 Hi everybody. Can you hear me all right? All right, let me put it here and see if we can get that to work. Oh, all right. So actually I don't know what I'm going to talk about tonight. I got to think of that. I was at the London School of Economics and I spoke about the proliferation of cryptocurrencies in the developing world and I gave this lovely thing on third generation blockchains. I haven't talked about regulation a bit. Is that a fun topic? You guys want to talk about regulation? That's kind of vogue, right? You know, there's a lot of stuff going on. All right, let's do that. So we'll talk for 15 minutes and then of course you'll ask me questions and I'll ramble on and on and on until I kill the clock out. I should be a senator or an MP or something like that. Okay, so what's the state of regulation in the cryptocurrency space as of 2018? Ah, well, since I started talking in Coinscrum way back in the day before Coinscrum even existed, some of like the proto-Coinscrums that we did somewhere in Limehouse, you know, ICOs were kind of a new thing. In fact, we didn't even call them ICOs. We're just going to go sell some tokens and at the time only, I'd say 20, 30 million had been raised in the entire space using an ICO as a vehicle, which meant no one really cared about it. It was a curious novelty, but it wasn't an interesting event. Now we live in an age that about $5 billion have been raised in ICOs, which means people are starting to care. We live in an age of one coin and BitConnect, and we live in an age that regulators are now empowered with the mandate of aggrieved retail investors to begin a systematic, long-term effort to start getting control over the situation. And it's quite pervasive. So I like to call this crypto-winter. And I believe very firmly that in the next few months we're going to start seeing this happen, step by step, brick by brick. And it's nothing new. I mean, when you have industries go up and down, when you get irrational exuberance and mom and pop get hurt, there's a very strong incentive for retail investors to come in, excuse me, for the regulatory bodies to come in and protect these retail investors or their version of protection, whatever the heck that means. Okay, so instead of complaining about the excesses of the space and how all my colleagues seem to be riding unicorns and enjoying the experience, I'd rather proactively talk about some of the things that have been done that I think are incredible stories that may not actually be known by the general public. One of the advantages of being one of the old guys is you actually collect some of these stories. So for example, the Ethereum story about regulation in Switzerland, this is a great one. And it's one that isn't often told. So when I walked into Switzerland back in 2014, we had to choose between Switzerland and Singapore for founding Ethereum. And Switzerland won by hair because ironically of all people, Johann Gevers convinced us to come there. Yeah, at the time he wasn't a very controversial figure. And actually he and Herbert Sturgey introduced us to this great law firm, MME Partners. And we walked in and we talked to all these Swiss bureaucrats and they're all basically the same. They're incredibly punctual. They show up on time. I guess they make watches there or something. They show up on time and they ask you all these questions and you ask them, like, have you ever heard of Bitcoin? And they say, well, we've read the papers, which translates to, we think this thing is used to buy drugs, but we're not so sure. So we'll be polite about it. And they knew actually nothing. So the first thing that Luca did, the lawyer we worked with at MME Partners, is he was a very diligent guy. He'd just come in every day, two, three hours, ask all these questions. And he was very, very thorough. Anything in any lawyer anywhere in the world written about cryptocurrency, he said, send it to me. I want to read about it. We said, okay. Then about a month into the process, I got deeply concerned because I realized that the senior partner of the law firm, the M and MME, was showing up every day for several hours working out my case. I had this horror story like, oh my God, what are the billable hours? I'm broke. And then I asked him about it. And he said, oh, don't worry. I'm not going to charge you, which was exceptional to me. I'd never had a lawyer in my entire life do that. But he legitimately wanted to learn. He legitimately actually wanted to understand what is this all about? What's real? What's not real? What should these laws look like? And how should they look? Okay. So based on that work, he went on and worked with other people to create a self-regulatory organization. He went on with other people to help found crypto valley. And all these foundations came to Switzerland. And now we actually have a very good piece of empirical evidence of the good, the bad, and the ugly of what happens when you have a market that's allowed in a very low regulation environment to flourish and grow. So yes, we have the Thaisosis, which are incredibly questionable, but there's some that actually aren't so bad. And then what happened is that Switzerland said, you know, let's ask these guys, the good people, what their opinion should be on ICOs. And they submitted a bunch of paperwork on what should be a security token and what should be a utility token and so forth. And guess what? FINMA listened, and they actually published some guidelines. So if you go to CoinDesk, they actually wrote an article about it, I think, last week. And it's the first country around to actually start talking about what is a utility token. So it's a really amazing thing how you can walk into a very conservative country that knows absolutely nothing about your industry and has absolutely no reason to care about you. I don't even speak German. I don't even like Schnitzel. And yet somehow, some way, we were able in just a four-year period to take this very conservative country that has a way of doing business that hasn't changed too much in 500 years, barring technological changes, and then convince them to become a world leader in a very controversial industry. So that's a pretty magical win for us as an industry, and it's a pretty magical roadmap for how people ought to engage with regulators. You walk in and you talk about what are the benefits to Switzerland. I remember we were negotiating tax-ruling in Switzerland in the canton of Zug. They said, what isn't it for the country? What isn't it for Switzerland? Every meeting, that was the specter, the elephant. It wasn't how do I comply with some arbitrary regulation. It was more how many Swiss people are you going to be hiring? What Swiss universities are you going to be working with? Are you going to rent some substance in our jurisdiction? Where are the people