William Mougayar

On Tech, Business, Society.

Tag: ICOs Page 1 of 3

On Startups Attacking Small vs. Big Problems

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On August 30, 2019

In Think Tank

I often see entrepreneur pitches that want to attack a big problem from the get-go. Whether it’s via a pitch deck or a white paper (if coming from the blockchain industry side), the main intention is to disrupt an entire industry or supply chain, and take over something that is “not working well”. 

So, they start with a grandiose strategy to conquer the world, and assume that they will get there by going head-on with the incumbents. Just because they described the problem well doesn’t give them credibility nor does it give their investors assurances that they will succeed. What makes sense on paper and in theory is often very far from the reality of execution. 

The history of startups that became big companies is paved with stories of gradual growth, starting with small successes that later became bigger ones. Startups excel when they “flank” the competition (or incumbents) by landing in uncontested areas, then they grow from these areas into the next adjacent segments, and it goes from there.

Amazon didn’t set to take over the retail industry from day 1. They didn’t say “retail is broken”, and we’re going to fix it by taking a $200 Billion chunck of it per year online (2018 figure). Rather, they started by being an online book marketplace (a segment of retail), then got into household products via the Drugstore.com acquisition, and it went from there. They kept adding and increasing their footprint gradually, one segment at a time. 

Facebook didn’t start by saying they were going to re-define social networking and become the social network of choice for the world. They started as a photo sharing application for university students, and then grew from there gradually.

During the early Internet years, there was a phenomenon called “B2B electronic marketplaces” that wanted to attack every single industry or sub-industry. By 1999, there were close to 200 such industry consortias or B2B marketplaces that wanted to re-define how business to business relationships were conducted. On paper, it made a lot of sense because the Internet was that efficient medium of exchange between organizations. By the middle of 2001, when it was clear that the Internet was hitting a wall, only 2 of these marketplaces remained standing. All others closed down for a variety of reasons: failure to raise funds, failure to launch, lost interest from concerned partners, lack of support from key stakeholders, etc. And many of them were actually started by the bricks-and-mortar incumbents that were trying to jump on the e-commerce bandwagon.

Fast forward to where we are today, to the world of ICOs and their flagship white papers that are paved with grandiose ideas to change the world, and asking for funding from the fools that are to believe them. These ICOs want Series D/E type funding when they are really a seed-stage company, and sometimes without even a product. Funding ideas instead of working products is not something that typically ends well.

That said, there are exceptions. In that category, we have the case of Libra and its grandiose strategy. They didn’t overtly say it, but the following words are implied from their strategy: “banking is broken”, “international remittances are broken”, “central banking is broken”. Can they succeed by executing on a direct attack on incumbents? Not every startup is like Facebook, and not every company can put together an A team to tackle a big problem. Despite all of that, they still have several headwinds, not the least being from the regulatory side. What’s interesting about the Libra project is that it takes a two-prong approach to market infiltration: 1/ it is exclusive to Facebook Apps (Messenger and WhatsApp initially), so they have a captive market that will have no choice but to try it out, 2/ introducing “Move”, a general purpose programmable money language that developers will latch-on to, to extend money transfers in and out of platforms via the Libra system, for a variety of use cases. For those and more reasons, Facebook’s chances of success are much better than most other startups or projects with a similar range of ambition. Maybe they could have started with a less ambitious strategy, and remained under the radar for a while longer, but their current dominant status in social networking gives them a huge advantage in luring users to their currency.

When you hear or read words like “disrupt industry”, “re-invent supply chains”, “xyz (a multi-billion dollar market) is broken and we’re going to fix it”, run away if you’re being asked to fund them with big bucks to do that. The reality of startups (and any projects) is that nothing happens according to the original plans, and failure will be the dominant end-point. If you are an investor and you take a portfolio approach to your investment decisions, then it might be OK to fund a few shots to the moon, as long as you also invest in realistic projects as well. 

Startups and entrepreneurs can be ambitious (and they should be), but they also need to be realistic about the fact that everything big thing starts small. There is no escaping the progressive nature of success even if you were able to raise substantial sums of money from the beginning.

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The Future of ICOs and the Road Ahead: One Step Forward, One Step Back

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On December 13, 2018

In Think Tank

Forward, backward - wooden signpostIn my CoinDesk year end opinion piece, entitled The Future of ICOs: In the Hands of Regulators or Innovators?, I predicted that 2019 will be a year where the SEC will face an industry that will be reluctant to cave in to its vague, inconsistent and antagonistic posturing vis a vis cryptocurrencies, tokens and ICOs in the US. I encourage you to read that piece. This morning, my inbox and news feed had a number of related news and developments that I’d like to highlight.

