Event Highlights: Bloomberg Crypto Summit – July 19, 2022

Bloomberg Crypto Summit
July 19, 2022

By Bloomberg Live

2022 is promising to be a historic year for the global cryptocurrency industry. It’s already been a rollercoaster, with highs at the start of the year followed by the collapse of stablecoin TerraUSD Luna, and more pain that led to companies and fortunes wiped away as fast as they were amassed.

Where are we in the evolution of digital currencies and its underlying technology? How long and cold will the crypto winter be, can confidence be restored, and where will innovation thrive?

At the 2022 Bloomberg Crypto Summit, we brought together top names from the worlds of tokens, blockchain, Web3, NFTs, decentralized finance, economics, investing, venture capital, and more to talk about what’s real and what’s speculation,.

Click here to view the Bloomberg Crypto Summit.


Speakers included:

  • Avery Akkineni, President, Vayner3
  • Sam Bankman-Fried, Founder & CEO, FTX
  • Kevin Beauregard, Founder & CEO, Atmos Labs
  • Kathleen Breitman, Co-Founder, Tezos
  • Lule Demmissie, US CEO, eToro
  • Kara Calvert, Head of US Policy, Coinbase
  • Jay Clayton, Former Chairman, SEC; Advisory Board Member, Fireblocks; Of Counsel,  Sullivan & Cromwell LLP
  • Sen. Kirsten Gillibrand, (D) New York 
  • Helen Hai, Executive VP & Head of Charity, Binance
  • Brittany Kaiser, Chair of the Board of Directors, Gryphon Digital Mining
  • Mary-Catherine Lader, COO, Uniswap Labs
  • Chris Larsen, Co-Founder & Executive Chairman, Ripple 
  • Sen. Cynthia Lummis, (R) Wyoming 
  • Jack Mallers, Founder & CEO, Strike
  • Sarojini McKenna, Co-Founder & CEO Dacoco, Co-Founder Alien Worlds
  • Michael Novogratz, Founder & CEO, Galaxy Digital
  • Eric Peters, Founder, CEO & CIO, One River Asset Management 
  • Matthew Roszak, Chairman & Co-Founder, Bloq
  • William E. Quigley, Co-Founder, Tether; Co-Founder, WAX
  • Craig Salm, Chief Legal Officer, Grayscale 
  • Yat Siu, Co-Founder & Executive Chairman, Animoca Brands; Founder & CEO, Outblaze
  • John Wu, President, Ava Labs
  • Emily Yang aka pplpleasr, Digital Artist

Bloomberg participants:

  •  Sonali Basak, Financial Correspondent, Bloomberg Television
  •  Michael Briody, FX & Crypto Market Specialist, Bloomberg L.P.
  • Katie Greifield, Reporter, Bloomberg; Anchor, Bloomberg Television
  •  Stacy-Marie Ishmael, Managing Editor Crypto, Bloomberg
  • Kailey Leinz, Anchor, Bloomberg Television
  • Matt Levine, Opinion Columnist, Bloomberg 
  • Mike McGlone, Senior Commodity Strategist, Bloomberg Intelligence
  • Matt Miller, Anchor, Bloomberg Television
  • Emily Nicolle, Crypto Blogger, Bloomberg
  • Allyson Versprille, Crypto Regulation Reporter, Bloomberg
  • Alex Wenham, Global Head Cryptocurrency Product & Digital Asset Lead, Bloomberg    L.P,


Event highlights:

In Conversation With Michael Novogratz 

The damage from the recent crypto crash needs time to heal, and a new narrative needs to emerge, according to Michael Novogratz, Founder & CEO, Galaxy Digital. Adding that trust, disclosure and a more level playing field are also needed. “It’s a bump in the road, not a u-turn. Crypto still needs to be an asset in your portfolio.” Part of the issue is misconceptions and a lack of understanding. “People don’t read the fine print. They think it’s like a bank account.” 

Novogratz said token economics need to be clearer, but in the end, crypto is the future because of the lack of trust in traditional financial institutions and it’s “almost inbred in us to be gamblers.”


Spotlight on The Responsible Financial Innovation Act

Diving in where others fear to swim, Senators Kirsten Gillibrand, (D) New York and Cynthia Lummis, (R) Wyoming, are in the final stretch of a bipartisan bill to establish a regulatory framework for digital currency. 

Among the last hurdles is to bring the rest of Congress up-to-speed. “This is still new to many. It’s a lot to digest,” Lummis said, explaining that the proposed legislation will be considered one piece at a time, but voting should start by the end of this year. 

