Join us on Wednesday 22 June at 6 p.m. for networking drinks and a discussion on recent volatilities in the decentralised finance (DeFi) market, the regulatory implications likely to result from them and factors for success in this fast-moving landscape.
DeFi describes a system utilising cryptocurrencies or digital tokens held and exchanged on computer networks, or blockchains, that verify holdings and transactions. Part of the popular appeal of DeFi solutions is that historically they have not been controlled by governments, central banks or even commercial banks. As a result, one could consider them a hedge against currency inflation and many have seen them as a route to avoid financial services and other regulatory regimes. Bitcoin, the most well-known cryptocurrency, is just the tip of the iceberg, as multiple new networks and token models have developed, some with pegs to dollars or euros called stable coins, and an entire trading ecosystem has developed including many of the tools and features of traditional regimes, like derivatives, exchanges, analysts and reports, often launched or offered in jurisdictions where the relevant regulatory regime is unclear at best.
Over the past couple of years, the industry appeared to be ready to become one of the great online success stories. Over 62 crypto startups are worth US$1 billion or more, and in 2021 over US$25 billion in venture funding went into such firms through circa 1,700 deals. Mainline banks and services, including JPMorgan Chase and PayPal, now feature crypto services. The past month, however, the picture has looked less rosy. First, Luna, a digital coin, lost all of its value after Terra, supposedly a stable coin linked to the dollar, lost its peg and most of its value. Other coins lost substantial value shortly thereafter. More recently, Bitcoin and Ether valuations have dropped, calling into question the solvency of trading firms with derivatives exposure. Calls for increased regulatory oversight have naturally followed.
What is happening in these markets? What will recent developments mean for the future of this industry? What form might regulation take?
We would like to invite you to an evening panel discussion of these questions. The event will include a presentation by MEV Capital, a digital asset management and research body operating in the public blockchain environment with a particular focus on DeFi, followed by a moderated panel consisting of prominent founders, investors and advisors in the space. The event will take place at the offices of Squire Patton Boggs (UK) LLP, Premier Place (2 & A Half Devonshire Square), London EC2M 4UJ.