Despite the market’s up and downs, it would be foolish to dismiss Bitcoin, Ethereum, and Cryptocurrencies in general. Regardless of asset prices or SEC regulation, the underlying blockchain technology is unlike anything we’ve ever seen. According to Stephen Palley, a blockchain attorney with Anderson Kill, that will always be the case even if the prices stay down.
On top of this, Palley claims that the recent SEC regulation changes do not affect the recent market crash. This assertion goes against analyst declarations, but it isn’t a baseless claim.
“I’m not sure that there is necessarily any connection between recent SEC activity and the price of cryptocurrencies. It’s difficult for me to see a causal relationship,” said Palley in an interview with Bloomberg TV. The lawyer continued, stating that crypto is a global market. Digital assets aren’t only reliant on the United States, and securities laws differ across the world. SEC regulations do not inherently affect the whole world of crypto.
Palley is bullish on the future of crypto as well. “I would not write off bitcoin, and I would not write off Ethereum. These are very interesting technologies.” It’s safe to say that he truly believes this too, as his career is reliant on the success of the crypto space. That, and he thinks we should think longer term about the market. The current, smaller-scale ups and downs will have little to do with crypto’s long-term success.
Recently, the SEC went after and took down two cryptocurrency startups for hosting illegal ICOs. The two companies in question, Paragon and AirFox, were required to pay $350,000 in fines. They also had to refund any investors that put money into the ICO. Paragon had to pay $12 million and AirFox $15 million. It is somewhat believed that the SEC was after the crypto space due to these takedowns. Palley was asked about these claims, though he thinks little of them:
“I don’t know if the SEC is in the business of sending messages when it engages in enforcement activities or when it enters cease-and-desist orders with companies that have violated securities laws. The SEC, for some time, has made it clear that while [crypto] could be really nifty technology, securities laws still apply.”
A Private Message
The SEC has taken down multiple different crypto startups. In every case, the government agency has had good reasons for doing so. Assuming the shutdowns are “attacks” on the community is a tad rash.
Also, Palley calls out the crypto community for some of its actions. Just because securities laws aren’t up to snuff, that doesn’t mean they don’t apply to crypto. This is a new technology, and it must adhere to the laws established. If there was some message from the SEC, Palley believes it would be “we told you. Follow the law.
Palley also claims that the SEC movements have no bearing on ICO interest. He even recently received a call from someone in Europe regarding a new ICO:
“I don’t think that the interest [in ICOs] has gone away. There was this silly notion that you could raise money to build a business by selling something that would give someone access to the business that you’re building, and somehow you could get away with not complying with securities laws.”
Companies that think they can use ICOs to raise money and then not abide by these laws are wrong says, Palley. Those groups deserve to be taken down for not following the rules.
The lawyer’s crypto predictions are similar to that of Tom Lee from Fundstrat. Lee still believes Bitcoin will hit $15,000 this year:
“The next wave of adoption is institutional. There is a crossover happening. This is just an awkward transition.”