EBC22 | Navigating the Legal Landscape in Digital Assets

[Music] so yeah next panel next session is how to navigate the legal landscape in digital assets and also just a little note we have josh she's been with us since day one seventh edition seventh time with us so that's amazing she just flew in from new york philadelphia fantastic to see you all and alireza the word is yours so good morning everyone it's alairisa here so we're going to have the honor to kick off the first panel today so let me just sit down to see you all so good um the first panel before we talk about the first panel just a little bit brief out and just think about what's happening right now so we we see it all in the media celsius coinbase um algorithmic stable coins so what's going on that's that's a question right now and um i can just tell you from from from a lawyer perspective because i'm a lawyer i'm a german lawyer all of that is happening because of actually two things one is the lack of understanding the lack of understanding what what is really happening i mean cell deals i was talking about cell deals like one and a half years ago with german banks and those who did this crypto lending and they were asking me hey alireza what is this crypto landing is it is it good is it bad can we do money with that i was saying i don't really know myself so i have to look into the contracts what i what is really happening in crypto landing because crypto landing it sounds like you land some on your crypt and you get money for that but actually if you look really in the documentation of sales deals you give your crypto away to a third party who you don't know you don't have any insurance you don't have anything and this person is taking your crypto doing some investments with that highly speculative investments and then you hope to get some interest back the interest is not really matching the risk in the end of the day and then if the default is happening you're right now in this situation no one can really help you because if you look at the typical capital market in the fiat capital market at least in the european economic area we have some regulation where it says that up to 100 000 euro your deposit should be protected something like this does not exist with crypto so what the first thing is it is a lack of understanding and the lack of understanding brings us to over regulation or no regulation at all and we are exactly in this position where people come and say okay let's ban proof of work uh blockchain which is nonsense in my opinion it's not really working and on the other hand uh like players like celcios or players who are in jurisdictions where we have no regulation at all can do whatever they want to do and no one really understands what's going on so and i believe to have a proper functioning of the crypto industry we need to have a better understanding of the of the instruments of the yeah of the business we need a better understanding of the regulation and we need a proper infrastructure and i think today's panel will show you how the infrastructure for the crypto assets industry could look like around the globe and i'm very happy that we can discuss today uh about um standardization so easin and other standardization numbers of crypto assets we're going to talk about patterns we're going to look at the uh yeah animal in the closet which is like the travel rule or the know your transaction compliance rules which are uh yeah recommended by the fatf we are going to look at what is really happening in the u.s from a legal perspective from a regulator perspective and we're also going to look what is happening in the crypto hotspot lichtenstein so this set i would like to give the word to the speakers and i would like to introduce each of you by connecting the dots so i was now talking about the topics and please you start by giving a small intro to yourself and explaining to the audience how this topics i just explained fits to you and i would say ladies first josh please start hi thanks it's a pleasure to be here thank you guys for having me i'm josh clayman um i'm us head of fintech and head of blockchain and digital assets at the global law firm link linklaters and i'm also on the board of the wall street blockchain alliance and of wharton's cipher accelerator i'm also on the board of diversity and blockchain so i've been in this space for a while and i this is my lifeblood i guess my passion so um how this relates to what i work on well um i've been working on these matters directly actually um including with um and i can't obviously say anything privileged but certainly with asset managers who have gotten margin calls as a result of some of the challenges and the de-pegging of for example steak to eat and and various things like that so i think should i should i build on what you said is that the best way to go or are we um i think we we just go to the next one and then we will have a more more dialogue rather than a monologue so to see how we can put this small pieces together and yeah talking about us as i said those of you who are familiar with the crypto industry uh know why i said lichtenstein is the place to be so thomas explain us a little bit okay my name is thomas negley i'm a lawyer from lichtenstein as well um i started to code software for about 10 years before i became a lawyer um i discovered bitcoin in 2011. i started my phd in 2013 about the legal nature of bitcoin so in 2016 i was invited by the liechtenstein government to to join the work group to think about legislation which is now enforced since first of january 2020 it's called the liechtenstein blockchain act the real title is tvtg so if anybody is interesting to hear more about that i'm happy to talk to you the next two days my my lifeblood is blockchain it always was since i started my law firm we are we are flooded with requests liechtenstein is in the heart of europe uh we have a very comprehensive legislation and to to connect the dots to your intro alireza these are exactly the things which we try to address in in legislation right and i think it is crucial to first of all understand what blockchain is capable of and what it is not capable of and the question is if you regulate