An Interview with Grant Fondo, WeTrust Legal Counsel

Hi Grant, could you tell us a bit about your background?

I’m a Partner at Goodwin Proctor in our Silicon Valley office, focusing on securities litigation and white collar defense. I am also Chair of the Digital Currency and Blockchain practices at Goodwin Proctor. I was formerly an Asssitant US Attorney, a role where I prosecuted white collar and drug cases. I am also a Founding Member and Board Member of the Digital Currency and Defense Ledger Coalition.

How would you rate the US legal system’s acceptance of cryptocurrency projects?

I would say right now it’s just fair, but it’s improving. One of the measures of this is how much of the cryptocurrency industry is abroad, even though those people would prefer to be in the US. Concerns with regulatory issues and government oversight and uncertainty often force these cryptocurrency projects abroad. The regulatory environment is uncertain but getting better, however it does not move quickly and can be punitive. Often, instead of explaining how things should be changed, the agencies come in and say “Here’s a hammer, we’re going to make you stop.”

The US legal system has made it costly to be innovative in this space, and is not particularly sympathetic to startups. That being said, government and regulators are light years ahead of where they were 2 to 3 years ago, are trying to be more crypto-friendly, and are trying to understand cryptocurrencies more. However, there’s still a lot of uncertainty and concerns about the impact to consumers, as we saw with the recent rejection of the Bitcoin ETF.

What are your thoughts on cryptocurrencies and the Blockchain space?

I think cryptocurrencies and blockchain are a fascinating space. I first got involved 3 to 4 years ago, when the state of things were was still in semi-anarchy, and I watched the transformation of it. One of the reasons it’s been interesting to me is the tremendous amount of highly intelligent, motivated,and free thinking people working in the space. Back when I started there was a belief, and there still is a belief, that this is a transformative technology. Cryptocurrencies are extraordinarily global and breaking down borders, and we’re already seeing a shift from the original focus on digital currencies to a focus on technology. The digital currency aspect is here to stay, but the technology is morphing into fantastic and different applciations.. We’re just in the beginning stages of figuring out applications of that.

What are the major legal roadblocks to greater acceptance of cryptocurrencies in the US?

One of the big things is, you need more mainstream adoption. One of the reasons government is much more open to cryptocurrencies and blockchain compared to two years ago is because consumers and businesses are demanding it. It’s like Uber, which encountered a whole host of legal trouble and fights, but also eventually had regulatory adoption because so many consumers want that type of product. Cryptocurrencies are not mainstream yet, but as they make gains and as blockchain becomes more mainstream, regulators will have to adapt.

The other concerns are about visibility, primarily the government’s fear that blockchain will be used where they don’t have visibility. Like anything else, such as the Internet and banks, the blockchain raises concerns of criminal activity. There’s some confusing regulatory oversight, with regulators like the FCC, SEC, FinCEN, CFTC, and state regulators all in the space. With the recent explosion of businesses using blockchain in appropriate manners, the government has become less concerned about criminal activity. I’m seeing a lot of really great uses of this technology, which is helping a lot, and I hope to see more great uses.

Thanks for chatting with us, Grant!