A decade into the cryptocurrency revolution, the digital currency’s future is awash with questions from regulation and enforcement to exactly what type of asset they are to the impact of volatility in market values.
Against this backdrop, Foley & Lardner LLP surveyed a range of executives and investors to gauge their views on the use, risks and regulation of cryptocurrencies. One key theme to emerge was that despite strong libertarian views that permeate the cryptocurrency industry, the majority of those surveyed see the value of thoughtful regulation. Most respondents (84%) believe initial offerings of cryptocurrencies should be regulated in the United States. In addition, 68% want regulations for ongoing purchases and sales of cryptocurrencies, and 55% say it’s needed when it comes to paying for goods and services.
The survey also found respondents navigating an unclear legal environment. Nearly three-quarters (72%) say that the cryptocurrency industry does not have a well-grounded understanding of the application of existing regulation of financial markets or financial services. Their uncertainty is understandable as federal regulators have asserted their grounds for regulating aspects of cryptocurrency activities, but sent some mixed messages in the process. However, a recent speech by SEC Division of Corporation Finance Director William Hinman provided valuable insight into factors that could persuade the SEC that a particular token offering is, or is not, a securities offering.
Additional key findings that emerged from Foley’s research include:
For more information and to download the 2018 Cryptocurrency Survey report, please click here.
Patrick Daugherty, Kathryn Trkla and Allison Charney are partners at Foley & Lardner LLP and members of the firm’s Blockchain Task Force, which advises established and startup businesses on the full range of issues arising in the cryptocurrency space. Practitioners from multiple legal disciplines counsel clients on such issues as initial coin offerings and blockchain fund formation; investing in cryptocurrency; use of distributed ledger platforms for trading of cryptocurrencies and other instruments; and the proper regulatory classification of these transactions.