- By Pierre-Alexandre
May 14th, 2019
The much-awaited Consensus 2019 conference kicked-off on Monday, May 13th, providing highlights to the developments taking place in-and-around the crypto sector. So without wasting our time let’s head straight to the important announcements of Day 1.
SEC Commissioners Hester Pierce Backs Crypto Innovation
Popularly known as “crypto mom” for her positive stand on the growth of the crypto industry, SEC Commissioner Hester Pierce expressed her concern on meaningful and slow regulatory development in the U.S.
She stressed that the regulators should engage in a meaningful dialogue with the crypto community to ensure positive development in the blockchain and crypto sector. She stated that the U.S. is falling behind other countries in developing a strong regulatory framework:
Commissioner Hester Pierce: "There is a lot of excitement, enthusiasm and hard work here in the U.S. What is depressing to me: our country has always been the place where innovation can really thrive, and now a lot of the activities is happening offshore." #Consensus2019— Anna Baydakova (@baidakova) May 13, 2019
Great panel discussion of the challenge for US regulators (Congress) to keep up with Blockchain Innovation. Much real worry that EU, Japan, Korea & even China are much further advanced. #consensus2019 @PerianneDC @DigitalChamber @tomemmer @mikejcasey pic.twitter.com/3qxMIOfb3o— Jason Potts (@profjasonpotts) May 13, 2019
When asked about the right time to introduce a Bitcoin ETF, Pierce said that it was last year. Although she added that along with regulators the crypto industry players need to answer certain questions involving the market manipulation concerns.
.@ChrisBrummerDr : "Do you think the time is right [to launch an ETF]?" @HesterPeirce: "I thought the time was right a year ago ... but there's still questions that need to be answered by you [the audience]."— Nikhilesh De (@nikhileshde) May 13, 2019
Cites market manipulation concerns as one example #Consensus2019
She also said that the crypto community should engage in educating the SEC about the developments in the industry, in the right sense.
Watching @HesterPeirce at #Consensus2019— Tradecipher (@TradecipherTeam) May 13, 2019
She says she hopes the crypto community will "be aware of what the SEC is putting out there, and weigh in to educate us"#btc #crypto #Bitcoin #cryptocurrency #SEC pic.twitter.com/87v7L4fse9
Exchanges Conducting IEOs Can Face Legal Risks
SEC’s senior advisor for digital assets and innovation - Valerie Szczepanik - said that crypto trading platforms issuing digital tokens through Initial Exchange Offerings (IEOs) can be subjected to U.S. securities laws.
The SEC official said that crypto exchange that facilitate token sales for a fee will fall under the legal definition of securities dealer if the issuer or the buyers are based in the U.S.
Szczepanik states that the exchanges need to comply with the licensing and registration requirements for broker-dealers, national securities exchanges, as well as alternative trading systems (ATS).
Speaking to a Bloomberg reporter Matthew Leising, Szczepanik added: “Platforms seeking to list these tokens for a listing fee or bring buyers to the table for issuers are probably engaging in broker-dealer activity. If they are not registered they will find themselves in trouble in the U.S., if they have a U.S. issuer or U.S. buyers, if they are operating on the U.S. market.”
Tor Makes It Easy to Setup Bitcoin and Lightning Nodes
Bitcoin startup Casa finds that its privacy network Tor can help users to quickly and easily set up Bitcoin and Lightning nodes.
Jameson Lopp, the Chief Technical Officer at Casa says that its product offers a plug-and-play feature for setting up the Bitcoin and lightning node thereby making it easier for users to run the software. Users usually funnel their node network traffic through the Tor network as it helps to shield the IP address of the node and further enhance the privacy.
Lopp said that the Tor network helps users to solve major networking issues while setting up the Casa full node. It makes things much simpler than using the “port forwarding” method, however, the only downside is users need to get a Tor browser.
Enterprise Ethereum Alliance (EEA) Introduces New Client Specs
At the Consensus 2019 conference, the Enterprise Ethereum Alliance (EEA) released the third version of its client specifications along with additional updates on performance and privacy.
The EEA is a consortium of over 500 reputed companies including giants like Microsoft, Intel, IBM, EY, and other major players across the finance, tech, and blockchain industry.
EEA chairman John Whelan states that the new client specification majorly caters to using off-chain transactions as well as the three P’s crucial to enterprise use of Ethereum: permissioning, performance and privacy demands.
Speaking to CoinDesk, Whelan said: “We have gone through three iterations of the spec now and the idea is to really get us to a point where ethereum software designed for use in the enterprise that meets that spec can legitimately claim to be enterprise ready, whether that’s a bank, a telco, an energy company, a logistics company – you name it.”
Whelan further added that the EEA doesn’t work with the approach of “one size fits all”. Instead, it focuses on interoperability with other software. He said that for instance, EEA uses different methods to attain privacy.
Whelan stated: “You can keep data off-chain or you can encrypt data on-chain, and this particular EEA specification caters to both forms of privacy, off-chain and on-chain privacy as being suitable. It’s not a question of one or the other; you can choose to implement both if you are an enterprise ethereum vendor.”
Nivaura’s Blockchain-Based Floating Rate Bond
Nivuara, a capital markets startup has developed “the first commercially viable floating rate bond using blockchain technology”. Spanish banking giant Banco Santander, the London Stock Exchange Group (LSEG) and LeasePlan.
Avtar Sehra, CEO of Nivaura, also spoke about the tokenized equity and bond models and new investment instruments for their clients. Sehra said:
“We are extending the simple tokenized equity and bond models to include more interesting hybrid and structured instruments that would be more useful for our clients and partners. A natural extension of this is to ensure that the interest is not just simple fixed-rate coupons, but has the flexibility to be a floating value depending on some external reference rate.”
Sehra further stated that tokenized securities have got two parts. The first is the token registration or the smart contract part that creates financial instruments on the blockchain like Ethereum. The other is the transfer of tokens from one party to another which is in accordance with the AML/KYC whitelisting process.