Former US Justice Department Prosecutor: Crypto Could Defy Regulation for Years
Speaking at the 2018 Code Conference in Rancho Palos Verdes, California, Recode moderator Peter Kafka was joined by Stanford Graduate School of Business lecturer Kathryn Haun, Ripple CEO Brad Garlinghouse and IBM Global Industry Platforms Senior Vice President Bridget van Kralingen where they deliberated the slow pace of regulation in the cryptocurrency space.
Kathryn Haun, who was told to “shut down Bitcoin” by her former employer, the Department of Justice, now sits on the board at Coinbase, the largest digital asset exchange in the US, and HackerOne, the largest cybersecurity firm with a bug bounty program and over 100,000 hackers to uncover security vulnerabilities.
She says blockchain and cryptocurrencies will see several more years without regulation.
Haun: We don’t want regulation to outpace understanding. And If you would have had a law about cryptocurrencies or blockchain passed a year ago, it would have been completely outdated today. So I think regulators, lawmakers, policymakers know this. It’s important to wait and see how the technology develops. For example, who was talking about ICOs, Initial Coin Offerings, a year and a half ago? If we had had a crypto law passed, it wouldn’t have covered that. So I don’t think we’ll see a uniform law on crypto, a regulation on crypto. What we’ll see instead, I predict, we’ll see a series of enforcement actions for some of the worst of the worst actors in the space from a variety of different agencies. We will potentially see some legislation in the coming years if it turns out to be necessary. But look, there are already plenty of laws on the books that regulators and lawmakers and law enforcement have. There are money laundering laws and, you know, regulators can adapt to that.
Kafka: How long practically, do you think, before we have an established, sort of, body of laws that says this is ok, this isn’t okay, this is a security, this isn’t?
Kafka: Is that two years, five years, ten years?
Haun: I mean, I’m not going to slap a number on it, but I think you’re talking years. We will see, I think, in the next year to a year and a half, a lot more clarity on what is a security and what isn’t a security from SEC. Where you’re talking about criminal prosecutions, I think you’re talking years.
In addition to lecturing at Stanford Business School, Haun taught cybercrime and cryptocurrency at Stanford Law School. She became a Bitcoin expert as a federal prosecutor for the DOJ, leading investigations into the Mt. Gox hack and the Silk Road drug market.