I recently joined hundreds of crypto industry colleagues at the Blockworks Digital Asset Summit in New York City. Informational sessions were geared toward institutional and decentralized-finance-minded professionals, as industry leaders and esteemed guest speakers hosted seminars on topics ranging from the Ethereum merge to regulation and blockchain security.
With crypto being such a new space for many people — and a volatile market for all — investors, CEOs and industry tycoons attended and participated in the sessions, looking to discuss what’s coming next in the market and how to best prepare ourselves. Below are my three key takeaways.
1. Regulation is a key ingredient for a safer crypto environment
As crypto begins to assimilate into everyday life, consumer protection is necessary. We’ve seen many conversations between the SEC and CFTC, debating whether or not tokens are securities or commodities; as well as experts fighting over whether or not the U.S. has the jurisdiction to control digital assets for users who aren’t based in this country.
It’s critical for investors and companies alike to stay informed about the ever-changing global regulation for crypto as mass adoption continues.
2. Invest in security to protect against new dogs using old tricks
DeFi security has emerged as a prominent topic in the space, with crypto companies being targeted by cyber hacks costing them hundreds of millions of dollars. Just this week, a million-dollar hack was reported by crypto wallet BitKeep. DeFi security experts at the Digital Asset Summit noted that many of these scams and hacks originated from phishing emails. Yes, those same emails our beloved IT departments constantly warn us about.
In a panel addressing cross-chain hacks and DeFi security, panelists Limaris Torres, Coby Moran and Jonathan Claudius mentioned that we’re still immature when it comes to security in Web3, as many blockchain developers are new to crypto. Scam attempts in Web2 have generally been more obvious to detect, such as the infamous emails from a supposed “Nigerian prince” asking for your bank account number or a small advance payment. But with Web3, scammers aren’t as established and tend to be more creative. Furthermore, many people in crypto might be too naive in thinking the threat isn’t significant.
The panelists suggested that crypto companies should be educating their employees on security measures through training sessions like “lunch & learns,” and designing with security as a primary consideration. They also mentioned that institutional investors, in particular, need to ensure they invest in companies that are investing in their own security.
3. Impact of ESG phenomenon on crypto industry
ESG investing has remained top of mind for investors, and the Ethereum merge last month promised a better environmental impact than its previous form. Meanwhile, recent weeks have seen financial industry giants like BlackRock offer access to Bitcoin for institutions and high-net-worth individuals, Nasdaq launch its own crypto custody solution, Fidelity offer Bitcoin custody and retirement account access, and Citadel announce a crypto trading platform. With crypto becoming more “ESG-compliant,” it’s only a matter of time before additional institutions and investors become heavily invested in the crypto space.
Overall, crypto is expanding at a massive rate as adoption becomes more mainstream. Most financial institutions have at least started researching the available opportunities. As interest continues to grow, crypto and crypto-adjacent companies should be looking into how they can showcase their own brand value through media relations.
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