How a Crypto-Gov Weekend Helped Greet the Regulation Elephant in the Room
In April this year, Mark Zuckerberg took to the stand in front of the US Supreme Court. He testified on behalf of Facebook about the company’s role in the Cambridge Analytica scandal, breaching user privacy to run targeted political advertisements. While the need for his testimony was entirely justified in light of the allegations, many reports afterward focused on the almost comic awkwardness of some of the exchanges.
For example, Zuckerberg found himself in the uncomfortable position of explaining to Senator Orrin Hatch that Facebook was a free-to-use service precisely because the company is funded through advertising. Senator Lindsay Graham’s questioning seemed to target the issue of whether Facebook was a monopoly.
The (Dis)advantages of Formal Collaboration
The Zuckerberg testimony was a high-profile example, but it illustrates a problem that occurs when regulators intervene in technology. Regulators need to seek out expertise from the technology community, to gather the information they need to make their decision. Depending on the parties involved, these meetings could be fairly informal or they could, like Zuckerberg’s testimony, be a collision of different worlds.
On the one hand, there is the community developing and advocating for the new technology, often seen as younger, more open-minded and dynamic. On the other, there are those holding the more traditional, less edgy role of regulators and policymakers, who may only have a limited understanding of the technology under discussion.
Cryptocurrencies have recently become a hot topic for financial regulators. Earlier this year in Israel, policymakers were grappling with the question of whether crypto-assets should be classed as securities or not. The Israeli Securities Authority (ISA) issued a draft guideline in March 2018 that clarified their position on the matter. It stated that only those tokens conferring ownership rights, similar to a traditional security, would attract the same treatment as securities. Pure utility tokens, as well as payment tokens including Bitcoin, wouldn’t be classed as securities.
The ISA guidance provides a clear outline for the status of ICO projects and leaves plenty of space for future developments. The crypto community in Israel mostly sees this as a positive step forward.
However, despite the fact that most people welcomed the guideline, it was a moderate achievement. Particularly in light of the significant effort that went into these discussions within the ISA. The proposal was the result of a long series of formal and semi-formal meetings and talks between the regulators, representatives of leading cryptocurrency firms and leaders within the community.
While these talks were necessary, we at Crypto Academy wanted to do something that would stimulate a more lively discussion around this topic. Together with our colleagues at the Faculty of Governance at IDC, we started discussing how blockchain and cryptocurrency will impact on topics such as governance and national security in the future.
To us, it has become increasingly important to have an ongoing, meaningful dialogue and connection between the key regulatory officials and the blockchain and cryptocurrency community. At the same time, we wanted to stage a unique and purposeful event for the IDC school alumni.
The end result of was that we put together Crypto-Gov Weekend as a joint venture for Crypto Academy and the IDC. Over three days, we pulled together high-ranking officials such as UN Ambassador Ron Prosor and Former Head of General Security Services and Minister Yaakov Peri. They spoke alongside industry leaders such as iAngels Head of Partnerships Lilach Danewitz, Deloitte’s Head of Blockchain Hagai Zachor, and Yaniv Feldman, Co-founder and CEO at One Alpha. These are only a few names from our long list of speakers.
Crypto-Gov Weekend was comprised of a full weekend of lectures. The event started with the bare basics of blockchain technology and progressed through to more advanced concepts including the use of private blockchains and crypto-economics. We also held cross-disciplinary panels covering blockchain security and regulation, which you can watch on our Crypto-Gov Weekend YouTube channel if you speak Hebrew.
During the evening, we offered networking and socializing events, including activities like massages and costume cocktail parties to lighten the mood. Because we all know that networking often takes place after the main event. This was just what they needed. Many walked away feeling energized to continue the mission of introducing blockchain to their extended communities.
Building Communities from Disparate Groups
Blockchain and cryptocurrencies are often attractive to individuals who believe in creating a new world, or those who see the investment potential of crypto. Often, one person cares about both at the same time.
Government officials have different motivations, as they rightly should. They hold positions of power, and holding that power responsibly means acting as a guardian. They should protect the system and the welfare of people who gave them power. Of course, they take this role seriously.
However, bringing both parties together on neutral territory away from the desk job creates a different environment for discussion. Holding Crypto-Gov weekend outside of working time, in a relaxing resort surrounded by nature, sparked more natural and thought-provoking talks than a dry committee meeting ever could. People enjoyed themselves and had the opportunity to connect with others from around the world.
Our goal in creating Crypto Academy was to build a new environment for communication around the topics of cryptocurrency and blockchain. In creating Crypto-Gov Weekend, we rejected the assumption of any division being necessary between the vision of the blockchain community and governmental institutions.
By the end of the third day, our participants were bubbling with ideas and optimism. We heard a number of different conversations including the idea for a blockchain accelerator in the city of Herzelia, and the IDC university conceiving an experiment for a new governance token. Another group even developed a proposal for a new draft of law regarding cryptocurrencies.
We all need our desks and our laptops for getting things done in real life. However, humans are naturally social animals, and creating conversations around ideas can help to fuel ongoing development and progress. Putting people together and giving them the space to talk and energize each another is one thing we can do to encourage and cultivate these ideas.
Please accept our invitation to share your thoughts on new settings, ideas, and topics for meetings, workshops, and outcomes for the next Crypto-Gov Weekend in March 2019. Even better, please come and join us in person at the event itself. We look forward to hearing from you.