Safeguarding the Financial Revolution | European Blockchain Convention

foreign [Music] so I did a dry run last night and it ran about 20 minutes and that's what happens when you give when you give a lawyer a microphone they'll talk forever so uh anyway uh thank you for uh for being here and for and for coming to hear the uh the talk on safeguarding the financial Revolution uh it's a little bit odd sometimes to start a speech with a thank you but I thought that it was appropriate uh after uh after the chaos that was 2022 to uh to thank all of you for being here uh and also to thank uh European blockchain uh convention for uh doing everything that you do uh for the space uh you you guys are all the Beating Heart of this industry and uh and we surely needed it after last year and shane.ai where I'm crypto compliance officer uh we released a uh web 3 risk annual report uh showed four billion in in exploits uh last year alone which actually amounted to if you if you looked at the exploits by highest dollar value uh in all of uh blockchain history UH 60 of them uh nine out of the top 15 happened in 2022. uh we also know that uh there were some unfortunate incidents uh largely unrelated to the technology itself mostly to the uh the sins of the human being the sins of the flesh if you would uh so it was a very rough year and I thought it was appropriate to to start out by just thanking everybody for being here and keeping keeping this beautiful thing going and thank you thank you and uh and I would be remiss uh not to mention that uh it's also uh very close to my heart that I'm back in Barcelona after 20 years uh the last time I was here was in high school with a Spanish trip uh unsanctioned by the school itself but our our professors were beautiful enough to want to immerse Us in the culture and the language while learning the language and so uh being back here in Barcelona to give a speech on such a topic of passion for me is also another beautiful thing so I thought that these were worth noting for you before we get to the uh absolute fun that is regulation compliance uh just a little bit about myself uh Michael fassonello again crypto compliance officer for Ann Shane dot AI uh I spent 10 years uh working in the public sector in the United States with the Departments of Treasury uh and and Department of Justice with Justice I was with the asset forfeiture and money laundering section of the Criminal Division in Washington DC uh handle a lot of asset forfeiture and money laundering uh litigation cases case management support for the ausas and things like that uh I bounced around the Civil Division for a little bit uh was that the solicitor General's office uh which if you're not familiar with the United States uh is where the government positions its lawyers to argue before The Supreme Court so that was a very interesting role uh with treasury I was with the office of foreign assets control handling uh sanctions licensing cases and policy legal interpretation uh enforcement actions and a little bit of support for their intelligence uh unit and then I rounded that off with a stint at fincen Financial crimes enforcement Network handling Bank secrecy act uh and and other illicit Finance regulation development policy development uh advisory and training of the uh training of the other compartments and the treasury uh then after hold on one second there we go I can handle blockchain I can't handle a simple remote um after uh after governments I uh I went to bittrex very briefly only about a month there uh the uh the family uh relocated to Pittsburgh and so I was leaving the DC area uh sooner than I expected but uh bittrex was where I really caught the bug for incorporating compliance uh with web3 and with blockchain into my career uh sadly I was with them again only for a month but then I went over to uh traditional Finance for a little bit uh PNC Bank and First National Bank uh to to large domestic institutions in the United States where uh it reminded me how a very boring traditional Finance can be so I wanted to get back into web 3 and after leaving PNC Bank I I worked with a firm called blockchain intelligence Group which offered me a course which enabled me to learn everything that I could zero to 60 uh basically on blockchain cryptocurrencies digital assets and the like after blockchain Intel I worked for a hybrid financial institution uh Neo bank and also crypto exchange called level as Chief compliance officer there and then most recently and shane.ai picked me up and now I'm handling everything all these different hats from policy enhancements to products legal interpretation and of course training and speaking to uh to large audiences so a little bit about and chain.ai we were founded in 2018 we are a Wall Street and Silicon Valley venture capital uh funded uh cyber security and risk management firm uh AI powered of course as is in the name we were a CNBC top startups for Enterprise Award winner in 2022 and we were selected for the Berkeley blockchain accelerator uh were regularly featured by Tech media and journalism and our co-founders uh Victor and Ben were from mandiant and FireEye so uh blockchain is a revolution in finance as we know uh and it's important that revolutions like this are safeguarded properly we've seen uh over the past weeks months and even years uh the overly broad application of current regulations that don't often fit uh the way they should with our industry versus traditional Finance we've seen legislation come out around the world where legislators are not properly educated on the technology and the participants themselves so how do you regulate something that you don't understand right so a lot of what we do now at and Shane