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Last week, blockchain analysis firm, Chainalysis, held its annual conference, Links 2023, in New York City, where private and public sector leaders met to discuss emerging issues impacting the blockchain, cryptocurrency, and digital asset space. The conference featured presentations from notable public and private sector leaders, including government regulators, enforcement bodies who investigate and assist in prosecuting virtual asset fraud, and executives from financial institutions.

Throughout the conference similar themes of concern impacting the cryptocurrency space emerged, including:

A highlight of the conference was a fireside chat with Christy Goldsmith Romero, a Commissioner of the Commodity Futures Trading Commission (the CFTC). Speaking just weeks after the CFTC filed a civil enforcement action against Binance Holdings and its CEO and former Chief Compliance Officer, Commissioner Romero spoke of the CFTCs mission as it relates to cryptocurrency, which is focused on ensuring that there are guardrails in place to prevent illicit and fraudulent financial activity as well as to protect consumers who are active in the digital world.

Given the apparent uncertainty of regulatory authority over the cryptocurrency space in the United States, Commissioner Romero commented on the relationship between the CTFC and the United States Securities and Exchange Commission (SEC), the two major U.S. regulatory bodies which have been tapped to potentially lead the efforts of regulatory oversight in this space. Commissioner Romero stressed that both the CFTC and the SEC have the same client the U.S. government and that the multiple regulators, including state regulators, in this space are working together to fulfill their shared mission of protecting U.S. consumers, and ensuring that theres market integrity in this space as it continues to grow.

Commissioner Romero also commented that cryptocurrency is still a fairly new, and emerging industry that is evolving incredibly quickly. She noted that regulators are focused on resolving issues as they emerge, while also discussing ways to regulate and control issues before they arise. Each and all of these efforts will take time.

Commissioner Romero also described the CFTCs priority areas in the cryptocurrency space:

Finally, Commissioner Romero stressed that it is no longer sufficient to manage cyber risks cyber risks need to be eliminated in order to ensure consumer protection. She explained that the goal is to grow the industry as a safe ecosystem, and that the primary way to achieve this goal is for regulators in the industry to put customers first. The inevitable conclusion from these remarks is that we can expect greater regulation for the crypto industry.

Epstein Becker & Green, P.C. will monitor developments as the blockchain, cryptocurrency and digital asset space continues to evolve.

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Emerging Issues Affecting Blockchain and Cryptocurrency | Epstein ... - JD Supra