Highlights from CFR event 'Legal Tender? The Regulation of Cryptocurrencies'

In an event organized by the Council on Foreign Relations, CoinDesk reporter Nikhilesh De, CNN reporter Jose Pagliery, Maria Vullo, Superintendent of Financial Services for the State of New York, and Marco Santori, President and Chief Legal Officer at Blockchain; discuss existing laws for digital currencies, potential areas for abuse and crime, and the best next steps for governments to keep up with the technology. Below are some key quotes, via CoinDesk's Twitter feed, from the ongoing event.

  • Maria Vullo: " I think a lot of these token sales run afoul of the spirit of the law, if not the letter of the law. But we have to be careful not to lump them all together."
    • "I think the SEC has done the best job possible in its efforts to regulate token sales."
    • "In many ways, this is no different than other types of banking-related services where you have the state regulators, you have the public companies that are also regulated by the SEC and the CFTC."
    • Responding to a question about why regulators are taking so long to create a framework for cryptocurrencies: "Well it certainly hasn't taken New York York long to establish a framework."
  • Marco Santori: "I wouldn’t say that ICOs are tools for avoiding regulation. People who are running token sales are trying to do a lot of things, including raising money. it’s not just about avoiding regulations."
    • "I think everything that can be tokenized will be tokenized ... I think tokens will make illiquid assets highly liquid. That comes with risks ... but it also has tremendous potential."
    • "The U.S. can export its laws around money through the G20 but it cannot export its laws around securities. A lot of the money pouring into ICOs are from professional investors in different countries - not casual American investors"
  • Jose Pagliery: "The question about whether or not accredited investor laws need to be looked at ... the law about whether you need a certain amount of wealth to invest, I think that's terribly unfair."
    • "There's this idea in cryptocurrency that code is law, that the code is the rule, it's not going to change, you're not going to be affected by some central bank board changing the rules willy-nilly."
    • "What we've learned is that code is law, but coders have the power ... they have no responsibility toward you that I've seen by law ... we have to figure out how these people are held accountable."
    • Responding to a question about the potential use cryptocurrencies by terrorist organizations: "I don't know ... I try to put myself in the shoes of someone who might benefit from this ... cryptocurrencies are such a terrible store of value that you'd be better off trading in oil."
    • "To access cryptocurrencies and use it you need to be able to access the network and use it. It's great for cybercriminals who want to get paid for ransomware ... but terrible for terrorists."

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