How to Mobilize and Achieve Smart Policy in Washington - Kristin Smith

super excited to be here today this is my first time in eath denver and it's great to see so many people that are building so many awesome things um i'm kristen smith i'm the executive director of the blockchain association and what we do with the blockchain association is we're a trade association representing 80 different companies in the crypto space including many d5 companies and we do a couple of things one is we propose policy solutions to different issues that are out there which is not an easy task because so much of this is new and evolving so quickly so jake chervinsky who some of you may know from twitter heads up that effort we also have a lobbying team who interacts directly with governments and with you know policy makers on the regulatory side and the legislative side in washington and then we have a communications team that helps us get the messaging about how to communicate these really complex topics to policy makers so it's a lot of work we've grown our team has grown the industry has grown and it's a really exciting time to be working on these issues in dc what i want to talk about today is some of the problems we've been facing and some of the problems we're going to be facing in the months and years ahead and then i have a five specific ways that you can participate in the efforts so that we can actually get really good public policy outcomes i know there's a lot of bad headlines that we've seen in the news a lot of people are worried about executive orders you know there's there's sort of rumors of a crackdown i i actually think as a as an industry and as an ecosystem we're at a really strong place right now in washington and our political power is only growing and if we continue to work together in a coordinated way i actually think the policy is going to work out just fine um that doesn't mean we're not going to have some bumps along the way and so um with that i want to give you a quick history of some of the challenges that we've worked to overcome over the past you know 18 months or so the first was at the end of the trump administration when secretary mnuchin was on his way out of the door he proposed this last minute rulemaking that would have been hugely problematic for what they called unhosted wallets it basically would have effectively prohibited prohibited centralized wallets from interacting with unhosted wallets which would have put significant friction into the system and fortunately the community was able to come together we had seven thousand comments filed with the treasury department uh we actually prepared an entire legal challenge and we're going to sue secretary mnuchin and but but because of that pressure they backed off and they haven't picked up that rule making sense so we were able to win that one fast forward to last summer in august there was this infrastructure bill going through the senate and this one included a provision that greatly expands the definition of broker to potentially capture miners stakers hardware wallets software wallet software developers who would be on the hook for providing tax information reporting documents to the irs um this one everybody got super upset about and there were about 40 000 comments that were or phone calls into the senate in the course of five days and because of that effort we actually weren't able to get the language fixed but there's been so much pressure on the irs that they've indicated in a letter last week that they're going to much more narrowly interpret the definition of broker so still have some work to do there but we're on a really good path just a couple weeks ago there was another last minute provision tucked into something called the america competes act and this time when we you know immediately saw it was in there the the authors of that provision took it out within about 48 hours because what they didn't want is to experience another infrastructure battle from the summer where we basically held up any any legislation from moving forward so we've definitely had a few fire drills along the way and the good news is we know how to respond to that but looking forward i think there's some issues where we're going to need to be still defensive but in many cases actually be proactive so the first is climate this is an issue that i think there's a lot of misunderstanding about with policy makers a lot of it is focused on bitcoin mining but most policy makers don't yet differentiate between bitcoin ethereum and any other chains and so i think it's important as a community that we defend proof of work as as a model while also explaining other models that are out there or other consensus mechanisms that are out there so that's one where we have a lot of education to do number two is anti-money laundering policy we've seen this come up multiple times in the past and every time there's a ransomware attack or some other criminal activity there's going to be a group of policy makers that wants to crack down on that we need to hold the line and make sure that we don't get any new policies enacted and do a better job explaining all of the technologies out there that enable law enforcement to go after bad guys when these things happen the third is staplecoin policy this is um thanks to our friends at facebook when they announced libra several years ago this has been kind of an obsession with many lawmakers and policymakers in washington and the good news is we've gone from wanting to sort of ban something that looks like a stable coin outright to trying to figure out the right way to do disclosures about reserves and of course i'm obviously talking not about dye or terror or anything like that i'm talking about like usdc there's discussions now happening about what the reserve should look like how the audit should work and i think that's actually a pretty healthy place to be and something that is is going to be in compliance i think the key issue is we want to make sure that issuers of reserve back stable coins don't have to be banks we want them to be able to be a bank if they want to but we don't want them to have to be a bank and so that's a conversation that's ongoing as well number four is there is a slew of tax issues out there that we need to take action on um there's obviously this information