Muddled Waters

In his end of year holiday email, Michael Terpin (Transform Group) writes:
… the SEC sought to define most, if not all, ICOs as unlicensed securities in the US, despite no regulation or law ever having been passed to that effect (and muddled reasoning at best on how one defines a security vs. a commodity in this age of cryptographic tokens).
I like the description “muddled reasoning” because it aptly describes how the SEC has been communicating with the market, exercising its own version of cryptic messaging via occasional speeches, interviews and regulatory enforcement actions- which do not sum up to cohesive clarity. Michael Terpin continues on the subject of security tokens:
… heightened regulatory scrutiny is making it an easier path to offer equity in one’s company, asset (real estate, art, etc.), fund or, in some cases, as a two-step process to funding an ICO in the US through deeming it a security (not appropriate in many cases, but it’s happening).
The keyword highlighted here is “not appropriate in many cases”, and I concur that this is indeed happening, as I said in my CoinDesk piece that an STO (securities token offerings) is not necessarily a good path, just because you are compliant.

More Questions than Answers

In a surprise development, the CFTC issued a public Request for Information, entitled Request for Input on Crypto-asset Mechanics and Markets, specifically focusing on ether and Ethereum. It is a list of 25 questions, ranging from the mundane (e.g., How many confirmations on the Ethereum blockchain are sufficient to wait to ensure that the transaction will not end up on an invalid block?) to the more complex (e.g. Does the Ethereum Network face scalability challenges?) This is a very progressive move on the part of the CFTC, and it demonstrates their genuinely inquisitive seriousness pertaining to Ethereum, but I wonder if the broad public request won’t result in a cacophony of answers that will need to be carefully curated. I would have preferred if they limited these inquiries to expert opinions that could still be varied and diversified. I can imagine Ethereum antagonists going to some extent at attempting to present subjective views that may not be so accurate, and I hope that the CFTC is able to properly analyze and digest the flood of facts and opinions they will receive. Nonetheless, this is a big stamp of approval for Ethereum, as it puts it on par with Bitcoin from an importance point of view, in the eyes of the regulators at least. Maybe related to the CFTC development, earlier this week, 2 US Congressmen introduced 2 bills, one promoting Consumer Protection, and the other aiming to “conduct a comparative study of the regulation of virtual currency in other countries and then make recommendations for regulatory changes to promote competitiveness in the U.S.. Both bills are directed to the CFTC. The scope of the comparative study could be quite a big project, and I’m not sure if they retained some external consultancy to help them analyze the data, but both this initiative and the CFTC’s own RFI point to how little the regulators think they know about cryptocurrency and the blockchain, as they raise more questions than provide answers. However, kudos to the CFTC who at least, is indirectly acknowledging that they know what they don’t know, as contrasted with the SEC who has taken more bombastic approaches to slicing and dicing the blockchain market as they see fit. Incidentally, last year, I had created an initiative to survey the global state of regulatory practices, called Token Awareness. Here’s a page rounding up some activities around the world, but it needs some updating.

Token Users as the Trump Card

Moving on to another recent development,- Basis, a much publicized stablecoin startup has decided to shut down and return unspent money to their investors. Then CoinDesk offers a contrasted picture in the Blockstack ICO highlighting their conservative nature about how they are spending their cash, and how they have de-linked their token from speculative market hands. Blockstack was birthed as a startup where they were disciplined enough to appreciate the value of a venture round, investor scrutiny and sound, measured progress. [Sidenote: I will be speaking at the Blockstack Decentralize the World event in Hong Kong on January 10 2019). This all boils down to two trends: 1/ Some ICOs who are encountering headwinds or challenges to implementing their vision are being true to themselves and shutting down, and returning unspent moneys or tokens to investors. We have already seen Cofound.it do that a couple of months ago. There are scores of ICOs who have not made progress, but they aren’t being true to themselves nor to the market. They are hiding under a rock, hoping the market will recover and lift all the boats. In reality, that will not happen. Their reserves will dwindle, and they will be eventually forced to shut down. 2/ The underlying lesson of all this, is that without a lot of users, a token is worth nothing. I’ve been saying this a lot throughout my dozens of presentations this year, “The only token that matters is the one actually being used.” And I have written about that topic multiple times, here and here.

Wither the SEC?

