Former BTCC Exchange CEO Debates Between Pure Crypto and ICO Utility Tokens
In Debates Between Pure Crypto and ICO Utility Tokens, Former BTCC Exchange CEO Speaks Up
Utility tokens and “pure” cryptocurrencies have been largely debated, especially as regulators work to establish the ground rules. The former CEO of the BTCC Exchange, Bobby Lee, agreed to speak with a fintech news outlet called Cheddar to talk about the differences between these assets.
The longtime supporter of Bitcoin attended the Crypto Finance Conference in California, where he said,
“People, companies or investment firms can invest in Bitcoin and cryptocurrencies, [which are] native digital assets. And then there are things like tokens that are issued by groups, teams or projects that are supposed to back certain projects, certain development effort, certain applications. So those are more like securities, even though they call themselves utility tokens.”
Any tokens that are made available to consumers with an ICO are much different than Bitcoin, because they come from a central authority. This authority holds complete control over dividing up crypto assets, which Bobby Lee believes ensures that that they are centralized as they are distributed. ICOs basically take away from the entire point of getting utility tokens from ICOs, because they do not actually act as one.
Considering Lee’s position with the Bitcoin Foundation, he has said that the misclassification of utility tokens should make them more like equity investments. That puts a major line between these tokens and “native digital assets.” Lee does not feel negatively about ICO projects, but he still prefers Bitcoin, Litecoin, and Ethereum over “tokens that represent a company’s efforts and business models.”
To move the conversation a bit, the Cheddar reporter turned the discussion towards the claims made by Ripple’s Chris Larsen. He called the problem between these two sides a “religious war,” but without much of a leg to stand on. Taking an oppositional stance on this statement, Lee said,
“Well, I think he has a bit of a bias on that front… Ripple (XRP) has the reputation of being centralized, even though some (XRP) proponents claim that it is decentralized. So, I do think that it is important because the world up until Bitcoin’s invention has never seen some that is digital that is also decentralized. In the real world, things are decentralized, like water, air, gold — that’s decentralized. Whereas everything else is centralized, so in a digital world everything has been centralized up until Bitcoin.”
One of the concerns that Lee seemed to have was the way that both companies and individual parties are using the crypto verbiage. “Decentralized” is being used in a way to describe tokens that lack it, which is “dangerous, and is a waste of a great terminology.” He implied that by calling ICO projects “decentralized,” it could also have a negative effect on how investors see cryptocurrency as a whole.
Though some critics may not agree, the majority of longtime users would side with him.