The days when digital assets were considered a lawless wild west which was beyond the reach of regulators is way behind us. On Day 1 of the CoinGeek Live conference, some of the leading minds in the legal industry discussed the regulation of the digital asset industry, letting us in on how to build a compliant Bitcoin business in the U.S., Japan and the European Union.
While regulators started off on the back foot in policing the digital assets industry, most of them are now catching up, Joshua Ashley Klayman told the virtual audience. Klayman is a senior counsel at Linklaters LLP, a London-based law firm with over 3,000 lawyers across the world. Based in New York, Klayman works with digital asset companies that are seeking to get into the U.S. market.
“It’s been said many times that there’s a lack of regulatory clarity. I think at this point, that’s just an excuse. I think if you engage with the regulators, you can find a path forward,” she remarked.
Klayman was joined on stage by Howard Schweitzer, the CEO of Cozen O’Connor Public Strategies. The other panelists were Masakazu Masujima of Tokyo-based law firm Mori Hamada & Matsumoto, and Dr. Lukas Repa, the head of digital innovation and blockchain at the European Commission.
In a panel moderated by Bitcoin Association Founding President Jimmy Nguyen, the speakers shared some of the most common concerns that regulators have with digital assets. Consumer protection, cybersecurity, privacy, fraud, AML and KYC procedures and environmental friendliness were some of the most common across most jurisdictions.
Harmonization of digital asset regulations has also become one of the key talking points in recent years. In the U.S. for instance, digital asset service providers have to acquire licenses in every other state they operate in, making it quite hectic. The BitLicense in New York has been among the most controversial, with some major companies avoiding the state altogether.
The Digital Community Exchange Act in the U.S. is seeking to eliminate these state barriers. Approved by the House of Representatives, the bill is seeking to bring the industry under the jurisdiction of the CFTC. In Europe, the European Union is also working on an EU passport for digital asset companies that allows them to obtain a license in one country and use it across the 27 member states.
While there’s need for regulation, there must be a balance between consumer protection and promotion of innovation, the four panelists jointly proposed. In Europe, the EU has been encouraging the creation of regulatory sandboxes, while in Japan, self-regulatory bodies are bridging the gap for the authorities.
To conclude, the panelists urged digital asset service providers to engage with regulators more, presenting them with solutions to their concerns.
“There are people at these regulatory bodies who are willing to work with digital asset companies. Engage them, tell them this is how we plan on solving your concerns from the onset,” Klayman concluded.
Watch the CoinGeek Live Day 1 panel, Regulation of Digital Assets & Digital Asset Businesses.
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