Bear with me, even if you find this question boring (this won\u2019t be).<\/p>\n
What we\u2019re talking about is\u00a0securities law<\/strong>, and how the U.S. Securities and Exchange Commission should regulate bitcoin, cryptocurrencies, and other blockchain assets.<\/p>\n The argument goes like this: when the SEC tells us how to think about blockchain assets, then the big institutional investors will come on board\u2014and that will open up the floodgates of investment.<\/p>\n The SEC, meanwhile, has a difficult job. If they regulate too quickly, it could stifle innovation. The government took a\u00a0light touch\u00a0<\/strong>toward regulating the Internet in the early days, and that allowed a thousand flowers to bloom. Sometimes it\u2019s better to \u201cwait and see.\u201d<\/p>\n And so the industry waits, holding its breath.<\/p>\n But isn\u2019t it ironic that blockchain is the decentralized technology\u2014the technology of the people\u2014and we\u2019re waiting on permission from a centralized government agency? Shouldn\u2019t we be leading the SEC, not the other way around?<\/p>\n I recently hosted the Investor\u2019s Stage at\u00a0Blockchain Expo<\/a>\u00a0in Silicon Valley, and I had a terrific panel of blockchain investors and VCs. I asked them a question that\u00a0flipped the script\u00a0<\/strong>on this whole impasse.<\/p>\n Here\u2019s the question I asked:\u00a0What is one meaningful change the SEC can make for blockchain investing?<\/em><\/p>\n Instead of being\u00a0reactive<\/em>to every scrap of gossip or hearsay from the SEC, this lets us be\u00a0proactive\u00a0<\/em>in helping out this important government agency.<\/p>\n Remember: the job of the SEC is to protect investors. How can they best do this with a decentralized technology that allows anyone to invest?<\/p>\n What are\u00a0your\u00a0<\/em>ideas?<\/p>\n When I asked this question of my panel, Rob Nance of\u00a0CityBlock Capital<\/a> had a terrific idea: why doesn\u2019t the SEC create a kind of \u201ccertification\u201d that requires investors to go through training?<\/p>\n It was Rob\u2019s idea, but I\u2019m running with it. Hear me out.<\/p>\n Today, most blockchain investments are limited to \u201caccredited investors<\/a>,\u201d which means you make over $200,000, or you have a net worth of at least $1 million (your house doesn\u2019t count). The argument goes that the rich can afford to make riskier investments\u2014and besides, they know what they\u2019re doing.<\/p>\n There\u2019s widespread agreement that this rule is arbitrary. If you make $190,000, you are incapable of managing money, but as soon as you hit $200,000, you are now imbued with magical investing powers?<\/p>\n It seems silly that investors have to pass the \u201caccreditation\u201d test to spend their own money, when anyone can walk into a casino and gamble away their life savings. You can literally \u201cinvest\u201d all your money on scratch tickets at a gas station\u2014no accreditation needed!<\/p>\n Imagine if the SEC created an investor training program that would allow investors to become \u201ccertified\u201d or \u201clicensed\u201d to these more complicated investments. Think about a driver\u2019s license, which is a rigorous way of ensuring the safety of everyone on the road.<\/p>\n Put another way, imagine that\u00a0certification replaces accreditation<\/strong>. \u201cCertified investors\u201d instead of \u201caccredited investors,\u201d with certification open to all.<\/p>\n The model already exists: investment advisors, broker-dealers, and other financial industry professionals must first obtain\u00a0financial securities licenses<\/a>. Why can\u2019t we have a license for the general public?<\/p>\n Call it\u00a0investor certification (open to all)<\/strong>.<\/p>\n This idea would greatly serve the public good:<\/p>\n There\u2019s even an SEC division, the\u00a0Office of Investor Education and Advocacy<\/a>, that could spearhead this initiative. And for our part, we\u2019d be happy to help.<\/p>\n To summarize: Get rid of investor accreditation (available only to the rich), and create investor certification (available to all).<\/p>\n Why are we sitting on the sidelines? Let\u2019s show some hustle. Let\u2019s get ideas that the SEC can use to help the blockchain industry grow and thrive.<\/p>\n We welcome your ideas on the government regulation of blockchain: just\u00a0drop us a line<\/a>. And\u00a0subscribe to our weekly investor briefing for<\/a>\u00a0more ideas from the smartest minds in blockchain.<\/p>\n","protected":false},"excerpt":{"rendered":" A year ago, do you remember how jazzed everyone was about blockchain? Blockchain was going to end world poverty! It was going to revolutionize investing! Blockchain would cure the common cold! It would get us to Mars! I still hold that kind of optimism. Problem is, the conversation this year has been dominated by one… Read More…<\/a><\/span><\/p>\n","protected":false},"author":2,"featured_media":13750,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[459],"tags":[],"_links":{"self":[{"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/posts\/13749"}],"collection":[{"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/comments?post=13749"}],"version-history":[{"count":5,"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/posts\/13749\/revisions"}],"predecessor-version":[{"id":13756,"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/posts\/13749\/revisions\/13756"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/media\/13750"}],"wp:attachment":[{"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/media?parent=13749"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/categories?post=13749"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/tags?post=13749"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\n![\"\"](\"http:\/\/mediashower.com\/blog\/wp-content\/uploads\/2018\/12\/hedpay-e1544450542373.png\" "\\"hedpay\\"")
\n<\/center><\/p>\nThe Question That Will Let Blockchain Move Forward<\/h2>\n
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One Solution: Investor Certification<\/h2>\n
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Wanted: More Ideas for the SEC<\/h2>\n