Having premised so much of financial markets regulation on the presumption of intermediation, it may be useful to consider the need for new rules and formal amendments aimed at achieving the longstanding regulatory goals of promoting investor protection, facilitating capital formation by establishing fair and orderly markets, and mitigating risks that disrupt and destabilize markets.
The SEC remained mostly silent during the ICO boom but then flooded alt-coin founders with a tsunami of subpoenas beginning in 2018. To be sure, some ICOs were scams and deserved prosecution, but others were and are legitimate companies building out viable networks and providing value to purchasers and consumers.
LBRY, Inc. is one such company. It promotes an “open, free, and fair network for digital content” and boasts 10 million users. Someday it could rival YouTube, Amazon, and other video content providers. But first it risks bankruptcy in a legal fight with the government for violations that lack victims.
The large caveat here is geography. In many countries, innovators like LBRY are free to thrive, even if they do need to take special care not to accept U.S. users.
So try as they might, this won’t stop the revolution. It will simply chase it offshore. Web 3.0, the internet of value, is at this point inevitable. Even LBRY will move forward, regardless of the outcome of this case.
Perhaps someday soon, U.S. citizens will need to use a virtual private network (VPN) in order access large swathes of the internet, just like the Chinese do. Oh, wait…It’s already happening.
“I think we were past that point [of banning Bitcoin in the US] very early on because you’d have to shut down the internet,” Peirce said. “I don’t see how you could ban it. You could certainly make the effort. It would be very hard to stop people from doing it [trading Bitcoin],” she said. “So I think it would be a foolish thing for the government to try to do that.”
Though, as Peirce said, in reality this would be very difficult: technology will likely outpace the government’s attempts to limit Bitcoin use, since people will always be able to download Bitcoin wallet software, run a node, and make transactions as long as they have access to the internet. What may be more likely, in the short to medium term, are clearer Bitcoin regulations.
Among the many offshoots produced as a bi-product of the ongoing cryptocurrency experiment, nonfungible tokens have turned out to be one of the most explosive. In a few short months, over half a billion dollars worth of NFTs changed hands, as celebrities (from lists A to Z) clamored to profit from crypto’s latest craze.
But amid the rush to jump on the bandwagon, few have stopped to consider the veracity of the terminology applied to NFTs. After all, why would you stop to ponder semantics when there are millions of dollars to be made at the click of a button?
But in lieu of said millions, we decided to ask the question: Are nonfungible tokens actually a little bit fungible after all?
The number of DeFi apps continues to explode, partly because their programs — including Uniswap — are based on open-source code. Software developers can easily mash up code from different programs, building on it to create innovative new applications. It is this open-source movement — the unsung hero of the internet and software industry — that serves as an insurance policy for decentralisation. Even if Nakamoto’s identity is revealed, spelling doom for Bitcoin, Coinbase need not fret. Another person, or group of people, can easily take his place.
DeFi challenges this centralized financial system by disempowering middlemen and gatekeepers, and empowering everyday people via peer-to-peer exchanges.
“Decentralized finance is an unbundling of traditional finance,” says Rafael Cosman, CEO and co-founder of TrustToken. “DeFi takes the key elements of the work done by banks, exchanges and insurers today—like lending, borrowing and trading—and puts it in the hands of regular people.”
NFTs are in their infancy and are poised to have a significant impact on the worlds of art, photography, music and other creative industries. Working with a securities lawyer who is familiar with the interplay between NFTs and securities laws will help increase the odds of your project’s success and make it less likely that you will be deemed to be illegally selling securities.