While the crypto winter has been a rough ride for much of the industry, Messari founder and CEO Ryan Selkis sees some austerity as healthy for events like mainnet.
Selkis, a crypto industry veteran who started in 2013, has seen improvements with each bear market as each has pushed some companies out of business and made room for survivors. This cyclical process coincided with a regulatory environment that has evolved over time and can simmer to boiling point in a bull market.
“Bear markets are good for getting the right people in the space,” Selkis said. “We wash away all the dead wood.”
While regulators performed at last year’s Mainnet conference in New York, this time they did so in a more collaborative manner, with an emphasis on education rather than enforcement. Their presence reflects a growing shift in the crypto space toward regulators working with corporations.
Selkis pointed out during a Interview with decrypt that several officials have been included as speakers at this year’s conference, including representatives from the Commodity Futures Trading Commission (CFTC) and the Department of Justice (DOJ).
“Those should be talks,” Selkis said, citing the ability to bring regulators on board. “For the most part, people seem to be on the same page when it comes to pushing more constructive solutions as opposed to the proverbial hammer looking for a nail.”
Selkis had a fireside chat with CFTC Commissioner Caroline Pham, during which the two discussed how regulation could help the crypto industry as clearer guidelines for businesses are developed and jurisdiction between the CFTC and the Securities and Exchange Commission is clarified.
In a separate panel, Selkis spoke with Sanjeev Bhasker, who works as US Digital Currency Counsel with the US Department of Justice’s Digital Currency Initiative. The panel discussed digital privacy in relation to the use of cryptocurrency.
It’s not the first time regulators have appeared on Messari mainnet. While their presence was expected this time, the appearance of SEC representatives shocked numerous conference-goers last year when they showed up unannounced with legal papers to be delivered.
A year ago the SEC served Do Kwon, co-founder of Terra Labs, with a subpoena at the conference. It was about Terra’s Mirror Protocol, a DeFi protocol that created synthetic versions of assets that could be traded, including stocks.
“Any time you have a group of people like this, [it’s] just the law of large numbers,” Selkis said. “There will be thousands of people here, some of them international – if some of them are investigated, [a subpoena] can happen from time to time.”
The matter occurred before the collapse of Terra’s UST stablecoin earlier this year, an event that wiped out billions of dollars in investor funds and rocked institutions that were making big bets on Terra’s network. including Three Arrows Capital, the now-defunct crypto hedge fund.
Selkis believes that regulatory conflicts will inevitably arise as developers “push the limits” of what is possible in the crypto space. He said, “Things break and people get in trouble — that’s really been the nature of crypto since day one.”