if you your bridge gets attacked and you lose four hundred million dollars It's gonna be a huge issue for your users and for your product and it's gonna be a huge issue for you It's also gonna be a massive issue for the future of this industry because hearing those stories over and over again Doesn't do us any favors and I think I just saw a tweet from chain analysis that said that October had the highest Volumes of hack of any month, right? That's pretty sad at this point There is hope of course that we can push towards good regulation But only if we start working together and become aware of this now knowing how to navigate the political environments of Washington and of Brussels is not necessarily the average crypto stakeholders wheelhouse and that's totally fine We have a number of fantastic advocacy groups that do a ton in this space already And you can really easily plug into those organizations so that you don't really have to do much work But they do absolutely need your support I'm gonna plug a bunch of them at the end of this presentation But for now, let's jump into some of the very real changes that are coming up and will impact all of us as a result Of regulation and to help us understand why we so desperately need to invest in advocacy The first thing I'm gonna talk about is the DC CPAs in the next three months A bill could be passed in the United States that may ban much of defy in the US Now here I'm talking about the digital quantities consumer protection act also known as the DC CPA This isn't a bill that's just an idea or at an early stage of drafting or is something that some obscure Congress member has thought up and is introduced and is going nowhere This is a robust piece of legislation that has been supported by a number of very influential members of Congress And also other influential backers who are very interested in seeing it pass and there is a very good chance that it could pass This is unlike anything we've seen in the US so far This has the greatest chance of becoming law and it could happen in the next three months Policy makers and regulators have taken years to learn about crypto. There's a huge learning curve But now that they're kind of over that learning curve They're interested in regulating the space and it's happening right now The core focus of the DC CPA is to provide the commodities futures trading commission the CFTC Sorry for all of the acronyms the exclusive jurisdiction over certain crypto spot markets The bill also gives the CFTC new authority to regulate a type of asset called digital commodities And also to regulate a new energy category called digital commodity platforms Which would include brokers custodians dealers and exchanges This is a critical bill to be aware of once again because it stands a very real chance of passing by the end of the year in part expedited by the election that could happen in the United States and Also by it's very much influential Bipartisan backing in the US if it does pass it will have enormous implications There are many positive things about the bill and the drafters should be applauded for their diligence in in working with industry and Working with different industry associations to to improve the bill But there are some issues and we need to talk about them The first one is of course the potential ban on DeFi So the digital commodities platforms definition in the bill is designed for centralized custodial markets however, the definition of of Of the digital commodity platform could also be interpreted to include DeFi and given that many DeFi protocols cannot adhere to the same standards as You know centralized Exchanges it could be impossible for them to comply and it could really crush much of DeFi in the United States Banning DeFi likely isn't the goal of the drafters of this legislation But it could be an unintended consequence of applying of course the same rules to centralized and decentralized entities The second issue with the bill is that its digital commodity definition is very vague And this is maybe asking a lot of the drafters because it's a pretty difficult issue to tackle But the biggest unresolved question for so many folks in crypto is what is my digital asset? What is my crypto? Is it a security? Is it a commodity? Is it something else entirely? If we had legislation that provided a bright line test It would really help you understand how you could operate your business Of course, we want one that was a little bit more favorable to our community But at the very least that clarity would be helpful in knowing where you stand And it would also encourage maybe the Securities Exchange Commission to Change its approach to its enforcement and crypto to set a more specific jurisdiction for that regulator The bill also gives two examples of digital commodities Bitcoin and Ether which is in some ways kind of great I think that a lot of us would say yeah We agree that both of those are not securities but it does narrow the scope of what we might expect would be included as a digital commodity and We might want the CFTC to have more jurisdiction than it's giving itself in this bill and Another associated problem, of course, is that it doesn't distinguish Jurisdiction within the SEC and the FTC FTC as much as we'd like There could be a little bit of a turf war between these two regulators and crypto could kind of be a victim of that battle So as we move away from this, I just want you to keep in mind What this could mean for your company if you are in the United