intermediaries or if you let the technology work itself because it is possible to solve these these issues right um but like these things which are happening currently right these don't come unexpected i mean we still have the same demand we still want to do the same things i want to get a cred i want to get a loan to finance something and the other guy is getting new track credit wants to have some interest right but the problem is how you structure that and um that there are ways of doing that in a new way but if you don't do it in any way and this is done in the same way as it was always right we would have in the traditional world very like very intensive regulation for good reason so i'm happy to to touch base on that um if if that was features later we will definitely do that and i can see on your lap your publication your broad review uh that's your phd publication right about crypto yes it's about the legal nature of token i also wrote another book about the secondary market for security token is actually quite interesting because what we see now in europe with the mika the market crypto assets regulation that would be my second book which i published last year and the first one was published four months before the european commission issued the draft of the dlt market pilot regime which was covering exactly the same topic so so great great so everyone who's interested in reading some legal stuff you can also check out the web page of nigler where his uh yeah the secondary market uh regulation stuff you wrote in english you can read it freely access so talking about patent mark i think you're an expert on that so explain a little bit on yourself and how you are related to patents sure thank you uh my name is mark kaufman i am uh i wear several hats uh i'm a partner at the law firm uh the international law firm of ramon pc uh and i advise several uh blockchain projects many blockchain projects and in fact uh i'm here on on behalf of lot network uh for which i serve as blockchain advisor and i think everybody here is aware of the regulatory risk and other other risks related related to innovating in blockchain technology and my colleagues will tell you all about that and you should be worried about the regulatory risk but the the one risk that i think uh people are not aware of is that there are over 50 000 worldwide patent families related directly to blockchain technology 50 000 patents patent families in fact that read on implementations of blockchain technology and if blockchain technology progresses in any way through the cycle like other innovation which i think it will patent assertions and patent risk are going to be a big problem and uh i hope we get to talk about that a little bit today also we will we will thank you so pele you're sitting next to me i'll explain a little bit about about notable yeah so um i've been in the crypto space since very much the beginning since um well back when crypto was cryptography and not cryptocurrencies and i've always been involved interested in identity fintech applications of cryptography and i think i got really excited by bitcoin early on because the ability that i i saw of it being able to change the world create meaningful applications for regular people and this is something that i don't think we've been particularly good at in the at the industry and now the regulators are kind of forcing the industry to do some of these some of these things so we after having worked a lot with my co-founders on figuring out how to do identity for blockchains we saw the regulators really wanted people to start figuring out who is on the other side of a blockchain transaction not as a big global shared google identity database database but the parties to a transaction need to now know who's involved with that and that's what's known as the travel rule which is the worst name ever for for a particular rule and as a ceo of a travel rule solutions company i wish there was another word for it uh but uh we can get into more details later on it but it's something that's touching every single crypto company out there and every single crypto user will be touched by this over the next couple of years yeah travel rule is uh it's a strange word but sundown is also strange so yeah or or segwit2 i think our industry is really particularly not good in finding good good names right we should have some brand offices or something like that yeah we need some standards and some standardization and this brings us to stefan so stefan please hi good morning uh stefan dryer here i'm managing director at anna which is the association of national numbering agencies uh an organization which is probably more commonly associated with the traditional uh capital markets as opposed to crypto um we have so maybe i should just explain as a global industry association we represent a 120 members globally who represent key market infrastructures uh in capital markets so you have stock exchanges data vendors central banks regulators and they are responsible for the uh promotion implementation and maintenance of international standards such as the international securities identification number and as we see uh the evolution of the markets there's two main topics that you can't really avoid these days one is sustainable finance and the other is crypto and so we see these as main drivers so that's one of the strategic topics that i look after really trying to understand the role of international standards as they are applied in traditional markets and how they can be transferred for the same benefit to the to the crypto so as you see more tokenization of financial assets as you see application of dlt and blockchain and various aspects of the the life cycle of securities and the the emergence of a new investable investment class um so new types of of assets uh in the crypto space so happy to talk about the standardization topic and make sure that it keeps pace with the the technology and the regulatory conversation okay let's let's stay with you stefan so standardization you said uh standardization like easy no wkn for security token is it only for security token or also for other crypto assets i mean if you try to also apply a little bit