Cryptocurrency Token Holders will Eventually have More Rights than Creators or Issuers, Blockchain focused Lawyer Claims
(crowdfundinsider.com)
Gabriel J. Shapiro, a US attorney focused on mergers and acquisitions (M&A), venture, governance, Infosec, and digital assets, has noted that if you really care about cryptocurrency-related laws and proper governance, then you should know that the most âimportantâ or relevant content out there right now was released this week.
According to Shapiro, Nic Carterâs recent interview with Jeff Dorman, CIO at Arca (an investment management firm offering âinstitutional-caliberâ products to âconfidentlyâ gain exposure to digital assets), on token investor activism is worth watching because it highlights key issues related to issuing âdecentralizedâ cryptocurrency tokens.
Shapiro argues that the creators (the crypto token issuers and blockchain platform developers) are âthe most important thing in this ecosystemâalways.â He claims that, âeventually, token holders will have more rights against creatorsâit is Thanos-level inevitable.âHe further notes:
â He recommends adopting a âholistic approach that gives all relevant parties a voice and takes their concerns seriously.
âHe also mentions that his modest proposal states that crypto tokens are âshares of network equity.
â He suggests that lawmakers and relevant stakeholders need to consider or look into âlightweight interim securities law complianceâ and maybe introduce âbetter governance contracts.
â This can help with âminimizing trust in the places where tech currently canât,â Shapiro states. He adds that the result could be an âoptimized innovation environment.
âIn August 2020, Shapiro had argued that itâs pretty much âpointlessâ to be a lawyer in the crypto and blockchain or distributed ledger technology (DLT) space.
He had pointed out that professionals with computer programming or trading skills are able to make a lot of money or get a chance to explore their creative side.
However, he claims that law is âirrelevantâ to these people and had argued that itâs also not relevant to crypto-related tech.Stephen D. Palley, Partner, Anderson Kill, Technology, Media & Distributed Systems, recently noted (after Uniswap, a âdecentralizedâ on non-custodial Ethereum token exchange introduced its own UNI governance token which is now also listed on Coinbase):
According to Shapiro, Nic Carterâs recent interview with Jeff Dorman, CIO at Arca (an investment management firm offering âinstitutional-caliberâ products to âconfidentlyâ gain exposure to digital assets), on token investor activism is worth watching because it highlights key issues related to issuing âdecentralizedâ cryptocurrency tokens.
Shapiro argues that the creators (the crypto token issuers and blockchain platform developers) are âthe most important thing in this ecosystemâalways.â He claims that, âeventually, token holders will have more rights against creatorsâit is Thanos-level inevitable.âHe further notes:
âCreators can either admit this and start agreeing to some real accountability mechanisms now, thus maintaining a strong voice in the conversation, or they can run from it, in which case semi-clueless judges and regulators will do it for them.âHe added:
âWe also need to realize that every time creators agree to be accountable, it makes their token look more like a securityâthus, the most responsible devs who drive value to their investors are taking risks in doing so, but they still do it because itâs the right thing.âShapiro believes that thereâs no âcherry-pickingâ of issues. He argues that they are all âinterrelatedâŚsecurities law is related to governance [which] is related to tech mission etc.
â He recommends adopting a âholistic approach that gives all relevant parties a voice and takes their concerns seriously.
âHe also mentions that his modest proposal states that crypto tokens are âshares of network equity.
â He suggests that lawmakers and relevant stakeholders need to consider or look into âlightweight interim securities law complianceâ and maybe introduce âbetter governance contracts.
â This can help with âminimizing trust in the places where tech currently canât,â Shapiro states. He adds that the result could be an âoptimized innovation environment.
âIn August 2020, Shapiro had argued that itâs pretty much âpointlessâ to be a lawyer in the crypto and blockchain or distributed ledger technology (DLT) space.
He had pointed out that professionals with computer programming or trading skills are able to make a lot of money or get a chance to explore their creative side.
However, he claims that law is âirrelevantâ to these people and had argued that itâs also not relevant to crypto-related tech.Stephen D. Palley, Partner, Anderson Kill, Technology, Media & Distributed Systems, recently noted (after Uniswap, a âdecentralizedâ on non-custodial Ethereum token exchange introduced its own UNI governance token which is now also listed on Coinbase):
âAnecdotally, from a practitioner, this one (the UNI governance token), it makes it increasingly challenging to advise people in the âDeFiâ space not to sell a governance token which is almost certainly a security when the US Securities and Exchange Commission (SEC) appears to be doing little to police this. It doesnât impact our advice, but given the announcement from a US based issuer (heâs most likely referring to Uniswap) ⌠that they are issuing a massive number of tokens that appear almost certainly to be investment contracts under Howey, Telegram, and the SECâs own framework documentâŚâPalley continued:
âWe will surely be hearing more of the same. I appreciate that we donât have telepathy into the SECâs workings, that much goes on behind the scenes, over a long time horizon, but as practitioners youâd make our lives easier if you appeared to be paying attention. If DeFI governance tokens are a thing you have concluded as a matter of policy arenât going to be shut down and are fine (which they donât seem to be under the current rubric), please say so.âÂHe added:
âthe lawâs the law and Clayton and others have said we have an obligation as lawyers to steer our clients in the right direction. Weâll continue to do that but if anyone from the SEC is listening ⌠We could use a little help.â
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Francisco Gimeno - BC Analyst Tokenisation at large seems too far yet. But we see how it's already trying to get a hold on STOs, and different blockchain based products. One day tokenisation will be a global fact and those who are early users and holder will see they chose the right option. This is like 1998 and the Internet coming fast again.