going to benefit from this technology? I have never talked to a government my entire life that I've seen to be that people-friendly. That was pretty impressive. The other thing was impressive, we negotiated a lot of this stuff in a bar. We went there at 10 o'clock at night, 11 o'clock at night, and these guys are big drinkers, man. And then we'd have to go in for a morning meeting or something like that, and we would show up and we would be like... And they would show up in a tie, really pressed, looking proper. I'd say, damn, how do they do this? I didn't drink some of this water. This is pretty special stuff. But boy, we had some fun. So that, I think, is one of the great wins in the space. And I think that's the way to engage with governments. But guess what? There's two other things that we have to do as we embrace this digital world. Second, we have to, as corporate actors, understand that our industry gives us new capabilities. When we look at things like smart contracts, these aren't novelties. These are actually things that can disintermediate central firms and automate enforcement. So when you say, you have a right to a refund. So that means I am taking this money, for example, an ICO, and I'm putting it into some sort of pool. You have a right to a refund. Well, if I'm an organization, that's my word. And then you say, well, if Charles is dishonest, what recourse do I have? I say, what about the courts? Okay, so you have to look into the jurisdiction and say, can I sue them there? Worst case scenario, maybe the criminal action. But that's a very complex series of questions. And what if they're in a strange jurisdiction that you've never heard of or never been to and you don't know much about? Or what if you don't know me? So what does it mean? Well, we're committing the same sins of the old system when we do ICOs. You have to live in one of the stable countries. You have to be a known commodity who's already identified with an existing reputation. And there has to be a strong rule of law for you to even have a chance of getting your money back. Well, guess what? When you put a smart contract in, you can program all those terms and conditions in. And if they're violated, there's a strong possibility if the engineering's good, the specification's good, that you can get your refund if that's something that happens. The same for a litany of other things, like use of funds. Why do we give children? They're basically kids, myself included, not too old. Why do we give children a billion dollars to go do something that costs 10 million dollars to do something? This is a sin. Not just for the people raising it, but for the people giving it. Shame on you. There's a reason why venture capital exists. There's a reason why we have a seed round and an A round and a B round and a C round and a D round. Every single one of those is a milestone and an evolution and a story of a company. As you go from an idea to a team to a minimum viable product to customers actually using it to getting your ass kicked to having one of your core founders leave and some horrible dramatic story with rain coming down on you. The inevitable divorce where you have to negotiate equity with the ex-partner. There's a lot of stuff that comes up and there's a lot of people you pick up along the way. You pick up a CFO, a board of directors. You pick up commercial partnerships and relationships. By the time you get the right to ask somebody for 100 million dollars, 200 million dollars, a billion dollars, you're a big company. You're a real company. And we've given children a billion dollars. It's an insane prospect and it's something that the field has done. So say what you will about it. We need to be a bit more clever. So I believe very firmly that first we need to get clever about our own tech and what our tech can do for the custodianship of capital and the use of capital. I also believe very firmly that we need to collapse. We need people to suffer and have some pain and to lose some money because you don't deserve to get a 10x when you put some money into something and a month passes you've done no work. You don't deserve that. You don't deserve that again and again and again and again. You just don't. If you make 1000x on something, you are lucky. You're not smart. You bet right. Congratulations. You could have won the lottery as well. Never believe you're smart because you've made a huge fortune. It doesn't justify you. If you can do it 10 times in a row over a 20 year period, okay, great. Congratulations. There's a very small group of people on the Forbes list who have done that. You got lucky and no one in our space seems to know the difference between being smart and being lucky, especially as investors. So we need to collapse. We need some pain. We need rational expectations to seep their way back in and on the back of it is a tremendous opportunity to have a very foundational discussion about how can we restructure things in a way so that prudence and rationality can return. And guess what? If you do it in the right way, everyone in the world will have equal access to capital. I travel everywhere. I go to the Caribbean. I go to Africa. I'm going there soon. Ethiopia. I go to South America. To Asia. In fact, I'm going to Japan tomorrow. And from Japan, I go to Vietnam. And from Vietnam, I go to South Korea. I've got a long itinerary, guys. And everywhere I go, every person I meet has access to same tools, technology, and markets. I do. There's never been a period in human history where we've had this ever. It's a gift. So in closing, I think that we have some challenges ahead. And I think we have great opportunities ahead. And what really excites me is to see how this space has evolved and how people have come together. I love coinsgrung and I love what Gordon has put together. I really do because when we first started this, it was really, really small. There's like few people here and there. It was mostly an excuse to drink. Come on. The first question was, where is the alcohol and how much of it will be? Is it an open bar or a cash bar? And then the speaker came up, right? And it's grown to actually a more professional event. It's grown to larger groups. When I was at LSC just two days ago, I think we had a full house. And it was really exciting to see how many people are there from all wakes of life, from all countries. Some people came from Singapore and they're all excited and they're very passionate and they want to build real things. So to me, that's what makes cryptocurrencies really special. And to me, that's what makes this movement really special. And I think we definitely can overcome the challenges that are ahead. And I do think that we need to accept that with great power does come great responsibility, as Spider-Man's uncle reminded us. So thank you so much for coming.