to the current market i mean i i look at coinbase as one of the first regulated players in germany with the license for crypto custody and crypto trading they have big difficulties in listing their their token because they are only restricted to cryptocurrencies are not allowed to do to list security token but um would the standardization help for listing for so how does it help for for the onboarding of a listing of the assets and for the trading and what is the background of standardization how does it help the market so regarding the scope particularly for eisen it's very much a work in progress so for security tokens is something that can be applied here the standard is we really look at it from a technology agnostic point of view saying the the technology shouldn't give rise to to new standards so if you have a bond a stock a fund any of your traditional fiat assets um that are issued in in a certificate form or paper form book entry um the fact that they're now issued on a dlt means that the same identification can be applied and that's really the thing it's about the unique identification of a particular asset so the iso focus is very much on the asset level we also work with other standards there is a new standard that has come out which is a digital token identifier which was launched in october of 2021 and here we're working on areas of uh interoperability and and creating a complementary standard set that can be a solution for the market so the dti focuses on uh on fundable digital assets whereas the scope of icing is much broader and as i said it's it's very much a work in progress right now we're looking at different models for tokens which are not security tokens so the the stable coins cryptocurrencies etc um trying to come up with a central centralized allocation model um so that's something that we're looking to do in the next couple months but then also to couple that with the the dti which is more of a technical standard identifying the uniqueness of a token on a particular chain okay okay that's that's interesting i think that's very essential to understand when you want to build up your your crypto business that standardization and eases and stuff like that are very yet needed and required for having a compliant environment but at the same time when you start having your blockchain your protocol how can patterns help can you put a patent on the blockchain or on the on the protocol so how how does it work well are you asking can protocols of themselves be patented yeah yes yeah well you may have the answer is yes uh the short answer and i'll explain uh you all may have heard if you're involved in patents at all that you can't patent software per se and you can't patent business methods and and that's essentially true but that's more of a a technical limitation than a pragmatic limitation uh in fact uh patents can be granted to and have been granted to protect the actual process that the various protocols uh go through now the the blockchain uh the bitcoin blockchain protocol itself was published many years ago and uh thus cannot now be patented because it's not new but as far as subject matter it could be patented and again i said there's over 50 000 patent families related to blockchain technology uh so you can patent it we're seeing patents related to protocols generally paths related to various hybrid architectures of decentralized and centralized architectures various security mechanisms for for enterprise blockchains consensus mechanisms virtually every aspect of decentralized technology is being protected by patents okay and if i would be like someone who's like putting up a protocol a blockchain protocol so how does it work how are blockchain protocols at risk for patentization even when they are using an open source protocol so that's a very good question and it's a common misconception that if i'm using open source software or an open source blockchain protocol that i don't have to worry about intellectual property risk and and that's just not true so you have to think about what an open source license really is an open source license is a copyright license from the community that created that open source uh software so it is it is just that solely related to copyright and only from the great the community of creators any third party could potentially uh assert their intellectual property whether it be copyright or patents against users of open source technologies and it's happened very much in the past and what has happened for example with linux software very popular open source software there was tremendous problems with patents and uh oin the open invention that open innovation network was formulated to uh as a pad community to try to open up the the patent rights related to linux and in fact i'm going to give a shout out to my colleague andy block who will speak tomorrow from lot network and he's going to talk about lot network which is in a way an analogous community that helps reduce patent risk in in throughout all technologies but you know specifically in blockchain for our purposes thank you thank you so um i would i would like to to tackle a different thing so talking about the fatf recommendations on travel roll we have them now for some time and house of progress right now is are the jurisdictions right now able to to apply this recommendations by the fatf so what are the obstacles and where what is the status and what where what do you say what are the next milestones going to be achieved yeah most major uh jurisdictions now um are requiring it or requiring companies to implement it over the next year so we're actually seeing pretty wide wide implementation right now we have uh uh nearly 300 companies in our in our network right now and most of these are working on implementing it as as we speak if they aren't already implemented we have quite a few companies implementing it live and have been implementing it for more than a year right now so the big challenge initially was if you are based in a in a small country with a regulator that requires it how do you continue to do business in a global economy so this is what's known as the sunrise issue meaning how can you implement this if your counterparties