59 – Crypto’s regulatory catch-up with Marc Boiron

A blockchain attorney discusses the regulation of the crypto space

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Episode Description

Crypto has disrupted just about every field of financial law in the last few years. Regulators are playing catch-up in attempt to regulate this new industry. This is especially concerning as a conglomeration of large corporations, including Facebook, have announced their intentions to launch their own currency, Libra.

Today’s guest, Marc Boiron, is up-to-speed. As a partner at FisherBroyles, he represents some of the leading blockchain and crypto companies. On today’s episode, Boiron and Luke Scorziell go in-depth on the regulatory side of crypto. From covering Facebook’s new cryptocurrency to catching criminals with blockchain to discussing the end of fiat currencies, they cover it all.

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Brief Show Notes

Marc’s decision to enter crypto

“Near obsession with blockchain”

Boiron is a blockchain fanatic, according to his bio. Over the last several years, Boiron has leaned heavily into combining his experience in law and love for blockchain and crypto. As a partner at FisherBroyles, Boiron represents some of the most prominent blockchain companies and leaders.

But he didn’t start out as a blockchain lawyer. In 2017, he describes listening to a speaker who said you should really be doing what you love. He says initially he thought it was BS, but then his thinking changed.

“I said that’s just BS,” Boiron says. “But then it kind of hit me, and I was like you know what, that actually makes a lot of sense.” So, he decided to just go for it and dive into blockchain.

Key Quotes

“Once you start looking at the technology every time you have an unanswered question you dive deeper and get five more unanswered questions, until finally you start narrowing the number of unanswered questions you get to, you start realizing just how much of a game-changer the technology is. ”
~ Marc Boiron

“I’ve always said I’m willing to bet my practice on blockchain being something that will be important in the legal world and other things.”
~ Marc Boiron

Explaining crypto

Currencies or investments?

In an oxymoronic way, Boiron says most people in the industry don’t believe most cryptocurrencies act as currencies. Many crypto networks, or coins, had much more limited purposes than a traditional currency.

For example, a coin might give a customer a discount at a certain website or company, buy may not have a lot of use outside of that purpose. “But even a discount can get more valuable if more and more people want that discount,” says Boiron.

Key Quotes

“I think most people in the industry wouldn’t think of most cryptocurrencies as currencies.”
~ Marc Boiron

“The way I always think about cryptocurrencies is really to think of it as being literally anything somebody wants it to be.” ~ Marc Boiron

Are they anonymous?

Many people believe cryptocurrencies provide an anonymous means of transacting currency. Boiron says this is simply not true. The reason is that blockchain, the underlying technology for many cryptocurrencies, keeps a ledger of every transaction someone has ever made.

Although that ledger may not initially be traceable to someone, when the cryptocurrency is converted back to fiat currency, or vice-versa, the actor loses their anonymity. Boiron says this is very important to know.

Key Quotes

“A lot of people think of bitcoin as being anonymous, and it’s really not. It’s pseudo-anonymous. It’s actually one of the easiest way to track criminals because you literally have a ledger that is going to walk people through every transaction.”
~ Marc Boiron

The Libra Association

What is it?

Facebook will soon be announcing their own cryptocurrency, names Libra. The currency will be controlled by the Libra Association, which currently includes Facebook and 19 other companies and is expected to eventually include 100 companies.

Even though Facebook will only have one vote, equal to the other partners’ votes, many have expressed privacy concerns, including congressional leaders. However, Marc is not totally concerned since Facebook will not be the sole operator of Libra.

Key Quotes

“Do I have concerns over a cryptocurrency that is controlled by 100 large companies the same way I would if it was truly controlled by Facebook? Not even close.”
~ Marc Boiron

“It’s going to create a very necessary currency as an alternative to the USD that people outside the US, especially in developing countries, could really use and trust. This is probably a good thing.”
~ Marc Boiron

Regulating the crypto industry

From 2017 to 2018, billions of dollars were raised in initial coin offerings. Unfortunately for many investors, most of those ICOs were scams, and the companies went under or disappeared shortly after taking the money.

Three Buckets

Boiron describes three motivations for ICOs:

An opportunity to scam people
An opportunity to raise a ton of money
An opportunity to use the ICO model correctly to do something that has never been done before

Key Quotes

“Here’s an opportunity to use a coin in a blockchain network that is going to end up being really useful and allow us to do something we couldn’t do ever before.” ~ Marc Boiron

Regulation issues

Crypto regulation gets tricky quickly. Aside from many ICOs coming from international companies, cryptocurrencies touch on almost any area of law you could think of. Additionally, the technology and way of doing things changed rapidly.

By the beginning of 2018, the SEC (Securities and Exchange Commission) finally begun to catch up with the cryptocurrencies. They started sending out subpoenas to certain companies and, as a result, freaked everyone out, says Boiron, and slowed down the trading.

Key Quotes

“Cryptocurrencies touch on securities laws, commodities laws, money transmitter laws, consumer laws, banking laws, there are a lot of different laws that it touches on. That coordination makes it extremely difficult.”
~ Marc Boiron

“Most of the time…the CFTC just didn’t even have jurisdiction to do anything, except for fraud. The problem is when your jurisdiction is so limited to just fraud, it’s really hard to have a pulse on what’s going on in the industry and actually spot the fraud.”
~ Marc Boiron

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Bills with Luke Scorziell does not provide investment, tax, or legal advice or recommendations. This material is solely intended for educational purposes based on publicly available information and may change at any time. Additionally, this article’s content is a summary of the Interviewee’s comments and, while rephrased by the Author, are not from the Author himself.

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About Luke Scorziell

Mr. Scorziell created The Edge of Ideas when he was 15 years old. After a few years of blogging he found a passion for podcasting and now regularly has guests on his show, Bills with Luke Scorziell. He currently writes for USC Annenberg Media and produces a weekly segment on Annenberg Radio News called “Politicking.” You can find more of his work here. Find out more about Luke and his unique journey. Feel free to send Luke a message below.