Crypto Policy Symposium gathers blockchain skeptics – CryptoBudha

John Reid Stark helped launch the SEC’s Internet Enforcement Office in 1998, at the height of the dot-com boom.

Under the office’s founder, Stark, the team was tasked with cracking down on securities fraud perpetrated through the nascent but rapidly expanding web. The job was to track down the bad guys with the same technology they were using — technology that Stark found appealing.

“I was an Internet evangelist,” he told Protocol. “I was talking about how amazing the Internet is and how the possibilities are endless.”

More than 20 years later, Stark is speaking out against the new wave of fraud he’s thinking of. But this time, he’s also taking aim at the technologies he says scammers are using: cryptocurrencies and blockchain.

“There are many reasons to be skeptical of cryptocurrencies,” said Stark. “I feel really shameless.”

Stark has emerged as one of the most outspoken critics of cryptocurrency and is a key figure in a movement calling for a more critical view of the industry and trends.

This loose network includes leading technologists, academics, journalists and activists. One of them is a prominent software his engineer Stephen Diehl. sent a letter to the leaders of the United States Congress Urge them to resist the crypto hype.

On Monday, Stark will join first major conference of this network of crypto critics, including MP Brad Sherman, chairman of the House of Commons Financial Services Subcommittee on Investor Protection, and Alex Sobel, a member of the UK Parliament.

In an interview with Protocol, Stark talked about what the network of cryptocurrency detractors hopes to achieve and why he decided to fight blockchain.

This interview has been edited for clarity and brevity.

How did you come up with the idea for this Crypto Critics Conference?

Steven [Diehl] I started working on the letter with a group of other extraordinary technicians. Once the letter came out, there was such momentum because the skepticism surrounding cryptocurrencies, DeFi, NFTs, and all his Web3 nonsense is so multifaceted.

It has so many facets. Are we talking about bitcoin and more stupid theories, are we talking about ransomware and drug dealing and human sex trafficking externalities, or are we talking about financial systemic he created by cryptocurrencies risk or real riots, hype and nonsense? Trust in blockchain. There are many reasons to be skeptical about cryptocurrencies.

While some critics are concerned about the evolution of the cryptocurrency industry, they are not outright dismissive of blockchain technology. This movement feels like a total rejection of these technologies.

Yes Yes Yes. That’s a wide way to put it. Blockchain is a fundamental aspect of all this, so that’s fine with me. As the tech explained in the letter, this is not a solution. [Blockchain technology] It generally makes things worse. Do not scale. There are all sorts of problems that come with it.

When I was a kid there was a commercial for Wendy’s [which asked], “Where’s the Beef?” I was the Chief of the Office of Internet Enforcement for 11 years. Almost 20 years of my tenure with the SEC was spent juxtaposing law, business, and technology.

I was an internet evangelist. I was there talking about how amazing the internet is and how the possibilities are endless. I actually helped install the first internet terminal at SEC headquarters. It was this incredible technology.

“The wave of cryptocrime is sweeping the world.”

Fast forward to today. [I asked] One of these crypto enthusiasts was like, “OK, let me know. What’s the benefit here?” It’s just a marketing ploy. It’s not this panacea that people come up with.

Moreover, the impact of blockchain technology used in cryptocurrencies, NFTs and decentralized finance is not just ransomware, human trafficking and drug trafficking, all of which are wreaking havoc. A wave of cryptocrime is sweeping the world. Then there are the environmental issues associated with cryptocurrency mining.

What do you say to those who claim that cryptocurrencies are similar to the web?

The first thing I always say is, “Let me know how to use it, no rough ambitious joke.” [like]”Hey, now it’s time to buy a house. It makes credit card transactions safer than ever.”

they just throw anything away. They say it’s about financial inclusion, which sucks, and they’re trying to solve the problem of the unbanked. That’s how they put people in a circle. Just because a lot of criminals started using it and a lot of venture capitalists invested in it and got rich, don’t say this will stick. Please tell me why it’s worth it.

John Stark helped launch the SEC’s Internet Enforcement Office in 1998.Photo credit: John Stark

It does not work as currency. Anyone using it? of course not. Too unstable. Is there a retailer who takes it one day and the next day he’s worth a third of what it’s worth?

And the idea that it’s decentralized is a complete scam. There are miners. I have a digital wallet. There are platforms, exchanges. There are many intermediaries. There are more and more every time you read about it.