aren't implementing it but this is actually uh being solved right now we have we built our platform specifically to help companies solve solve this particular issue and it's been quite successful but we what we are seeing is there are many um well there are few key jurisdictions such as south korea who's absolutely requiring it 100 you cannot withdraw funds from a south korean exchange without a full travel rule transaction having a back and forth exchange of information and risk management has has happened before the transaction is allowed which has caused a many companies globally to actually start implementing it before their regulator because they're seeing they need to do so or they will lose transaction volume so the it's changing a lot i think by the end of the year um most major exchanges are going to um going to be live with the travel rule um but it's it's not an easy thing to do because it's a very different way of of withdrawing funds from an exchange that you used to and you could see coinbase announced it the other day for for the netherlands and there's an uproar and crypto twitter about it um but it's also i think as an industry we're trying to hide these things behind the scenes but there's real benefits of the travel rule which is really about identifying where you're sending funds to and you know from the regulators they don't care if if you know where you're sending funds they care that the that the exchange knows where those funds are being sent so they can make a decision this is going to a sanctioned institution or not um but there are benefits for end users as well so if i'm sending funds to my son i would much rather send it to you know have verification that i'm sending funds to my son as opposed to an a anonymous blockchain address and and so what we're trying to do is actually build on building ways where we implement it in a privacy preserving way and also bring real benefits of the travel rule to end users uh but it it has been a challenge for the industry to to implement it because it's many new decisions that you have to do as a as a compliance team it's difficult to operationalize so our solution's been built around solving a lot of these issues maybe i can educate we had a small discussion before our panel this morning and he briefly touched on that smaller jurisdictions started to implement travel ruling they actually had this sunrise problem uh we saw it in in switzerland and in liechtenstein right i mean in liechtenstein i we had operating exchanges out of lichtenstein and then from one day to the to the other they had like they had a month or two to implement it with exactly that problem but i think that is um that is also the advantage of being a small country that he can actually talk to the regulator right and then find a solution together and then they issued um guidance later and i think you briefly touched on on the most problematic issue a lot of people have with with travel role and it's privacy right and you said that that you're working on solutions or you have solutions where you can keep my privacy um and still being compliant with with regulation and i think we will i mean there's no question that we have this regulation that's in place that's even like it's going to be broadened it's going to affect more and more of our transactions that's no question but i think that is my biggest fear that we lose our privacy uh with with this uh regulations i i i agree privacy if it's wrongly implemented can can be a problem with this but one thing to point out is that the travel rule it's not a crypto specific thing it's something that is already implemented uh every time you make a payment within within sepa or swift or even visa or mastercard the travel rule is implemented so when we say that this is a unique thing for crypto it's not it's just now the crypto industry has to implement it but let's try and implement it in a better way than the traditional industry i think that's the real challenge i totally agree that uh that that's the case i think the difference is that as the scope as we have it now is not for like unhosted wallet transactions so if i don't need an intermediary right it's not covered yet but that's on the table right and that's a different story then or would be a different story yeah so the discussions around unhosted wallets it's it's really when you it's not so much about you need to transfer information because there isn't anyone to transfer information to but it is ultimately the travel rule is about understanding who's the counterparty who's your customer sending funds to is your customer sending funds to his own meta mask wallet that's completely fine so how do you prove that some jurisdictions require you to go in and take some additional steps to verify that and this is this is where a lot of the confusion comes sometimes from regulators where they think well why can't we implement the travel rule to to an unhosted wallet so we have to do a lot of education there but it's but it is at the core of it what's the travel rule about it's not about transmitting information it's about understanding are you sending funds to a sanctioned individual and do you have record keeping of who did you send it to and and that's that's really what the trial rules about and those rules from what we see will be applied for non unhosted wallets they just have to be implemented in a better way then you know you know you can't be naive and just say solve it now so the industry has to work on ways of doing it and we're working with industry and regulators on figuring out best and safest ways of doing so that again maintain privacy which is always important but that's exactly the point what i mentioned in the beginning the lack of understanding and also um yeah the not not the not the right regulation on this context the right recommendations i mean the fatf recommended to apply the travel rule on on crypto transactions in the same logic as you would do it on a payment with fiat but this doesn't really work i mean thomas already mentioned it because in a crypto transaction you not necessarily have intermediaries so it could be peer-to-peer and so you mentioned about coinbase what they are now