States and starting a DeFi company Or if you will have American customers for your DeFi company or you're someone in the United States who uses DeFi This could impact you right and if it's passed in three months and that won't necessarily immediately become effective it could take a little bit more time, but This could have major implications to your company and you need to think it through now For something even more tangible in April of 2024 centralized stablecoin use will be capped an Algorithmic and collateralized stablecoins may not be legal in the EU while we just discussed a US bill that might pass Now we're talking about a bill that was already agreed upon and will change the way the industry works We know this with certainty the markets and crypto assets bill Mica for short is a comprehensive framework for crypto asset issuance And server survivors that was just agreed to by the European Council and published last week These regulations will massively alter the stablecoin industry Mica is too comprehensive a framework for us to get into much detail today But we'll dive into one of the areas that is most like going to be most effective Which is stablecoins? Specifically Mica is putting a cap on the daily volume of transactions for non EU denominated stablecoins at 200 million euros per day in the EU While the details are still a little bit hazy what it likely means is that in April of 2024 USD denominated stablecoins like USDT or USDC will only be able to do 200 million euros worth of transactions per day in the EU While we have to wait for further rulemaking for absolute clarity Given that both USDT and USDC do billions of dollars a day in transactions They would probably exceed that cap on particular days or maybe every day. I'm not totally sure It appears very much that these issuers that circle and tether might have to find ways to limit their stablecoin use within EU countries to stay compliant with Mica Which might require them to look to new solutions of geo blocking or performing some very cumbersome KYC or Create an entirely new tool it also makes us stablecoins much less competitive in Europe Do not then euro denominated stablecoins, right? For instance if you're in the EU and you want to use a payment in USDC What happens if USDC has reached its cap for the day? Do you have to wait for the next day? It's not totally clear yet But these kinds of issues flag for us that maybe this bill and this level of specificity is coming a little early Considering the market is still very much nascent at the very least what we know is according to the language in the bill If you are an issuer and your issuer rather and your stablecoin has exceeded the cap per day Then you need to go talk to the regulator and stop issuing new stablecoins and you can start issuing them again potentially once the regulators agreed that your new strategy for Reducing your volume per day is satisfactory to them stablecoin issuers will also have to have offices in the EU Report consistently to EU regulators and meet reserve requirements that will likely require them to hold the vast majority of their funds and fire Now we don't know this for sure But that is what it's looking like those requirements will likely make it all but impossible to have a compliant algorithmic or Collateralized stablecoin in the EU in the way that we know them today While the future is not as clear in the United States There have been several stablecoin bills that have actually gotten a lot of traction and it they're looking not totally dissimilar from this Their impact on algorithmic and collateralized stablecoins in the industry could be very similar in the United States as we're seeing right now in the EU And it seems like there's a very very good chance of stablecoin bill will pass the United States in the next year So take a second to stop and think about how you use stablecoin today And how this is going to impact how you can use them as the future like if you are paying contractors in Europe If you are you know paying service riders in Europe You may completely have to change what you're doing if you're a collateralized or stablecoin or algorithmic stablecoin issuer You might have to change your business model. This is something that you should really jump into right now So I've been honest with you about all of the issues with crypto and all of the hurdles We're facing when advocacy side But it is not all doom and gloom because there are a ton of things that we can do to get over this right and steer Regulation rather in the right direction. How can we do it? Well, luckily we have a list right here number one fund crypto public goods Funding and promoting initiatives that highlight the crypto industry's potential for good helps the narrative for crypto people When we're talking to regulators and policymakers that increases the likelihood They're going to progressively adopt a more favorable approach to crypto now They could put the merge and the impact that had on crypto's perception in the media and particularly with progressive media We saw a kind of great highlights about how the crypto ecosystem was reducing its energy use by 99.95 percent Which is an incredible feat something that no other no other industry has done We need more stories like that and we also need a bunch of killer apps that create a lot of jobs So please focus on developing both of those things number two fund think tanks and or activism groups think tanks fund and promote research concerning topics related to one or