Gillibrand said Sen. Cory Booker (D) New Jersey, will be a co-lead on the agriculture portion of the bill, and agreed with Lummis that there is a sense of urgency that should help propel the bill forward. “Most of our colleagues are alarmed about recent events,” Gillibrand said, referring to the crypto market. “They are interested in the consumer protection the bill affords.”

The bill, S.4356, is posted in full on github and is attracting the hoped-for feedback from industry experts. 


Crypto’s Regulatory Conundrum 

Kara Calvert, Head of US Policy, Coinbase laid out the overriding issue. “We’re a global company and have to comply with all the rules and regulations. We need clarity and standards.” She advocates for global best practices that can filter down, particularly in the U.S., where there is a lack of consistency across federal and state regulations. She added that it’s important to not regulate by enforcement. 

The rules need to be around appropriate custody, according to Jay Clayton, Former Chairman, SEC; Advisory Board Member, Fireblocks; Of Counsel,  Sullivan & Cromwell LLP. He applauded the coordinated effort by the U.S. legislature and said that what’s happened in the digital currency space in the last few months is nothing new. Capital, liquidity and leverage control are “age-old lessons,” as with any financial asset. What’s important about regulation of digital assets, Clayton said, is that they’re global, and largely retail, instead of the typical domestic and institutional. “That has presented a regulatory challenge that we really haven’t encountered before, which is trying to have global coordination across a new type of asset class, at the retail level.”


Grayscale Sponsor Spotlight

Craig Salm, Chief Legal Officer, Grayscale offered an update on the very recent denial by the SEC to convert the Grayscale Bitcoin Trust to a spot bitcoin ETF. They’ve filed a petition to review, and although it will start at the appellate level, it’s predicted to take up to a year. For Salm, it’s about finding a way forward, and that’s not operating as a trust. “It needs to be sorted out for the market. What it boils down to is simple; futures and spot ETFs operate the same way. The regulations should apply to both.”

Is DeFi Going to Weather a ‘Crypto Winter?’

These industry insiders see this as a time to make lemonade. A chilly plunge for crypto has generated lots of attention, pushing regulatory efforts forward and raising awareness for the masses. The panel began by discussing the differences between CeFi and DeFi.

They essentially operate the same, said Mary-Catherine Lader, COO, Uniswap Labs. “A critical difference is that decisions are determined by the token holders and decentralized participants in that ecosystem, and so, you’re not dependent on human decisions.”

Matthew Roszak, Chairman & Co-Founder, Bloq spoke to “the good, the bad and the ugly” of the last six months in DeFi, the ugly being the “massive, failed experiment” of Luna. “This is a dynamic that a lot of DeFi builders are trying to figure out. What are the incentives, and ways to attract liquidity to their protocol. It was pressure tested, and it failed. This is what we want to see.”

John Wu, President, Ava Labs blamed the Luna failure not on the engineering, but risk management. He said people need to understand financial systems better, and therefore, how risk management should be done and how things can be set up. Success will depend, in part, on attracting traditional investors to use it. Wu termed stablecoins “the lubricant that makes DeFi work.” As for the future, he sees a rebound to aggressive growth companies, but said no one can predict where macro will go.


The Fight to Greenify Cryptos

Proof-of-work is one of the most important technologies we have today, said Brittany Kaiser, Chair of the Board of Directors, Gryphon Digital Mining, pushing back against the suggestion of changing the code to reduce crypto mining energy use. “It would take convincing miners around the world to go for that.” Proof-of-work is a better solution, she said. Kaiser also spoke to the differences in state laws, noting that New York requires mining with 100% percent renewables, while others are weak.

Chris Larsen, Co-Founder & Executive Chairman, Ripple also supports the proof-of-work approach, adding that renewables also have to produce energy. Bitcoin mining, he said, is an incredibly entrepreneurial industry that is incentivized to burn a lot of energy. “What if the incentives were a way to create energy to push out onto the grid, or carbon capture as the reward?”


In Conversation With Sam Bankman-Fried

Sam Bankman-Fried, Founder & CEO, FTX offered his take on current market conditions, how crypto factors in and the LUNA crash. On bubbles and capital, he said it’s relevant to the crypto space, is being better allocated now and profitability is no longer a dirty word.

As for the crypto winter and rescuing failing companies, Bankman-Fried went in-depth on the process, and said the decision-making often starts with determining whether the numbers look bad due to a lack of transparency, or if they just don’t know what they’re doing. But, overall, it’s about what’s healthy for the crypto ecosystem. “It’s okay to do a deal that is moderately bad in bailing out a place. We are really incinerating a smallish amount of money,” he said, speaking to a focus on long-term results.

On hedge funds and the difficulty in getting capital into the crypto system, Bankman-Fried talked about people “developing spigots to connect non-crypto money with crypto money” and “trying to get as much money as they can through it because the other spigots aren’t working.” That capital flow comes from retail deposits on shadow banks and institutional money.