going to trying to introduce in the netherlands and talking about regulation for those of you who know it there was a yeah the case law in in the netherlands where they where they actually ruled that the the the law on the travel rule implementation in the netherlands was not legal and something similar we also face now in germany because germany only put up the law on implementing the travel rule because they had an a review by the fatf on the ground in germany by the end of last year and they wanted to look good in front of the fatf by bringing up this law however we do not have really the standards and the environment to comply with the trav rule in germany and therefore the regulator said okay we have now the law but everyone who's in vasp or casp can apply for an exemption for one till two years just like that so in the end of the day so you can see that we are not there right now and i think what you right now mentioned with patents and with standards and also with yeah terrible implementation i think these are good things but we are not there because the the the crypto environment is moving very fast so i i touched a little bit on celsius in the beginning so for those who are familiar with the celsius incident right now they have paused the payouts i think from 12th of june they have 12 billion u.s dollar assets under management we have other players such as coinbase who just announced that they will uh yeah fired around 20 of the employees we have uh funds like the three ac funds who have invested in luna a lot who have liquidated i think 400 million of assets so these are all um yeah things which are concerning of course but looking now at the lawyers in this round it's josh and thomas so starting with you josh um if i would say from a from a european lawyer's perspective that these players are us players and this is all happening in u.s because of a lack of regulation would that be true or would it be not fair so first i'd like to say nothing that any of us is saying is legal advice or investment advice i don't think that within the us there's a lack of regulation i think sometimes there's a lack of understanding as to how regulation applies but there's plenty of regulation and i do think i mean for me there's at least three things i think going on probably a lot more but one of them is i think there's been a disregarding of the traditional financial law like secured transactions bankruptcy and the like right because you could be drafting an agreement on behalf of a lender right and you expect it to be negotiated by the other side but what i've seen is that in instances where i've tried to negotiate on behalf of the borrower sometimes the lender and it could be the same a similar lender to one where i've written a form right for them they're like whoa we've never gotten comments you know and just a fundamental lack of understanding about what carve-outs you need what protections what things mean because people were saying oh these documents they're take it or leave it we're not going to be able to get you know this interest rate if we don't sign it as is so i think that's one right and also going along with that the bankruptcy ramifications right what happens if you have your tokens in an omnibus wallet held with everyone else's token right that has a different result than if you have it segregated in some kind of a vault or something like that and also you have to read the documents i think a couple of other quick things one is you know they often say or it's often said it's not business it's personal in our space it's business and it's personal and i think a lot of what we see not all of it but much of what we see is driven by personalities and sometimes personalities don't like other personalities and so there are wars on twitter there are all kinds of things like that there are pressures that happen behind the scenes and i think that's really important to take into account sometimes people want certain people to lose right because they don't like those people and our space well i feel like it's the center of the universe it's still small enough that that can happen right i mean it can happen throughout the world but i think it's something important to bear in mind sometimes when things are said repeatedly you have to remember why are they being said what what is the goal of someone repeatedly saying this and then the other thing and again there's a lot more than this but i think the shorts right people coming in not even necessarily from our industry but they see something moving in a direction and they go at it and they just keep shorting and then you'll hear people saying oh i shorted it all the way to the bottom with a sense of pride right like we're supposed to be this ethos of of togetherness you know collaboration decentralization and often when that starts happening i think what we see even for hedge funds and others outside of our space is every man from himself so coming to you in a second just i just want to put the finger in the round so you were talking about bankruptcy and ring fencing the client assets from the trading assets i mean i'm talking right now about coinbase so i i was working with coinbase in the past i helped them in germany to get the license and i remember when we had the workshop of the german regulator it was mentioned that the client assets or the crypto assets of the users who would trade on coinbase are separated from the from the assets which coinbase is using for their own purposes so for prop trading purposes for shorting for other things and then suddenly they in the ssc report they they said no no uh it's not protected it's at risk if if coinbase is is going to default and it's there may be insolvency the assets are not protected and then i talked again to converse and say yeah it's not really true and ssc forced us to bring out that report now we're working on that to to clarify this but i would say again this is again a classical example for a lack of understanding a lack of understanding of where are your assets i mean we have to saying not your keys not the assets and everyone would say yeah it's true so how does it really work for someone who's not really familiar with ssc law or u.