A most interesting comment was buried in a MAMA (Multichain Asset Managers Association) email I received this morning, in a piece co-authored by Andreas Glarner & Alex Lindgren of the Swiss Law firm MME. The article offers an analysis of the November 8th 2018 US Securities and Exchange Commission settlement and charges against decentralized exchange EtherDelta. The authors start by observing that “Obviously, the view of SEC does not necessarily have an implication on how other jurisdictions and regulators approach the question.” They add that this is the “first opinion of a regulator on the topic and therefore will remain to have an importance on the future discussion of the matter“. That seems to concur with the SEC’s approach of trying to win a few enforcement actions so they can establish a trail of case law precedents which they hope will serve as a basis for future regulation interpretations and market signals. It is the opinion of many in the industry that this approach would be detrimental to the health of the North American blockchain market (because the OSC typically follows the lead of the SEC). I will continue writing about the regulatory aspects of cryptocurrency and blockchain technologies because of the heightened importance of that topic, its critical nature and the conjectures that we have now reached.]]>

13 Questions for the Blockchain as We Enter 2018

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On December 26, 2017

In Featured, Think Tank

“The wise man doesn’t give the right answers, he poses the right questions.” — Claude Levi-Strauss

As we enter 2018, here are some questions on my mind, relating to the state of blockchain and where we may be going.question-questions_answers_5

I like asking questions, and have followed that format last year in my CoinDesk end-of-year article titled “Blockchain in 2017: Do We Know What We Don’t Know?” These questions are still relevant a year later, as many of them were strategic, so I encourage you to re-read it.

Today, there are newer questions I have been asking during some recent talks I gave, such as at my opening remarks at the Token Summit II in San Francisco on December 5th 2017, in this video:

1. What makes a “Good” Token?

At the heart of this question is the specific token functionality that is being concocted or delivered. I have written at length about it in Tokenomics, stressing the importance of the token role in a given project, protocol or application. Beyond having figured that out, what makes a good token is undoubtedly the team behind it, because they need to execute, iterate and deliver.

2. Will the success rate of ICOs be better or worse than tech startups?

Worse than startups. Why? Because most ICOs aren’t being surrounded by the right advisors and mentors. Yes, ICOs have lowered the fund raising bar, but they have also raised the ensuing success risks. Many ICO projects include first-time entrepreneurs who are freewheeling on their own, zigzagging their way into uncertainty. There is no escaping typical startup evolution laws and dynamics, even if the blockchain project is open source, decentralized and includes smart contract autonomy. The flip side is that, having lots of money allows an ICO project to stay alive longer, giving the illusion of progress, but that’s not a measure of success necessarily.

3. Are open source, decentralized protocols going to be more significant than their web equivalent?

The fat protocols theory has plenty of believers and critics (here and here). Regardless of the nature of this debate, there are real blockchain protocols that are emerging. Some are horizontal and general-purpose (eg. IPFS for file sharing across any applications), while others are vertical or industry specific (eg. Etherisc for insurance, or OpenBazaar for P2P commerce). With the Web and Internet, the suite of common protocols included: TCP/IP, HTTP, HTML, DNS, FTP, IMAP, and SMTP, to just name a few of the more popular ones. With the blockchain, we are still waiting to clearly see which major new protocols will emerge and sweep armies of developers with them.

4. Will decentralization deliver?

Decentralization has several dimensions: political, philosophical and technical. Some blockchain purists would like to immediately decentralize everything, but the reality is that decentralization will be achieved step by step. It is not a sudden state that you just turn on just because there is an underlying blockchain somewhere.

5. Will there be a crash?

If you have been following the crazy volatility underlying the price of cryptocurrency, you wouldn’t be asking this question. Truth is,- there have been many crashes along the way. Market caps are routinely swinging 40% up or down on a given week, and that’s enough variation to crush anyone who is on the wrong side of the trend. A better question might be: when will we see the “Big Crash” (with a capital C), the one that will be the equivalent of a hurricane or tsunami in terms of proportion and damage incurred. In my opinion, we still need to see much higher total market caps that are even more vertiginous and sky-reaching, probably in the $1.5-2 Trillion range before a spectacular Crash would likely occur.

