The world is interested in cryptocurrencies. In the United States and the European Union, individual investors have shown that they are intrigued by its possibilities, while emerging economies are taking advantage of it to expand access to financial services. This, of course, is attracting the attention of lawmakers who want to harness the potential of cryptocurrencies and ensure that investors and consumers are well protected. But with cryptocurrencies’ international footprint, new and dynamic technologies, and built-in anonymity, it is challenging to protect user privacy and control illegal activities.
It is likely impossible for regulators to walk the fine line between fostering innovation and protecting consumers without developing adaptable, deliberate and internationally coordinated regulatory measures, and to do that, they need the help of crypto leaders. It’s an effort well worth those leaders’ time if they want to improve industry credibility, attract new users, and avoid complex (even punitive) legislation that could hinder innovation. Below, 12 members of the Cointelegraph Innovation Circle offer practical advice for crypto leaders on how to work individually and as an industry with regulators for the benefit of both parties and the future.
Focus on use cases without specific binary regulatory requirements
It is important to involve technology-savvy leaders who understand how regulatory systems are applied. Financial systems and technology were very different when the regulations were first developed. Consumer protection and market integrity remain primary goals, but the means to achieve them have changed. Leaders can add value by working with regulators to focus on use cases without specific binary regulatory requirements. –Tammy Paola, Zero capital
Prioritize transparency and education
Proactively engage with regulators, prioritizing transparency and education. Understand their concerns and position your dialogue as a partnership. Demonstrating a commitment to ethical practices and consumer protection can foster mutual trust and clearer regulatory pathways. – Tomer Warschauer Nuni, cryptomon
Recognize that regulation can be an ally
crypto leaders should recognize that regulation can be an ally. The “wild west” nature of cryptocurrencies invites scammers like FTX and Terra, so adopting regulation with careful collaboration helps the ecosystem as a whole, allowing the cryptocurrency industry to become more secure and credible, by while protecting investors. Leaders must encourage transparency and responsible practices, and work with regulators to build trust in the industry. –Ayelet Noff, SlicedBrand
Document everything regulators tell you
Interact with your regulators, but document anything they have told you, especially any promises or implied support. Know everything there is about the applicable laws in your country and try to stay away from blatant violations of those laws. Always know when they are trying to make a novel argument in court and know how to defend yourself. –Zain Jaffer, Zain Ventures
Help calm regulators’ concerns
Approach the conversation from the perspective of calming regulators’ concerns. Often when trying to craft legislation, regulators approach the industry and are met with distrust or even hostility. Companies should focus on educating and informing governments about the industry’s priorities and how they can get there without risking contagion to other parts of the financial system. – Jason Fernandez, AdMoon Inc.
Listen carefully to input from regulators
In the world of music, cryptocurrencies are avant-garde jazz, while regulators are more in tune with classical notes. To create harmonious music, listen carefully, combine its innovative riffs with its timeless chords and together compose a symphony of progress. It’s not about overwhelming, but about creating a new genre that resonates with everyone. –Arvin Khamseh, NFTS SOLD OUT
Help shape regulations that benefit both parties
Let’s keep in mind that many regulators are in the process of understanding and understanding the Web3 industry. Therefore, every Web3 company should help shape regulations that benefit both parties. The most effective approach involves showing a willingness to cooperate, addressing concerns, and educating regulators, encouraging the most favorable outcomes possible. –Sheraz Ahmed, STORM Partners
Consider how similar companies in the industry can work together
Build on the premise that together we will go further. Even companies working on the same or similar products should consider how they can work together to achieve goals beyond their individual growth. The industry is still in its infancy and together we will find widespread adoption and tremendous success, especially as we work with regulators. –Megan Nyvold, BingX
Be cautious, obedient and patient.
Regulators aim to make things as best as possible for all parties involved, but sometimes that process takes time. That’s why it’s always a good idea to be cautious and docile while also being very aware that things may not work out at first. It is recommended to document everything and help find solutions, as this space is a work in progress for everyone, but the end goal is the same. – Ilías Salvatore, Flooz XYZ
Offer direct and clear assistance toward shared goals.
As a bonus to trust, transparency should be a priority for companies seeking to collaborate and build solid foundations with regulators in any jurisdiction. These officials are designated to protect the safety of participants in their region. By offering direct and clear assistance in achieving that goal, crypto leaders can ensure that understanding is maintained through mutual respect. – Oleksandr Lutskevych, CEX.IO
Addressing myths and misinformation about cryptocurrencies
My advice to crypto leaders is to try to deal with the myths and misinformation that has been swirling around cryptocurrencies as an ecosystem. Many of these myths can be addressed with accurate data. For example, the drawbacks of proof of work are used to smear the image of the entire cryptocurrency world. Another example is working against the image that cryptocurrencies are used to evade taxes. –Abhishek Singh, Acknowledgment of receipt
Proactively undergo third-party audits and certifications
Leverage third-party audits and certifications to demonstrate compliance and security. Regulators may not be blockchain experts, but they understand audits. Conducting these assessments proactively can make a compelling argument for the legitimacy of your project, which could expedite regulatory approvals and foster a cooperative relationship with authorities. – Tiago Serôdio, Partisia Blockchain
This article was published through the Cointelegraph Innovation Circle, a vetted organization of top executives and experts in the blockchain technology industry who are building the future through the power of connections, collaboration and thought leadership. The opinions expressed do not necessarily reflect those of Cointelegraph.