more social policy political strategy or economic theory while advocacy groups Participate in activism focused on similar subject matter that could include things like lobbying or organizing grassroots campaigns Some of the great ones in crypto that you probably heard of already are coin center fight for the future and the electronic frontier foundation The internet archive is also kind of working in our space as well They're another fabulous group and Brewster spoke yesterday their founder number three fund and participate in industry associations industry associations are founded and funded by organizations in a particular field Usually to collectively represent their interests some of the great ones in crypto include the blockchain association in the United States The Canadian web three council in Canada and the European crypto initiative in the EU These are organizations that are specifically focused on going to policy maker policy makers and regulators and really fighting your fight for you and you can choose to engage in them However, you want you can become very active and helps to the direction of your organization Or you can just pay them a little bit of money and thank them for being the ones to go to talk to staffers every day It's up to you But I highly recommend that if you have an organization in any of those jurisdictions You join because they absolutely need your support number four directly encourage community participation and advocacy So policy makers can be heavily influenced by vocal individuals and organizations Particularly those who are based within their constituencies a relatively recent example of that was the infrastructure bill battle that we fought Last year So this was a campaign run by groups including bite for the future the blockchain association and the coin center and coin center rather to encourage More us citizens to call their representatives to encourage them to support pro crypto positions While the campaign was ultimately unsuccessful It did lead to more than 40,000 calls to senators and demonstrated a polity policymakers and regulators that crypto was really a force And that a number of their constituents were interested in this technology It very much announced that there was a reason to pay attention to crypto number five is lobby directly, right? Lobbying is an attempt by individuals or private interest groups to influence decisions of regulators or policymakers The practice has a lot of very negative connotations of course But it's actually a really fundamental part of rulemaking in many jurisdictions Policy makers and regulators have an abundance of different things being thrown at them They are thinking about space programs and hospitals and they are thinking about pensions and crypto is something on their list too Crypto is particularly annoying to learn about at first potentially if you're not interested in it, right? So we need to get in front of them We need to educate them about it so that they don't misunderstand what we're doing and so that they can understand the public goods upside of crypto and Build that in when they're making a decision number six Support organizations that fund crypto legal defense a number of organizations have Started to participate in funding legal defense their goals are generally to provide support for those in the industry who have been targeted Another goal which is really critical to all of you is to create legal precedents that make the industry stronger and Provide us with a more favorable position from which to build our organizations a great example of this is the DeFi education fund Which recently filed an amicus brief in a defense of the contributors to Okidao Okidao, which was sued by the CFTC, but would likely not be there to defend itself Just yesterday the judge in the case accepted their amicus brief So they can essentially participate in parts of that hearing in order to Make a case for Okidao and others out there So we're not saddled with a bad precedent because of the bad facts in that case Lexpunk also filed a similar brief and I believe they were accepted yesterday as well in case the previous list of options was very dense I apologize I'm gonna make this really easy Please take out your phone and take a picture of all of these amazing organizations because these are the organizations that are fighting for crypto To stay the way that it is or to improve Regulation in the space is really important There are a lot of problems that we have and we do need some oversight but we want to make sure that policy makers and regulators are very well informed and Understand what crypto can do for the world before they start passing legislation that could completely alter the course of this industry Another quick start to advocacy so you could also send your contributions these organizations in part or in whole through Gitcoins advocacy round. So this is a some information on the first Gitcoin advocacy round that we ran We raised more than 1.3 million dollars from 22,000 different contributors helping all the organizations that I just listed If you put your money through the Gitcoin matching round, of course There's a chance that you could get a dollar more for that organization or two dollars or five dollars or eight dollars So another option for a place to spend spend your money and participate in advocacy and that is it So if there's one thing though that I would love for you all to take away from today's talk It is that we are definitely facing an uphill battle