6. Will countries or central banks create their own cryptocurrency?

A few countries and central banks have been talking about “digital currency”, and most of them are carefully ignoring the term “crypto”. Fact is- digital currency is not the same as cryptocurrency. These countries/central banks are recognizing the benefits of the digital currency features of cryptocurrency, but they don’t want any of the decentralized uncertainties that come with blockchain-based currencies. That said, I believe we might witness two phases of evolution. First, we will see an initial rolling of some “national digital currencies”, inspired by cryptocurrency. Then, there will be a second phase with more daring implementations that are closer to the true decentralized ethos of cryptocurrency, once we gain more experience in learning about crypto-economic monetary policy mechanics. Likely, these experiments will emerge in countries that don’t have stable currencies, as this allows them to leapfrog into the world of cryptocurrency, just as many underdeveloped countries leapfrogged into cellular networks and didn’t build better landlines.

7. Is Crypto Valley ahead of Silicon Valley?

The area around the small town of Zug in Switzerland is commonly referred as Crypto Valley, due to its local government openness to, and acceptance of blockchain-related jurisdictional peculiarities. The Ethereum Foundation is credited with having swung the door open for Zug’s emergence as a “crypto valley”. Since then, the canton of Zug has seen rapid development of a healthy ecosystem related to everything crypto, from technology startups, developers, legal services, accelerators, experts, and financial resources. It is worthy to note that the Zug phenomenon has spilled into neighboring Zurich, given the 23 minute-train ride proximity to the financial capital of Switzerland.

8. What will the SEC do?

When it comes to cryptocurrency related regulation, the SEC is the big elephant in the room that everyone is watching. Their actions (or inactions) have a direct effect on the mood and environment pertaining to cryptocurrencies, especially since ICOs have been so popular in 2017. So far, their actions have been of a punitive nature, having picked on a handful of clear scam cases, in addition to a steady dose of cautionary warnings. However, it is possible that the SEC might start to provide more specificity pertaining to some form of regulatory compliance around token generation events. My bet is that they will be asking for some transparency and reporting requirements, somewhat similar to what currently exists on the securities side.

9. Will Wall Street adopt the blockchain?

Here lies the dichotomy. The blockchain is an alternative financial system that challenges the de-facto traditional financial system. Yet, the traditional financial sector is poised to gradually embrace and adopt blockchain technology in a variety of levels. Although Wall Street will not shoot itself in the head by obsoleting itself, it will shoot itself in the foot by taking baby steps towards implementing blockchain technology as part of its partial infrastructure, then gradually will introduce new products that are solely focused on the blockchain.

10. What will be the effect of new crypto funds entering the space?

To-date, more than 170 funds totalling $2.5B have been announced in this space, including from newcomers, traditional VCs and Wall Street veterans. I have joked that, soon we will have more funds than tokens. Most of these funds will start to deploy their capital in 2018, fueling more frenzy indiscriminately on immature blockchain models and technologies. On the positive side, this will continue to fund innovation. On the other hand, this could have a precipitating effect on eventually inflating valuations even further, getting us closer to a big Crash tipping point.

11. Is every asset destined to become liquid on the blockchain?

Without a doubt. From native assets (e.g. CryptoKitties), to new financial instruments, to non-native assets that can have a blockchain representation (e.g. via fractional ownerships), the liquidity of assets is going to get a boost. 2018 may well be the year where we see billions of non-currency assets begin to trade on blockchain networks.

12. When will we see more blockchain standards?

In the technology world, standards have a magical effect on user adoption. We need more blockchain standards of the middleware kind (read: The Blockchain is Still Waiting for its Web, Here is a Blueprint for Getting us There), because they lower the difficulty bar for common developers who want to interact with blockchains without worrying about the vagaries of its infrastructure. Look at the effect of the ERC-20 standard on the proliferation of tokens issuance, and the emerging ERC-721 non-fungible token standard’s impact on the development of native assets, and these are only the tip of the iceberg.

13. Do we fully understand the economic models behind tokens?

The alphabet soup on metrics, analytics and quantitative assumptions is growing: stablecoins, monetary policy, inflation rate, tokens supply, velocity of assets, asset base, transactions volume, etc…to name a few. But do we really know how to model the theory of blockchain economies based on the relationship between these variables? Does each cryptocurrency issuer need to become like a Federal Reserve Chairman, who is constantly tweaking the various economic knobs and dials? What experience can we point to, so we can decisively say “this is the theory”, or “these are the best practices”? Our field of knowledge is definitely embryonic at this point.

There you have it. Of course, there was clarity in some answers and uncertainty in others.

Let 2018 usher a new chapter in the evolution of the blockchain. It is only pushing the limits of its implementation that we will discover its real potential.

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Introducing Token Awareness in Canada

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On October 2, 2017

In Think Tank

wellnessbdFollowing the publishing of my Open Letter to the OSC yesterday, a related initiative I am spearheading is “Token Awareness Canada”.

