The Crypto Conversation

A short post this week – mainly to give a shout out to my colleague, Andy Pickering, and the rest of the team at Brave New Coin. Andy kindly invited me to help celebrate the 250th edition of The Crypto Conversation, his regular podcast that has featured a pantheon of leading characters from the crypto and blockchain industry. On this recent edition, we talk about my journey into crypto, the highs (and lows) after six years in the industry, some aspects of “trust”, the usual Crypto Conversation “Hot Takes” and of course, a slightly contentious discussion on science fiction. Enjoy.

Listen here:

Spotify

Apple

Libsyn

Next week: The bells, the bells….

 

Ask an expert…

I’m often approached for advice about the work I do. Many of these enquiries come via LinkedIn connection requests, but generally they are thinly-veiled attempts to sell me something, or to gain access to my network, or to get free consulting. So I have developed a number of techniques to flush out the bona fide from the free-loaders.

In principle, I like to pay it forward when I can, where I believe I can add value, without any immediate expectation of material reward. But there are only so many hours in a day, and there’s only so many connection requests I can handle.

On the positive side, recently I’ve been receiving more genuine approaches, where specific expertise is being sought, rather than someone wanting to “connect” or “buy me a coffee”.

A great example is the call I received from a prospective client through my work at Brave New Coin. Dr Michael Kollo is the CEO of Clanz, a new on-line community for crypto traders. Following this initial chat, Michael invited me to be a guest on his podcast, to discuss my personal journey into crypto over the past 6 years with Brave New Coin and Techemy.

The result was a very enjoyable (but hopefully informative) conversation about my views on the crypto industry, based on my particular perspective in market data and indexing. I hope you enjoy it too:

https://blog.clanz.com/crypto-cappuccino-s01e01-rory-manchee-brave-new-coin

Next week: Vinyl on the brain

Crypto Regulation in Australia

You wait ages for a bus, then several come along at the same time. The past week has seen three major developments in Australia regarding the regulation of cryptocurrencies, digital assets and the industry in which they operate.

First, there was the Final Report of the Senate Select Committee on Australia as a Technological and Financial Centre. Among other things, the Committee has recommended a specific regulatory framework for Digital Currency Exchanges, a formal custody regime for digital assets, a classification (or “token mapping exercise”) for the various types of digital assets, and a legal framework to recognize Decentralised Autonomous Organisations as a form or company structure.

Second, AUSTRAC issued a Statement on De-banking, that urges banks and financial institutions to take a case-by-case approach when reviewing potential risks associated with clients engaged in Blockchain and cryptocurrencies. Rather than applying a blanket ban or refusal to deal with Blockchain and crypto businesses, banks and other providers should exercise more discretion, and adopt workable and practical solutions to meet their risk management and KYC/AML obligations. Echoing the overarching theme of the Senate Select Committee, AUSTRAC recognises that de-banking crypto risks stifling innovation, and/or forcing crypto businesses to resort to less than ideal alternative service providers.

Third, ASIC released its Response to submissions made under the recent consultation on Crypto-assets as underlying assets for ETPs (aka Report 705 on CP 343). While there is some overlap with the scope and terms of reference of the Senate Select Committee, ASIC maintains its position that it does not want to be responsible for developing policy on regulating digital assets (that’s the role of Government); while at the same time stating in very clear terms how it believes cryptocurrencies should or shouldn’t be classified (and regulated). For example, ASIC did not accept the view of many respondents that crypto-assets which are not deemed financial products should be treated as commodities. In part, because there is no definition of “commodity” in the Corporations Act; but also because the discussion has been more about market operators, rather than the specific nature of the assets themselves.

Meanwhile, ASIC remains very prescriptive about the criteria for approving certain cryptocurrencies as the underlying assets for exchange traded products (ETPs) – including criteria which received push back from the industry as being too restrictive or inflexible. On the other hand, ASIC does appear to accept that if crypto-assets cannot be defined as financial products (or commodities), then a distinct category is required. This is the case that has often been put forward by the industry, namely the need to define instruments commonly known as utility tokens. To its credit, ASIC has made a fair stab at coming up with a workable definition of crypto-asset as:

“a digital representation of value or rights (including rights to property), the ownership of which is evidenced cryptographically and that is held and transferred electronically by:
(a) a type of distributed ledger technology; or
(b) another distributed cryptographically verifiable data structure.”

While the overall tone of these developments is encouraging, they still reveal a need for greater consistency (and inter-agency co-ordination), and the lack of a well-articulated policy on this fast-growing FinTech sector.

Next week: Is crypto finally going mainstream?

 

Blockchain Start-up Showcase

As part of the recent Australian Blockchain Week, YBF Ventures hosted a showcase of Blockchain start-ups – not a standard pitch event, but more an opportunity to hear how some teams are deploying Blockchain technology in their projects.

Here are the projects in order of presentation (links in the project names):

ProvenDB – developing immutable and tamper-proof document management, built on Hedera Hashgraph

BuildSort – a construction contract management solution to improve the industry supply chain and project management

Laava ID – product authentication via “smart fingerprints”

Verida – decentralized identity (with a focus on health records) – a user-centric solution focused on building user trust – resulting in hyper-personalisation

Cryptocate – crypto tax management service – with the growth in DeFi, there is a lack of data standardization or formal tax guidance on taxable events – e.g., how to handle crypto options?

Elbaite – a non-custody exchange using a “TraderTrust” verification system to support P2P transactions – platform confirms the exchange transaction on-chain, then the platform uses the transaction hash to release clients’ fiat funds from escrow – platform charges fees and commission

Sempo – a remittance service, with a particular focus on supporting migrant workers, the unbanked and refugees

Future CX – decentralized middle-ware development – e.g., data containers, NFTs, smart contracts – using a “proof of distribution” model

Luca+ – e-invoicing solution that integrates with major third-party accounting software

BC Gateways – using Blockchain to facilitate secure data transfer within the superannuation industry – recently acquired by IRESS – scaling from 10k transactions per day to 5m per annum

DayByDay – an asset management solution for the insurance industry

Get Paid in Bitcoin – a Bitcoin payroll and savings account

DLTX – a smart contract development vendor

Next week: Decay Music