August 24, 2014

On how to interface to regulation and law: follow Michael Jackson of Skype's advice

If you've ever wondered how to deal with the legal side of business, here's the answer, written out by someone who's done it:

To put it bluntly – every bitcoin actor should be reading the law very carefully and finding the loopholes. You should all invest a great deal of time in this – it is hugely important. For example, are you really moving ‘currency’ or are you simply exchanging some sort of token?

Life is going to be a lot easier if we take the latter position, as there are no rules that prevent the exchanging of keys. Likewise there are no rules that say keeping a string of data in a cold storage vault makes a business a bank.

So far, many of the proponents of bitcoin have been taking entirely the wrong approach – making claims that attract a raft of unwanted rules and regulations.

Michael Jackson (former COO of Skype and current venture capital investor at Mangrove Capital Partners) has got Bitcoin community's number. I mean that in the sense that he understands, whereas they don't.

Don’t ask permission

Companies need to just carry on doing what they are doing, if they can make a case for themselves that they don’t need regulation, they shouldn’t even go near it.

People do what they love best: regulators like regulations and want to apply them. If they didn’t, they would have a different job. So, asking for advice is framing the discussion. Once again, companies should read the rules, argue why they are not covered by the rules and use that analysis as a defence, but they should only ask for permission if they are sure it is necessary.

Furthermore, companies shouldn’t ask a lawyer. Expecting a lawyer to find a loophole in the law and to state it on paper simply won’t happen. People should read, understand and learn it themselves. They can test their argument on a lawyer, indeed on anyone, but should not expect anyone else to come up with it.

I feel so much less alone. If you're in a cryptocurrency startup, read that article.

Posted by iang at August 24, 2014 08:10 AM | TrackBack
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