Governments and lawmakers around the world are increasingly looking to regulate blockchain and other emerging technologies to protect citizens from bad actors. While overzealous regulation can be cause for concern, having legal clarity creates certainty for businesses in the space.
This was a main panel discussion at the recent Technology of Tomorrow Conference in Poland. The panel was hosted by Pawel Kuskowski (CEO of Gatenox) and included:
- Katharina Lasota Heller (Founding Partner, LEXcellence Legal Services);
- Michal Nowakowski (Counsel, Rymarz Zdort Maruta);
- Marcin Zarakowski (Executive Committee Member, BSV Association).
Stability and clarity needed in blockchain space
Heller began the panel by noting that the majority of blockchain companies and startups are acting in good faith and not looking to defraud customers or act criminally. Instead, they need clarity and guidance on whether their business model is lawful. She added that this is one of the single biggest concerns facing these businesses and that as much as 60% of investment money can be spent on legal and regulatory issues.
This was echoed by Nowakoski who noted that a stable and clear legal environment is vital for any business – irrespective of the business model or sector. ‘We need regulation and we need regulation that is clear so that businesses can continue.’
He pointed to the recently introduced Markets in Crypto Assets Regulation (MiCA) which came into effect in the European Union in June 2023. While this is a step forward for the region, the crypto asset business is inherently global which means that more needs to be done at the local regulatory level.
Finding a place in the global financial market
Zarakowski noted that the crypto asset industry is still relatively small compared to the larger financial market and that there is a tendency for businesses operating in the space to ‘live in their own bubble’. He added that the technology is also still relatively nascent which means there will naturally be growing pains around regulation.
He added that some exchanges and businesses are deliberately operating within a grey area and using the lack of regulation and obscure structure so that it can be difficult to find someone to sue when something goes wrong.
He reiterated that regulations such as MiCA are positive as they give clarity to players outside of the crypto-asset community (including banks, governments and blue-chip companies) to operate within the space with more confidence.
‘(They will be looking at the space) not from the prism of crypto scam and some geeks trading coins but really to look at the potential of the technology – otherwise they will not step in.’ Another positive development is that US regulators are actively looking to learn from the European market about how best to regulate the sector, he said.
BSV Association is pro-regulation
BSV Association is pro-regulation and believes that the global adoption of blockchain technology requires enterprises and lawmakers to become comfortable with legal compliance by industry participants.
To ensure the development of a regulatory environment that both fosters lawful conduct and facilitates innovation, the Association regularly engages with leading policymakers to advise on the development of positive policy.
We believe that regulation provides clarity on legal obligations, encouraging compliance, good governance, and accountability. It also fosters innovation and market development by providing a clear legal framework, building trust, and attracting investment.