s law and just to bring it like really put it like in two sentences what what is happening right now with coinbase and is is other assets really at risk so i can't speak openly obviously i work for a global offer we have a lot of clients um but what i can say is you know in general if you look at secured transactions law which is where this derives from right there are certain instances in which you could say for example okay i'm going to assume for purposes of article 8 of the ucc the uniform commercial code that something is the security different right from for the sec purposes something is a security now if you're to say okay it's a security then maybe you can be in a position if you have a whole bunch of assumptions and those assumptions all happen to be true that you're acting as a securities intermediary and so maybe there is some kind of protection in certain instances in other instances and i'm not talking specific to any particular uh trading platform wallet exchange etc but in other instances you may have um like i mentioned omnibus wallets where yes people's accounts will be segregated at the end of the day but during the trading day it's all in one wallet right and so you have to really understand okay for for something that happens there where do i fall if there's a secured lender or something like that am i all the way back at the end of the line right and you have to imagine you may think oh those aren't those are my digital assets right but you could be an unsecured creditor you know coming after you know trying to come for what's left yes so okay okay so um i mean i i would still say what i said in the beginning i think that the regulation and understanding in the u.s is not there where it's supposed to be when it comes to crypt assets but looking at lichtenstein and i know that big players and lichtenstein also like bittrex and lichtenstein i think has a benefit of having two things one is having their own blockchain act and the second thing which is very important lichtenstein is within the european economic area and therefore they are going to comply and apply european crypto assets law like soon to be the mika the markets and crypto assets regulations so would you agree what i would say the place to be for starting your crypto asset business is maybe lichenstein i'm kind of biased to that question but i will i will answer your other one and i think i will i will add or actually uh um add my comment here to if and i'm not talking specifically about the yes but i'm uh seeing uh like the global landscape of regulation wherever i am i try to understand a little bit of the landscape um in europe at least and your question was if if if there's a lack of regulation we heard specifically like the the challenges for example the u.s have um if and and that's one general rule if for those who don't know and uh who are not lawyers but if you have a specific law at least in the civil law frameworks which is specifically for one kind of or one specific topic and there's a general law which covers a lot of topics also this one a little bit always the specific law has to be applied right so in general if you have a blockchain act and you have like a general law always a blockchain is applicable and we started exactly that discussion in 2017 in the workgroup because we said yes we have a lot of laws which could be potentially applicable right but we don't know how courts will then actually apply them we will we don't know the outcome and uh we got a lot of feedback from the industry yes they want to comply with even compliance with all of the rules but just tell us how and why and what do we have to do and that's why we said okay we first of all differentiate between crypto assets and financial instruments because financial instruments securities is something different than a crypto asset right and then we uh differentiate between services which are provided by central intermediaries and things which happen fully decentralized maybe we don't need any licenses we first of all we cannot license anyone because there is nobody to attack right there is no no person individual which is really providing these services and i think that comes back to your to your thoughts on you have to understand first right you have to understand the potential of these technologies you have to understand also the risks and then you hopefully come up with good regulatory approaches so i think yes if you have a tailored a tailor comprehensive regulation which is tailored for this industry i think that is that is beneficial because the entrepreneurs know where they are uh the regulators know how they should apply these laws right um and then it's anyway an ongoing process you have to constantly evaluate and and actually make it better um and i i was at a panel uh uh some weeks ago and there was one person uh like re rephrasing this duck sentence so if it walks like a duck if it smells like a duck it's a duck and we we said okay but sometimes it's really a challenge to find out if something is a security and we have we have the same challenge in europe but it's not that of a big problem because we have a rather a good idea of what is the security and what is not and uh so we talked about that and then in the end he said you know if we tear apart the dog so we have to really look very very closely if we tear it apart and look at very closely what it is how it was constructed gather what are the licenses or or the claims and whatever we can tell you if it is a security and i said okay so basically you have to kill the duck first and then you know what it was so that shouldn't be the approach right that that's my take on that and if liechtenstein is is the best place i i think there is no best place it really depends on uh on your uh like which products and services you are wanting to offer and what what are your target markets right and every jurisdiction has pros and cons but at least it's worth to have a look at yes and i think i have to apologize to georgetown to the u.s uh visitors of course i had to do this data where the scoliot approach to take like the u.s market and lichenstein and try to give some some yeah handicap to to to the us and try to push lichenstein i mean what we i think all can agree on that is that the crypto industry is complex and there is no right uh framework and no right approach right now however we have to really try to do our best to apply this to the right approach and what i read last time about the u.