Seven or eight years ago, I gleefully entertained the idea that this could become something one day. But I’m done with that. Because there came a point in my research, writing, and experience that felt really shameless.

Gary Gensler is considered a leading critic of cryptocurrencies. But I never heard him denounce blockchain as a scam. In fact, at his MIT lecture in 2018, he felt open to the potential for innovation with cryptocurrencies and blockchain technology.

I sincerely appreciate the position of Chairman Gensler. Back in 2017, 2018, and even his first writing in 2020, he usually ends by saying that blockchain has the most incredible potential.

I’m not a techie, but I’ve been in technology all my life. i am not an engineer. So I was very careful.

“It doesn’t work as a currency. Will anyone use it? Of course not. It’s too volatile.”

Then I started reading more and more techies and talking to more and more techies. I started gathering data, gathering sources, watching lectures, reading everything I could. One day a few years ago, I came out and said,

I stand by it. Not as someone who makes that conclusion reflexively or without much research. Gensler was exactly where I was and at the same time he was teaching. I think he said the same thing to me.

But you know, it’s not the early days. It’s not hard for anyone to explain the benefits.

Some crypto industry leaders have recognized the need for regulation and are taking steps to build structures and systems to address compliance requirements such as KYC. What do you think of these moves?

First of all, I think the industry is collapsing. All these venture capitalists are pouring money into it, so we can be optimistic. It’s a magic money machine. If you label everything Web3, what do you get? Exponential corporate valuation.

Look at the NFT market. Initially, I was like, “I want to buy a silly e-comic with a link to a JPEG file. Would you like to pay a lot of money for it and help someone else make more money? Here you go. ”

People want to do silly things with their money. But when I looked into it, it turned out to be an incredible industry full of scams and deceptions. None of it made sense to me. It looked like a big money laundering machine.

Suddenly there was a lot of harm in this stuff to me. The celebrities advertising it look incredibly scary and shameless.

People say we need a new regulatory framework. I can not see. You can see the existing regulatory framework.they keep saying how great everything is [but] Regulations need to be clarified. I just want to do this right. None of these entities have any transparency at all. And without that kind of transparency, you can’t have a financial system. Not safe.

I’m not a big regulation guy. But when it comes to finance, it’s not an area where people can run free.

You claim the industry is collapsing. However, it is hard to imagine that cryptocurrencies and blockchain will disappear.

That’s a very good point. what to do with this industry? Stay here. All I can say is how bad it is.

What do you hope to achieve with this conference?

The idea is to shed some light on all of these many misrepresentations and fallacies such as Web3, Crypto, Bitcoin, DeFi, NFTs and more. And we’ll focus on all the issues about why these products aren’t good.

We are all a hodgepodge of experts from different fields who come together to discuss why we believe what we believe through their lens.

None of us intend to make money by speaking at this conference. Maybe someone is making money one way or another, I don’t know. But I know that waking up in the morning to see hate and abuse on Twitter is not always the right path to business growth and profit. There are no anti-crypt factories you can work with.

From my point of view, the great thing about this conference is that for the first time in history, for the first time ever, we actually had experts coming together from all angles. Because it’s a multifaceted situation. There are hundreds of cryptocurrency conferences and they are all lovefests where everyone just sits and talks about how awesome it is.

I don’t mean to sound cynical, but it’s the truth. That’s the reality. So it’s a little antidote to the disease that currently plagues space.

Can you talk about your role in creating the Office of Internet Enforcement?

it was a long time ago. I have always been very interested in technology. I started handling a lot of tech-only cases and made a name for myself in the enforcement department as someone you could go to if you had any tech-related issues. I wrote the first set of guidelines for electronic investigations.

It started to explode. More and more cases touched the Internet. There were so many investigative issues, so many prosecution issues.I wrote a white paper that we should create an online-only office. [issues] It helps in monitoring, educating, communicating and prosecuting. Established the first online Enforcement Complaint Center. We have set up a mailbox called [email protected]. And I would open that mailbox every morning, read everything, and think about what to do with each one.

Dick Walker was a great tech-savvy director, and he said, ‘Let’s build an office.

They created the Office of Internet Enforcement and it only grew. We kept doing more and more. We had a variety of experts, including broker-dealer registration experts, tax experts, and more. I had a technician. We also had seasoned enforcement officers.

I have a picture of myself pointing to a placard outside my office that says “John Reed Stark, Director of Internet Enforcement.” You can see that he is very excited, like a little child.

Original Source