tax reporting issue i discussed earlier but there's also questions around staking rewards there's questions around lending there's a lot of clarity that we need to get written into the tax code and so that's something that we're going to have to be proactively working on in the months and years ahead and last but not least is is sort of all things gary gensler at the sec he's like his own issue he uh you know is very interested in bringing more regulation to the crypto space and from his world view he thinks almost all crypto assets are securities and i think most of us working in this space take a different view and so i think there's going to be a process over the next couple years as to what are what are the real concerns what needs to be done to make sure in everyday investors have the right kind of information to make an informed decision and who's the right person to do that it shouldn't be the necessarily the group of developers that work on a project and then go work on another project that are then on the hook for the rest of their lives to do reporting but there's got to be some way to get investors really concise information about what they're investing in and then also make sure there's no sort of market manipulation happening and that's going to be a debate that's going to play out it's probably going to be something that ends up at the cftc or the sec but but i think if we do it right that can actually end up bringing more investment into this space it'll bring the institutions in and it it will you know allow developers to continue to do all of the great work that they do without having to worry about the sec hanging over their head so i do think we have a lot of work to do so the good news is everyone in this room can help you don't have to be living in washington like i have the lovely privilege of doing uh to work on this so um so there's five things you can do number one if you're at a project and you don't have a lawyer you should really get a lawyer having a general counsel who can help you understand the risks and help translate those risks to those of us working in washington is a really important step i'm not a lawyer but i work with a bunch of great lawyers and it's a really really important step i think some of the greatest thinking in this space has come from you know the general counsel at ave the general counsel at dydx at uniswap like these are really really important people to have on your team number two is to support existing organizations in washington there are a lot of us have been doing this work on you know for a long time so if you're a company you can join the blockchain association if you're an individual you can support coin center they do amazing amazing thought leadership in this space and do a lot of advocacy work and are a really important voice so you know there's a lot of us that want to do more we just need more resources to do it and so supporting existing organizations i think is really important number three is be a political contributor to crypto champions we see candidates right now all across the country who are running on a pro crypto platform we have matt west we have morgan harper in ohio we have erica rhodes in los angeles so these are candidates that these are the that we want to be elected so that they can help us make good policy we also have a lot of existing members of congress and members of the senate who have been long-time champions and if you happen to be in one of their states or districts you know get to know them and support their efforts as well because we want to reward good behavior and take care of those that are trying to take care of us number four is when your organization gets super big you should open a washington office it's very common for companies in dc to have full-time people working on government relations issues working on regulatory issues you know this is a step that maybe not everyone in this room can do but for those that have the resources and are large we need more bodies on the ground working on this issue and then last but not least and probably most importantly i would say join the conversation there are a lot of great people that are doing work in this space and like last year with secretary mnuchin's rulemaking or over the summer with the infrastructure bill when something bad happens we need people to mobilize and i actually think this is crypto's superpower we're so used to working in a collaborative fashion you know very quickly in an asynchronous sort of way that most other industries don't do this right and so when something bad happens the ability for us within a matter of hours to start to generate conversations on twitter to get letters and phone calls into the senate i mean this is an amazing superpower that i have not seen out of any industry that i've worked for in my 20-year career in washington so you know pay attention and when the time is right you know be a part of those efforts because they actually really really do work um i don't you know when we're in dc um myself and my team we have a it's a it's a challenge we're starting to get through but it's really hard to explain to them the power of decentralization and i think we're starting to get that message across this is an audience where decentralization needs no explanation i would say though that the ironic thing is that for decentralization to become a commonplace understanding in washington we actually need to unify as a community in order to make sure our messaging is accurate and consistent and on the same page we're going to lose if everyone goes in with a different message or a different ask or a different request we really need to work together and that's what a lot of our groups on the ground in washington are working on building the coalitions we need making sure we are all on the same page and that we have the same asks so um with that i would say you know please follow us on twitter follow jake travinsky on twitter on our team follow the guys at coin center everybody probably already follows niraj anyway um there are a lot of good people that are doing a lot of good work in this space and so um you know we invite you to be a part of that conversation and you know if you want to chase us down afterwards because you've got a bunch of money you want to pour into the effort let me know