for crypto to continue to exist in the way that it does today or in improved form There is a ton of hope though, but only if we act collectively we invest a lot of resources and we do it now So if you want to connect with any of those organizations I listed just reach out to me You see me after or just DM me on Twitter. I think we'll now have a few minutes for questions But thank you very much for your time. I really appreciate it Yeah, thank you. Thank you for your talk. That's very nice Some of the rules are just ridiculous that they're just employing. I think it's an isn't all better just to focus on building the technologies and just making them more resistant for these kind of attacks that wouldn't be better to just focus on Building forward and if they come with these ridiculous rules of like 200 million volume That's just like ridiculous like I don't know you can make a think tank for that, but it is going But they're ridiculous way of thinking Right. I mean, I hate to say it but that is like not a compelling argument for the regulators, right? Unfortunately, yeah, but I think it's a thing that any just they cannot just comment these ridiculous rules It is right. I mean the thing is that they can and if they don't get any feedback from advocacy groups like a UCI in Europe to tell them this is ridiculous. This can't be done This is going to have a huge impact. There are negative externalities, which you're not thinking about then we as a as an industry We'll be in a position where we just keep getting hit by these pieces, right? And so I agree building is really critical in the space and we need to keep building technologies that are compelling and Convince regulators and policymakers that there's a reason that they should care about crypto and wanted to exist in their jurisdiction And it could be as simple as you know If you if this is what you're doing to crypto in your jurisdiction Well, someone else is going to take it over South America is going to take it over China's going to take it over Another another jurisdiction with which you're competing is taking over So this is the kind of narratives you use right to try to convince them You need to participate in this now and pay attention to it But we need someone in the room telling them that they won't just know it on their own But I agree with you I mean it is frustrating But the part of the problem is that not enough people see that this is coming because it hasn't happened before But it is happening now and it will change the way that we engage with With crypto thank you so much. I really like everything that you said my question is Related about the politicians and regulators that we have right now in all the world and specifically here in Latin America The things that you were saying is so interesting, but what could we do when we have Bad politicians people Who doesn't have idea about what is a wallet? What is a cryptocurrency? Right or they are for their own interest Then how we can fight I keep working to have a better space into the Yeah, the politics. No, that's a great question. I mean I Mean we have a lot of politicians are self-interested But part of it is thinking about like the first step in this whole process, which is very much education So you mentioned politicians who don't know about crypto wallets about crypto generally And that was certainly the case when we started the blockchain Association And I no longer work with the blockchain association though I'm close to the organization but Kristen Smith there did an amazing job of spending so many cycles Educating regulators and policymakers. I think when we first started the organization We thought oh, we can just immediately begin and push for policy that could be really impactful and provide clarity But we needed to stake many steps back and spend years teaching these policy politicians about the benefits of crypto What is compelling to them specifically right because you think about policymakers on the left or right some are motivated by competition with China Some are motivated by financial equity You ought to think about what? Incentivizes them to want to participate and want to support your position and that's largely what I mean lobbyists help do Advocacy groups industry associations. That's something that they're always keeping in mind when they make these kinds of decisions It's a great question though, and I I unfortunately don't know as much about how to make it happen in South America But I certainly want to learn more Yeah, right here So I just want to thank you for the presentation. It was very informative and especially highlighting some of the groups that are fighting the Good fight my question is as pertains to the U.S. I Guess regulations are there any particular politicians and either a congressman or senators that you feel that they're doing a good job of Be getting informed and putting good Legislations and maybe in the opposite side and maybe some that are not so friendly Well, I wouldn't want to name names at the moment because I probably forget somebody But I can tell you that there are a number of like amazing members from both side of the aisle bipartisan support For crypto we do have a number of champions, but we really need many more I'd highly recommend following the blockchain association because they do a great job of amplifying the voices of those policymakers in the states Who are supportive of our positions so that would but I'm happy to chat more after. Thank you. Thanks ever so much everyone