‘It’s time to build.’ Resilience and cautious optimism was mood at TechCrunch crypto event

Expert global panelists urge investors and builders to stay the course, despite FTX demise

By Riley Kaminer

Bitcoin has fallen 70% from its all-time highs almost exactly one year ago. Ether has taken a 78% tumble over roughly the same time period. Meanwhile, the sector has been riddled by a rash of recent scandals: from the demise of FTX to CoinBase’s mysterious $400 million “mistake.”

The enthusiasm of Miami’s crypto scene seems to have taken a similarly sharp tumble, as evidenced by Thursday’s TechCrunch Sessions: Crypto conference. The crowd barely made a dent in the 2,000-person capacity Knight Concert Hall – compared to packed houses in events around this time last year and earlier this year such as the Bitcoin Conference, NFT Week and NFT BZL. 

TechCrunch organizers acknowledged that the roster of speakers had slimmed down since they began to organize the event. For instance, embattled CoinBase CEO Brian Armstrong did not end up giving a talk. 

Still, what TC Sessions: Crypto lacked in quantity, it made up for in quality. Discussions ranged from building a non-fungible empire at OpenSea to fundraising in a crypto downturn to the future of regulation. Of course, each and every panelist attempted to make sense of the FTX saga. 

The Refresh Miami team was out in full force to bring you some of the highlights.

CZ sets the tone, talking FTX and the future of crypto

One person who was clearly unafraid to take the (virtual) stage was Binance boss Changpeng Zhao, known in the industry by his initials CZ.

His conversation was far from a victory lap. Quite the opposite, in fact: CZ tried to play down his protagonist role in the FTX scandal and accompanying market volatility. “I still don’t think I have that much influence,” he told the audience.

“I think we were the last straw that broke the camel’s back,” CZ continued. “To be honest, even if I didn’t make that tweet, this whole thing could still happen. I may have happened to be the last thing that poked it.”

Of course, that did not prevent CZ from speaking in no uncertain terms about the behavior that led to the crypto exchange’s collapse. CZ drew parallels between FTX CEO Sam Bankman-Fried and convicted fraudster Bernie Madoff.

“Having a license increases trust, but it’s not a hundred percent thing. Many licensed entities –Madoff was a licensed fund manager – they lost 10x more than FTX. So having a license increases trust, but it’s not guaranteed. FTX has many licenses in the world. And guess what? They were lying.”

So would regulation have prevented the FTX collapse? Probably not, in CZ’s estimation – but it also could have softened the blow. “If we have more of those mechanisms, this thing probably could have been prevented or reduced,” he asserted.

Ultimately though, CZ urged skittish investors to keep the faith. “Just because one company is mismanaged in an industry doesn’t mean every other company is mismanaged.”

Regulation was a recurring theme throughout the event, with a particular focus on a panel discussion with three legal and policy experts.

Katherine Dowling, General Counsel and Chief Compliance Officer of Bitwise Asset Management, noted that we are looking for what she describes as “Goldilocks” regulation: protective enough to incentivize the crypto elite to want to keep their coins on US soil, but open enough to keep them from moving to more appetizing offshore environments.

Sarah Shtylman, a partner at Perkins Coie and former CoinBase lawyer, believes that this Goldilocks zone exists. But she expressed concern about the recent FTX scandal making crypto-positive regulation even more difficult. 

“I think there’s going to be a big hurdle to kind of get over the Mt. Gox 2.0,” Shtylman said, referring to a bitcoin exchange that closed in early 2014 after alleged stealing from customers, prompting major legislative scrutiny. Bankman-Fried, a major political donor, was a key interlocutor in DC crypto regulatory efforts.

Justin Slaughter, former SEC advisor and Policy Director at crypto investor Paradigm, painted a less positive picture. “There has been a buildup of 10 years of benign neglect from regulators,” he said. To come back from that will require the work of congress, which in Slaughter’s view is unprepared to meet the challenges presented by the industry.

Slaughter expressed consternation over the Office of Government Ethics’ recent decision to ban crypto policymakers from owning the digital currency. “It’s very hard to understand how crypto works unless you experiment with it,” he said.

A glimpse into our web3 future

Startups offered the most optimistic perspective on the current crypto landscape, with around a dozen presenting their work in an exhibition area, which became a mecca for lively networking.

Three startups also had a chance to present at a pitch competition, with Silicon Valley gaming infrastructure startup Moonstream [pictured below] taking home the top prize. St. Petersburg startup Cityverse shared its blockchain-powered local news platform, while Connecticut startup Personal Digital Spaces outlined its vision to turn data into digital assets. 

Nancy Dahlberg contributed to this report.

READ MORE ABOUT SOUTH FLORIDA CRYPTO IN REFRESH MIAMI:

Riley Kaminer