As part of the Digital Currency Council’s Continuing Education partnership with Inside Bitcoins, DCC interviewed thought leaders who will be speaking at the Inside Bitcoins Conference in San Diego on December 14-16, 2015. Today, we share an interview with Jason Seibert, former General Counsel at Coin Outlet and Owner of F.J. Seibert, LLC.
Tell us about how you got interested in legal issues surrounding digital currencies.
I have a non-traditional law background. Prior to my legal career, I was a data engineer in the Air Force and for several private sector organizations. I started to really pay attention to Bitcoin in the fall of 2013 while I was running a securities fraud law practice in the state capital of Oregon. It was clear that “hacker cash” wasn’t going away. In January 2014, I was watching the morning news and saw that New York DFS was holding public hearings on regulating Bitcoin. That was the same day it was reported that Charlie Shrem was arrested at the airport. I called NYDFS and asked if I could get a seat at the hearings, and they told me they only had room left in the overflow room. I booked my tickets and flew to New York that day. I remember sitting next to American Express’ VP of Pre-Paid Credit Cards and several other high powered folks – they all wanted to know how if it was going to be regulated. I knew it wasn’t going to be a matter of if, but when. With my background in data engineering and securities law, it really seemed like a natural fit for me. Later that year, in 2014, I appeared in Federal Court to defend Trendon Shavers and Bitcoin Savings and Trust. The end result was not favorable for Mr. Shavers, but Bitcoin was declared to be money, and the SEC admitted, on the record, that Bitcoin was not a security and that they didn’t have the power to regulate it.
What are some of the biggest legal topics you tackle when working with digital currency start-ups?
Managing expectations of time from inception to success is tough. There is a lot of work to be done. The most common question “… why can’t they just do it _____ way? It would be so much easier…” is the hardest to deal with. The traditional entrepreneur genre is not interested in regulation or compliance. They are interested in growing their business. It is no different with Bitcoin start-ups. There is enormous pressure to deliver, either from internal sources, like “… a powerful need to eat this month”, or from external sources – investors. Cutting corners and bypassing regulations is never a good choice.
What do you see as some of the greatest challenges facing the digital currency industry right now?
Uncertainty and instability in the price of Bitcoin. I spoke with the CEO of a hospital the other day. He would consider accepting Bitcoin if it was stable. I spoke with a contracts negotiator at Shell Oil – same thing – stability in price and value is key. Until Bitcoin achieves stability, it won’t be truly accepted as a currency. Until then, blockchain tech will outpace innovation in the space instead of Bitcoin value.
What advice do you have for founders and start-up teams regarding compliance, risk mitigation, and regulatory uncertainty?
The other day, I was having a very interesting conversation with a 10 year-old girl who got caught hiding clothes under her bed instead of putting them in her laundry basket and hiding books under her pillow instead of putting them on the shelf. I said, “…you know, if you would have spent just as much effort doing what you were supposed to do instead of spending that same amount of effort trying to hide the fact that you didn’t, you wouldn’t be in as much trouble as you are now?” I’ll leave the name of the 10 year-old anonymous for obvious reasons.
What do you anticipate to hear from regulators in 2016?
The crystal ball question. I think Bitlicense requirements will be refined with better guidance. I want to see how the CFTC is going to flex its muscles. Finally, I would like to see one Presidential candidate answer a question about cryptocurrency.