besides uh providing products and services to provide security and risk management is also to educate I like to say uh regulation through education so regulations take time I'm sorry uh revolutions take time um you know think about electricity cars uh even you know the internet you can go on Google and find snapshots of newspapers where people mocked the internet it was just a fad uh it's just a passing fad thing things weren't going to work out with it uh electricity you can find cartoons uh of people mocking electricity uh back in the day and as we know these are very very critical to today's way of life so I see the same thing in blockchain you know we're being attacked from all angles uh people are scared of blockchain and crypto they don't understand it uh they mock us they say there's too much access to illicit finance and money laundering and uh terrorism and all that stuff but it's also a beautiful thing because there's real-time access to payments that this faster than ever before cross-border you don't have to you know carry pounds of currency with you uh you don't have to wait you know several days for a wire transfer to be settled so there's a lot of Beauty in the space and I think that it's it's our responsibility to take that message everywhere we go with us otherwise what are we doing here right you want to uh you want to spend your time on things that you're passionate about um so regular revolutions do take time uh regulations of course it's kind of a dirty word and specifically in defy um but in you know in digital assets a lot of people don't like to talk about compliance they don't like to talk about regulation and I understand that as somebody who's um you know I've been in the government I've seen what happens on that side of things uh I'm I've always been you know very suspect of it but at the same time uh you know there's a certain amount of Regulation that lends credibility and Trust uh and does to a degree mitigate risk I think this morning one of the speakers and their keynote said we're never going to get rid of illicit Finance we're never going to get rid of crime in this ecosystem and that's true but you know we're we're never going to get rid of that in Fiat either right so how is it different you know for us in crypto whether other than it being a new form of technology that people are scared of um so the properly scoped regulations will encourage that adoption that we've been looking for uh Regulators must be informed again talked about a little bit the fundamental misunderstanding of this technology uh Elizabeth Warren and a couple of other uh senators in the United States as a knee-jerk reaction to the FTX crisis uh they issued a proposed uh law for the digital assets anti-money laundering act which is one of the uh most aggressive uh adverse actions taken uh you know as a threat against unhosted wallets and self-custody that I've ever seen um and and this is not the first time that Congress has released a a proposed law that is overly broad it covers parties that have no way of complying with those regulations should they ever be passed and so it's just a prime example of the need for education in order to have proper regulation lastly regulation must be properly scoped and again in order to fuel that we need to educate so I think we've covered a couple of these points um a bit of getting risk and abuse securing assets yeah I mean it's uh it's it's a it's a it's a it's a strange time we've got the SEC now coming out uh and attacking uh The Lending lending platforms uh stable coins uh staking all these things that if they understood and it's interesting because uh Gary Gensler uh taught at MIT right he's a blockchain specialist so we have somebody who's actually the head of the SEC uh putting out these overly Broad and overly scoped uh regulations while they understand very well what the uh what the technology does and and how it operates so to me it's uh it's it's largely a power play in governments where they they understand that this is not only a threat to the traditional system of Finance but also to their control uh you know over the civilian populations and so you know it's important that we have associations that could step up and be sros we just had a meeting shortly before my talk here with a uh with an organization representing uh you know blockchain in Europe and so it's important that the industry can stand up and actually speak for the technology and for the participants in the event that The Regulators even the ones that are Edge educated decide to act sort of outside the scope of what would be appropriate for this for the space regulation must be properly scoped again you know when you're dealing with different assets different parties platforms and use cases you know with assets are we talking about coins contracts tokens Etc are we talking about developers miners stakers validators platforms how about custodians exchanges market makers and then use cases we know crypto crypto itself can be a commodity it could be a currency it can be a security according to the SEC every other day they tell us that so it's just really important that we properly scope these regulations to fit the parties uh as they should you know a minor validator it's very difficult for them to comply with regulations asking for uh you know the the divulging of kyc information that's how does one do that right um and so thank you very much uh we we are we are the new blood uh of the uh of the global Revolution and finance and again thank you all for keeping its heart beating after 2022.

thanks for listening to the talk on on how regulation and compliance can help save safe Safeguard this beautiful space I appreciate it [Applause]