This is a non-profit initiative with a single public benefit goal: promote responsible practices in Token generation events via the publishing or creation of best practices around them.

The web site where this information will be published is:  www.tokenawareness.ca, and I am joined by a small steering group to guide its evolution. One of the key deliverables will be a set of best practices for issuing tokens for Canada. The website will also be a central jumping point with comprehensive resources relating to this topic, including regulatory and compliance aspects.

Some groups are advocating self-regulation for the industry via a proposed set of disclosures. Others are calling for more consultation and dialogue with the regulators. This initiative is more about education and using what we already have. We cannot wait for the regulators who are typically slow to react, while they continue to study the many alternatives they have. This field is still evolving and maturing in many of its aspects, but entrepreneurs cannot sit and wait.

This is not a self-regulation type of initiative. I don’t believe that self-regulation will work in this field. The regulators are the ones who will regulate. Their job is to update their compliance requirements, and clarify the applicability of existing ones. Our job in the market, as entrepreneurs or investors is to implement sound and responsible practices so that the regulators find us uninteresting to worry about.

It is my hope that the website Token Awareness in Canada becomes a central jumping point for Canadian tech companies wishing to take a responsible route towards the new way of creating innovation with token-based models. It will be updated gradually and curated very tightly in order to maintain the quality levels that it aspires to meet.

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Dear OSC and CSA Open Letter, Re: Tokens Regulation in Canada

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On October 1, 2017

In Think Tank

Compliance RegulationToday, I’m publishing an open letter to the Ontario Securities Commission and the Canadian Securities Administrators, two of the most influential regulatory bodies in Canada.

I invite my readers and interested Canadians to sign this letter as a petition on Change.org.

October 1st 2017

Dear OSC and CSA,

I’m writing this open letter, because I believe you hold the keys to an extraordinary moment in Canadian business history, with a unique window of opportunity that may soon close upon us. Around the world, an important phenomenon has been taking place in full force.

Over the past 12 months, more than $US 2 Billion have poured into a new form of startup. This money did not come from traditional venture capital firms, but via a new method of funding: the cryptographic token. This is special because these startups are defining the next generation of the Internet. They are creating decentralized protocols, services, platforms, infrastructure, applications and products that are based on blockchain technology, and they are using the token as an innovative enabler for new business models and ideas, by giving that token a wide range of creative utility and functionality.

The overall market capitalization of these crypto-based tokens, – a proxy for the companies behind them, and a primary source for this funding has reached a height of $US 176 Billion on September 1st 2017.

The genesis of this unprecedented wave of capital availability is global. For the first time, the level playing field is open to Canadian entrepreneurs to compete for a share of this capital, without being limited by the scarcity of Canadian or US venture capital.

But the reality is that Canadian companies have not been able to easily participate in this new wave of wealth creation, in large part due to the regulatory obscurity around compliance requirements from the Ontario Securities Commission and the Canadian Securities Administrators, the two powerhouses that govern this regulatory field.

Around the globe, smaller jurisdictions are punching above their weight, and opening their doors to entrepreneurs and companies, providing them favourable and friendly compliance environments for distributing their new tokens. Switzerland, for example, has already processed more than 35 token-based projects and boasts over 100 in their pipeline. Vitalik Buterin, a Canadian who created Ethereum, the second largest (and most important) blockchain in the world, recently picked Singapore as his new country of residence, due to their favourable local regulatory environment, which is fuelling growth in Singaporean-based blockchain startups.

In contrast, Kik, a Canadian-based company and the 5th most popular mobile messaging App in the world, had to exclude Canadians from participating in their token distribution event. My upcoming global blockchain index will face a similar dilemma: we will exclude Canadian residents from investing in it.

The rules for dealing with a security are clear, and sales of tokens that are clearly securities should certainly comply with the applicable rules. Unfortunately, the guidance to date has been heavier on consumer protection risk warnings, and vague about “many” instances where tokens are not securities. The fact is that, many tokens are not securities, because they do not exhibit traditional securities properties. Rather, they represent new forms of rights, such as the usage of a protocol, infrastructure, software or application function- all based on blockchain technology, and governed by smart contracts, a set of programs that frame the interactions between users and software. Many of these tokens are native to the platform where they are created, and they represent the atomic unit of work for it. Despite the clarity that now exists in the marketplace pertaining to new token classifications, the OSC has not yet issued clear explanations on what is acceptable, leaving market participants to guess, or be confused.

Let us not kid ourselves. Canada is not a leader in the emerging blockchain market, despite having the potential of being one.