s what's very interesting this comparison between uh sam bankman freed and jp morgan for those of you who are good of history when we had to crash uh like 80 90 years ago in the banking industry jp morgan helped out all the banks in the u.s market those who really were in need because jp morgan thought that if he helps the banks with his private funds and they go through the crash and then it will help to really keep the u.s banking and capital market live and i think something similar sam is right now doing can you a little bit explain on that josh sure i mean i'm sure he's doing a lot of things that none of us know as well but um recently you may have seen that um there was a large secured loan right extended 250 million i believe um to block fi now um i don't know the ins and outs of this deal but one of the things that's super interesting um at least what's been reported in the press so take this with a grain of salt is that apparently he was the only lender that was willing to allow the customer assets to go ahead of his interest so i mean that is really i i think you can read a lot into other things like um i won't go into the details of what's been reported but but i do think that that does show faith in the industry and caring for customers right um say what you will but not taking having a large loan like that and not trying to take a first lean position that's really unheard of but as for whether he's going to become the the new jp morgan i mean i think jp morgan's probably trying to become the new jp morgan too right i mean without like i we many of us i'm sure represent a lot of banks as well as digital asset native companies um i think it's really interesting to see as well what is being reported just in the press again without verification of it but just allegedly goldman sachs is trying to find a group or pull a group together to help certain um defy lenders so it's i think i actually think what's going on is um incredibly interesting it shows also i think just going back to sam for a second obviously he knows the industry he knows the players um and so i think that positions him very well for this yeah great so i would like to ask each of you to explain in within one minute how your your topic like patent could help right now in the in the current crypto environment to to make the environment better so maybe you start mark and then we go through okay uh i'd be glad to uh so that this is a topic the good good patent versus bad patent topic and how whether patents foster innovation or hinder innovation is a topic that that we or at least i could discuss all day but i promise not to so yeah patents uh when used properly can foster innovation and the blockchain space will be no different and and that's a big part of why i'm here and a big part of what lot network is about is about allowing the proper use of patents for innova true innovators to share and be compensated for their innovation without hindering innovation by having unnecessary patent litigation and and that takes just like uh blockchain development it takes community and and it's all about patent community lot network is a patent community there will be patent pools but it takes participation of the entire community and uh i i i recommend to everybody here that you look into that because you you have the choice right now whether you want the blockchain space to be the subject of unnecessary patent litigation or the subject of sharing innovation in a way that allows others to to utilize your innovation you to utilize their innovation in a community-like atmosphere is it under a minute great okay great so please okay so so far the last 10 12 years and particularly the last 10 years crypto most of the conversation we have it's about traders trading people who are who are you know buying and you know there's all the leverage all the leverage trades all of those kind of things i think what we have an opportunity to do now as we're going into this crypto winter or some people uh call what we're entering now is to build new applications where we tie things out into the real world and that's really what the travel rule is even though it's implemented because of a different purpose but it gives us in the industry a tool to build for new use cases whether it's payments e-commerce any of these kind of use cases when you're trying to figure out how do we grow this industry so i think it's really exciting to be part of that and help push crypto forward i will make it short i think that it's somehow similar to patents uh regulation could foster innovation or hinder innovation so i dedicate my time to george and stephen oh thanks well i just want to say something about crypto winter so because that term seems to lead to a lot of other terms i feel like we should change it like a crypto hurricane or we can even name them right they come and they swirl things up and then they go right as opposed to sticking around for way longer than a season so that's um that's what i would say i think we need to rebrand that um to be a package branding again with exactly more marketing exactly um yeah thank you everyone i've i've passed to you sure um so we talked a lot about the the kind of fast-paced evolution of the the crypto space and i think one thing that we see on the anna side is that it's going to take us a long time before we're in a fully tokenized economy so we've still got traditional financial assets over here we've got crypto assets and how do you marry and bridge that i think that standards can help do that some of the comments here about classification and taxonomy and treatment securities is it a security is it not a security there are other suites of standards as part of this iso standard universe such as classification of financial instruments which will help to identify and help answer that question obviously the lawmakers have to make the determination first but these become the tools and and that's why it's important that this standardization standardization topic is kept at the same peer level as the the technology and the regulatory conversation thank you stefan thank you everyone and i think we are at the end of our panel but you can approach each of the wonderful speakers at the event i believe you're all staying for the next two days i would like to thank you all and please applause for the speakers and applause for the moderator