Cornell Prof. Sees New Blockchain Era Emergingbr>
A prominent blockchain and cryptocurrency expert says the US Securities and Exchanges Commission (SEC) decision to crack down on inital coin offerings may signal a new era for blockchain, having a chilling effect on the way business is currently conducted.
The SEC said earlier this week that initial coin offerings or token sales are subject to the requirements of federal securities laws. Many blockchain startups have bypassed the traditional venture capital and private equity paths to raise funds via initial coin offerings, wherein tokens offering value within the startup ecosystem are exchanged for cryptocurrency.
Cornell University Professor Emin Gun Sirer said the SEC guidance may have the same effect as the collapse of The DAO, the blockchain investment vehicle that was hacked and collapsed. “This portends the end of the beginning for blockchains. We can no longer count on regulators not understanding what a blockchain is, nor can people use the veneer of a block-oriented data structure to subvert the law. In turn, it represents public acceptance of on-chain financial instruments as being equivalent to traditional ones.”
Despite his warnings on the SEC guidance, Sirer said that the cryptocurrency market can overcome its challenges. “In the next chapter, we will see the cryptocurrency community focus more on its competency and innovative technology, and less on disguised financial instruments, and we will see the financial incumbents challenged by fundamentally innovative technology that can do what has never been done.”