The cryptocurrency industry is still bounded by a loose legal framework, and a recent meeting by key players at New York law firm Sullivan & Worcester LLP has predicted the direction the crypto industry is headed in the legal and regulatory space in 2019.
Legal Issues in the Crypto Industry
The United States Securities and Exchange Commission (SEC) has been one of the major balm and thorn behind the regulatory issues that have reared up over the years in the crypto industry. In 2019, the cryptocurrency and the digital asset industry, in general, hold a very important power in the tech and financial ecosystem, yet with an industry trusted with so much power, there is little legal framework checking and putting it in its place. The more reason many fraudulent Initial Coin Offerings (ICOs) and cryptocurrency scams have been successfully executed without much retribution. While many parties might lament the lack of a solid regulatory framework in the crypto space, just as many have not found the frequent involvement of the SEC encouraging either.
Potential cryptocurrency startups and ICOs have been wary of being classified as securities by the SEC because of the legal costs involved and so would prefer to bask in the loose legal system bounding the crypto industry instead. It is no surprise Coinbase Pro had a yearlong reluctance to add Ripple’s XRP to their listing index given Ripple’s ongoing class action suit.
However, after a decade of a new and emerging industry trying to find its feet on the legal and regulatory landscape, experts and key players are predicting an imminent address to a common and solid regulatory framework.
What to Expect in the Legal Sector in 2019
The important area of regulations and legal boundaries was explored exhaustively at a panel discussion at a New York City law firm Sullivan & Worcester LLP according to Forbes. The discussion included several important players in the industry such as Joel Telpner, partner and Chair Fintech & Blockchain Practice at Sullivan & Worcester and Wilfred Daye, Head of Financial Markets. According to Telpner, 2019 should see the cryptocurrency industry make major landmarks regulatory-wise as he sees the industry outgoing its ‘emerging-industry’ tag.
“We’re at the end of the beginning,” he said. “This is about moving from the wild, wild, west to a more mature level of the digital currency space and tokens. Those that remain have to work hard and understand that success will come from fundamental principles in business and governance, and it will certainly pay off.”
Telpner has also predicted the SEC and the CFTC (Commodity Future Trading Commission) in particular to become more involved in the token space as more tokens are considered to be backed by commodities.