In Conversation With Jack Mallers

Jack Mallers, Founder & CEO, Strike was introduced to Lightning Network, which his company now uses, when he ordered a pizza in London from the U.S. via a free, instant global transaction. He now advocates for a more efficient payment rail.“I think what we all want is an open, free market competition, an open standard to transfer value.”

When asked about El Salvador, where Strike operates and bitcoin is legal tender, Mallers asked, “Since when is changing the world and the trajectory of your country a homework assignment that was due in like, three days?’ He noted that even with a massive decline in value, bitcoin is still out performing Netflix.

On crypto, in general, proof-of-stake and energy mining uses, Mallers went on a bit of a rant. “Since when was using energy a bad thing?” He went on to explain how bitcoin can make use of excess energy and stabilize the grid. “It’s just such a ridiculous, uninformed, uneducated opinion. Guys, what are we talking about? The fact that if a lot of people want to create bitcoin it becomes more difficult is why the thing works. Have you lost your mind? Creating money cannot be free!”


The Macro Forces 2022

An elegant approach, “that weeds out what’s not good,” or a chilling effect? Both are possibilities on where regulations will land, said Lule Demmissie, US CEO, eToro. She spoke about asset class transitions and the strength of the U.S. dollar; the “highway that a lot of other currencies are built on.” Confirming her belief that bitcoin is the  future, Demmissie said, “The kitchen is hot right now, and I’m staying in.”

Kathleen Breitman, Co-Founder, Tezos said that the real question is how the market responds to contractions. Describing Tezos as “tech for the future,” she said it can update itself, and that the focus now is on scaling. “Technology doesn’t thrive if it doesn’t scale.”

Eric Peters, Founder, CEO & CIO, One River Asset Management said regulators see the value in bitcoin technology. He predicts a decade-long devaluation of the dollar versus hard assets as the global economy resets, and that bitcoin may rally ahead of that  “Bitcoin is here to stay, while most others will not, because a tokenized dollar wins.”


Leading the Charge in NFTs

On philanthropy and Ukraine, in particular, Helen Hai, Executive VP & Head of Charity, Binance, said the transparency of bitcoin has reduced costs associated with charitable donations, and makes viable small donations, the kind the average person makes. “People have been excluded because the transaction is too expensive. With crypto, everything is possible.”

Emily Yang aka pplpleasr, Digital Artist said she gets flack for agreeing with Bill Gates, on NFTs, that “it’s all about who the next person to buy them will be.” She called NFT’s “inclusive and collaborative.” She spoke about art being art, even if it’s created digitally, and about ‘DYOR’’ do your own research, to determine the environmental impacts to “decide what you are comfortable with.”

“There’s a lot more that NFTs can be, ” said Avery Akkineni, President, Vayner3. People can understand the value in them, such as rarity, but have a problem with not owning things in their digital experiences. “You can’t take it with you to other experiences.” That needed change is just starting, she said, noting a “conceptual shift in the mainstream is why NFTs matter.”


In Conversation With Yat Siu

Yat Siu, Co-Founder & Executive Chairman, Animoca Brands; Founder & CEO, Outblaze spoke in more detail about the evolution of NFTs in gaming, the trends toward digital asset ownership and what gives value to digital land. “Owning digital property is still a novel concept, but feels natural to gamers,” he said. In the metaverse, data is the valuable commodity

Siu called teachers the biggest content creators in the world, but the lowest paid. With NFTs, their concepts are turned into assets. “Everything people create becomes an asset, and everything that is an asset becomes a platform.”


Web3, Blockchain Gaming, and Building the Metaverse

William E. Quigley, Co-Founder, Tether; Co-Founder, WAX offered a reminder that the digital property marketplace is more than 20 years old. He recalled trading skins in the late 1990s. “People were basically trading their work, and selling to people with less time and more money.” What’s new is that Web 3 promises a permissionless environment fundamental to the metaverse. He stated that big gaming companies don’t like NFTs, and “are an anathema to the prevailing models of triple A video games,” and will never be adopted, “as we think about them.”

Kevin Beauregard, Founder & CEO, Atmos Labs agreed, but added that new gaming technologies will bridge the acceptance gap. He spoke to competitive versus economic simulator gaming  “At the end of the day, it’s about building gaming integrity. You want to build a game that’s fun, and at some point, competitive.” 

Sarojini McKenna, Co-Founder & CEO Dacoco, Co-Founder Alien Worlds talked about not having guilds that are an issue in other games, but “communities that have come together,” and landowners that have created additional reward mechanisms. “There isn’t an economic model there that’s akin to an NFT rental model, but I think that self-organized players into units is a wonderful thing.” 

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