The OSC Launchpad program was a good conceptual step, but it has fallen short in terms of impact for attracting innovative projects. It is heavy-handed and narrowly guided towards favouring a few cases, perhaps not the most representative ones. Most of the Ontario entrepreneurs I interact with are confused and scared to talk with the OSC or the CSA. Instead of attracting them, the OSC/CSA positions have repelled many of them to come forward. Contrast with the BCSC’s (BC Securities Commission) sandbox that has been more accepting of innovative token-based projects. This is inherently a non-ideal situation.

Why not open the field more broadly, and let a thousand flowers bloom? Emphasize prescribed disclosures and risk factors, then let the experiments run in the market, not inside a restricted sandbox. Many entrepreneurs and startups around the world have recently shown they can apply and adopt disciplined ICO processes, such as the Safe ICO Practices that I recently prescribed.

Undue emphasis on consumer protection alone also stifles reasonable consumer choice and potential benefits. Instead of sending warnings and fears, why not clarify your positions and be clear on what is allowed? Instead of painting with a broad brush and classifying every token as a security, why not be specific about the different types of tokens at various stages of development, with different regulatory approaches for each? A purchase of Ether today could be viewed as quite a different prospect than a purchase of Ether in 2014, yet the token is the same today as it was then. Ironically, had the OSC taken notice of Ethereum’s original Token sale in 2014, it would have undoubtedly not approved it, and prevented Canadians from participating, although the gains today are x1000 the original investment.

For precedent, we must be reminded of General Georges Doriot, the father of venture capital, who in the 1940’s created the first public venture capital firm, in what was seen as unorthodox at the time, and kicked the door open for updating the old securities laws. Just as General Doriot saw that capital needed to get “creative” in order to birth venture capital, today we need to be creative, in order to birth “crypto capital”. Tokens represent a new type of network utility and a new asset class that must be both understood and accepted as part of our future. Here is the reality on the ground:

  • Crowdsourced funding via cryptocurrencies is a viable practice. A lot of good ideas and innovative companies are coming out of it. This segment is creating thousands of jobs and companies all over the world.

  • Cryptocurrency fund management is going to become a common function. It  lies somewhere between traditional fund management and venture capital, and it is already practiced or envied by professional managers and seasoned investors.

  • Cryptocurrencies are not evil and are not for money launderers and scammers. They are for entrepreneurs, technologists, change-the-world dreamers, and those who believe they can (and will) enable new business models, new types of organizations, and new ways to service consumers and businesses alike. In fact, Blockchain technology can actually promote anti-money-laundering records.

 

Cryptocapital and crypto wealth creation are global. Canadian companies and consumers need to tap that potential.

As an early participant and respected thought leader in this global phenomenon, I am joined by several Canadian entrepreneurs, investors, lawyers and leaders, in advocating more relaxed, open, friendly, and clear positions from the OSC and CSA. Specifically:

  1. Allow Canadian consumers to invest in clearly designated, appropriate cryptocurrency-based instruments and token offerings opportunity from anywhere in the globe.

  2. Allow Canadian funds to be created and managed from Canada without obsolete regulatory compliance that shouldn’t apply to them.

  3. Allow Canadian startups who are using clear procedures to raise money via the token model, and fulfill their dreams by tapping the global cryptocapital pool, a new model that is here to stay.

Canada could be a model to the world, if the OSC and CSA adjust their compliance positions, and view this phenomenon as an opportunity, not a threat. Many other geographies around the world don’t have the luxury of a healthy startup ecosystem, filled with engineering talent, experienced entrepreneurs, and a critical mass of startups. Canada has that critical mass, and we could make a difference, if we are allowed to adopt the blockchain as part of our future evolution.

It is our hope that you don’t erect unnecessary barriers for Canadian consumers, entrepreneurs, fund managers and investors. As it stands, it appears that your stance even runs contrary to the Federal Government’s efforts and agenda to endorse innovation to allow Canada to become a more competitive global technology player.

Excluding Canadian consumers from directly participating in suitable opportunities will raise their actual price of entry, as they will choose other global entry points and acquisitions in secondary markets that are invariably more costly. And excluding Canadian entrepreneurs will force them to incur higher operational and legal costs as they seek remote jurisdictions.

It is our hope that we, as the voice of the market, can influence your future views and policies pertaining to this unique opportunity, and we encourage you to seize this extraordinary turning point moment in history.

Sincerely,

William Mougayar Investor, Advisor and Author, The Business Blockchain

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