Vinny Lingham at TOKEN2049: If cryptocurrency doesn’t self-regulate, governments will
Vinny Lingham tackles dumb money and half-baked tokenization projects which are attracting government scrutiny and can possibly lead to stifling regulation.
Last week’s TOKEN2049 put the ICO frenzy into the spotlight: it seems everyone is launching an ICO. Whether each token has technical and economic merits may be debatable, but it’s quite plain for anyone to see that things are going out of hand.
Civic CEO Vinny Lingham spoke at the TOKEN2049 conference in Hong Kong last week, focusing particularly on governance in the blockchain sphere. He added that if the cryptocurrency industry wants to retain as much of its freedom as possible, it would need to “self-regulate” and construct its own code of conduct. Otherwise, governments will step in and may impose stricter regulations than most would be comfortable with, which could potentially impede innovation.
“The crypto sector will need to begin self-regulating due to a number of incidents that have caused concern recently, otherwise governments will impose stricter regulations,” Lingham said, summarizing the point in his presentation by saying “industries that don’t self-regulate get regulated.”
.@VinnyLingham at #Token2049: "The crypto sector will need to begin self-regulating due to a number of incidents that have caused concern recently, otherwise governments will impose stricter regulations" https://t.co/1fWoC2ppeT pic.twitter.com/ClQPdgFjZQ
— Civic (@civickey) March 28, 2018
“If you look at history, if industries that don’t self-regulate in the sense that the business leaders don’t come together and argue for a code of conduct and a code of practices that becomes uniform across the industry, regulators get involved,” Lingham said.
Citing recent events such as the rise of scams, Lingham says government concern is not unfounded. These days, there are more ICOs than people can imagine, and there’s a lot of “dumb money” pouring into the space as misinformed people jump into investments without knowing full well what the risks are. Many cannot distinguish between legitimate projects and outright scams, despite obvious signs. Some even invest despite barefaced admissions by the project founders themselves that they are indeed, running a scam.
“These people don’t know better so now regulators are stepping up and saying we must protect people. This industry as it is emerging has got a lot of bad actors in it,” said Lingham. “There are things we can do around that as well in order to prevent too much regulation.”
“Token economy design is an important part of what you’re doing. Don’t take the money here and then worry about how you can make it work later on,” he asserted.