Frustration and optimism over the state of the global crypto regulatory environment provided the key focus for discussion at this year’s TOKEN2049 Singapore Conference, which took place last week. A rather more subdued event than last year, it still attracted a sold-out crowd of 10,000, a full hall of exhibitors and 400 side events curated by event sponsors, exhibitors and Singapore’s web3 community groups. 

“Can I get a ‘fire Gary Gensler’ from the crowd?”

— Balaji Srinivasin

 On 12 September, Gary Gensler, Chairman of the U.S. Securities and Exchange Commission (SEC), provided testimony to the Senate Committee on Banking, Housing, and Urban Affairs. In spite of the SEC’s recent legal defeat in its drawn-out case against Ripple, in which judges determined that Ripple’s native token XRP is not a security (and therefore could not breach U.S. securities law as the SEC claimed), Gensler remained defiant in his anti-crypto stance, stating at the hearing that “with the industry’s wide-ranging noncompliance with the securities laws, it’s not surprising that we’ve seen many problems in these markets.” 

CEO of Ripple, Brad Garlinghouse was on the opening panel of TOKEN2049 alongside Hong Fang (President, OKX), Mike Belshe (CEO, Bitgo) and moderated by Bloomberg’s Annabelle Droulers. 

Garlinghouse said he feels optimistic that the law is working, evidenced by judges not only ruling against Federal agencies despite the pressure, but even going so far as to accuse the SEC of being ‘arbitrary and capricious’ in their Grayscale case ruling.

Garlinghouse said if the aim of the crypto industry is to “fundamentally rewire how financial infrastructure works…we can’t pretend that government regulation doesn’t matter.” Yet he also added that unlike Singapore, the UK, Dubai and Switzerland where “smart policy is driving innovation,” the SEC is using the “confusion to give themselves power, and using their unlimited legal budget to just file more lawsuits.” The SEC has since requested to file a motion of appeal to challenge the ruling. Ripple has spent over $100 million fighting this case to date and has vowed to continue should the appeal motion be granted. 

“We want to make sure that dollar stablecoins are are well regulated and that the use of dollar stablecoins are well defined by different regulators around the world”

— Jeremy Allaire

In an interview with Jeremy Allaire, CEO of Circle, Bloomberg’s Haslinda Amin challenged him on the Grayscale case and whether he thought it showed overreach by the regulator. “One of the really interesting things about what's happening in the policy process in the U.S. is that over and over the courts are saying, ‘there's a process by which we decide how to regulate these things,’” Allaire said. “And that's the process of new legislation.”  

Referring to the Clarity for Payments Stablecoin Act which is currently making its way through Congress, he said that we're entering a period where we're going to have legal certainty for stablecoins as an integrated part of the global financial system. 

Pressing him on whether Circle’s bullish growth in Asia is indicative that the U.S. is lagging on stablecoins, comparative to markets like Singapore, Hong Kong and Korea, Allaire responded, “I'm not so sure it's Asia versus the U.S. or the West situation. I think we're seeing progress happening simultaneously all around the world.” He said Japan and Europe are also progressing well on stablecoins. 

“It’s as if the SEC has really given up. They don’t actually have the vision on how to regulate the future. So they’re just trying to basically slow down the future or stop it via regulation through enforcement ”

— Cameron Winklevoss

Of all the sessions at TOKEN2049, I found the conversation with the Winklevoss twins the most exciting. Credit to Balaji Srinivasan of The Network State fame, for steering the session and enabling some “real talk” on the U.S. vs the rest of the world. 

For those old enough in the crowd, the mythology surrounding the Winklevoss twins and their early tussle with Mark Zuckerberg was a compelling enough reason to be in the room. After getting their $65 million legal payout from the Zuck related to the founding of Facebook, they went on to invest a sum in Bitcoin, reject web2 which they referred to as a “dystopian hellscape of five companies,” and in 2014 co-founded crypto exchange Gemini. They secured an investment round of $400 million in late 2021 to value the company at $7.1 billion. And boy, they really are identical! My notes on the session start with, “Tyler grey shirt, Cameron pink shirt.” 

While highlighting progressive crypto jurisdictions at the U.S. state level, including Florida, Wyoming and Texas, the brothers didn’t pull any punches in expressing their disappointment with the SEC. Cameron Winklevoss said, “It's not about capital formation, investor protection, innovation, the consumer. None of that dialogue. It's all about a political Game of Thrones in the swamp of DC, which is really sad.” 

Tyler Winklevoss pointed to an arrogance and complacency in the U.S. that is keeping it pointed inwards, while exciting developments in web3 are happening in other parts of the world, particularly in Asia Pacific. “The U.S. has gotten really complacent, assuming that because they won web1 and web2, that of course, it's the U.S. that’s gonna win web3. But not so fast.”  

Harking back to the ideological values of the original Internet, Cameron added, “we took web1 for granted. And now we don't, and we're trying to actually put those values into encryption, into code and protect them.” 

On Asia, Tyler Winklevoss said, “We think this is the growth of Gemini. We're not leaving the U.S. APAC and other regions are really going to be where we're going to grow over the next couple of years. So that's why we're excited to be here.”

TOKEN2049 announced it will be launching a Dubai edition in April next year. 

Lead image: L-R. Balaji Srinivasan, Tyler Winklevoss, Cameron Winklevoss