Crypto Newsletter 12/5: What Can Marco Polo Teach Us About Crypto?
SEC Chairman Jay Clayton offered more insight to crypto entrepreneurs after speaking at CoinDesk’s Consensus: Invest event last week. He again warned the audience to treat tokens as securities, particularly within the context of financing a business with a token sale. Clayton also had this to say when asked about how the surging prices of internet stocks in the 90s and 2000s differ from the volatility of digital currencies today:
“Those stocks traded on exchanges where there were rules and surveillance designed to prevent manipulative techniques[…]those kinds of safeguards do not exist currently in all of the exchange venues where digital currencies trade[…]it’s an issue that needs to be addressed before I would feel comfortable that the prices that people are seeing, that the retail investor is seeing, are the kind of prices that they’re used to relying on and are free from manipulation, not volatility. Volatility is a natural part of markets.”
Manipulation has been an entrenched part of crypto since inception, and it’s only in the past year that serious effort has been made by regulators to uproot it. In the past week, the FBI arrested the CEO of AriseBank, Jared Rice Sr, for lying to investors and raising over $4M in a scam business, and Airfox, one of the companies that settled with the SEC for selling unregistered securities in its ICO, is now pulling together a rescission document. With a rescission, investors in an ICO can receive a refund plus interest. Read more about recessions in Howard’s blog from last March.
What’s Happening In the News
Despite its dismissal of blockchain last year, Amazon is now launching a blockchain product for AWS: the Amazon Quantum Ledger Database.
At Consensus: Invest, Jeff Sprecher, the Chairman of the New York Stock Exchange, stated his belief that digital assets will be here for the long haul and that Bitcoin will continue to be the benchmark by which others are measured. “Somehow Bitcoin has lived in a swamp and survived. There are thousands of other tokens that you could argue are better, but yet Bitcoin continues to survive, thrive and attract attention.”
Music producer DJ Khaled and boxer Floyd Mayweather were both fined by the SEC for illegally promoting an ICO for Centra Tech.
Articles We Read (And You Should Too)
When Marco Polo returned from his travels to the East, his stories of paper money in China were discredited in Europe. Who would use slips of paper to represent value? The slow adoption of paper money mirrors the skepticism with cryptocurrencies today. Joe Lubin, a co-founder of Ethereum, walks us through the public’s skepticism with crypto and why it will change over time.
Looking to improve your ability to accurately value cryptoassets? Chris Burniske, a partner at Placeholder VC and a well-respected leader in the crypto community, dives into his model in his book Cryptoassets, but he gives a thorough overview of it in this Medium post.