ShapeShift Chief Legal Officer Claims “Law is Trying to Catch Up” to Crypto in Interview
Cryptocurrency is changing every day and regulatory organizations are struggling to keep up. This has left some of the world’s largest cryptocurrency companies scrambling to comply with a myriad of uncertain regulations.
It’s not easy to be a Chief Legal Officer at a crypto company these days. That’s the position held by Veronica McGregor at ShapeShift. In a recent interview with Corporate Counsel at Law.com, McGregor described how “the law is trying to catch up” with cryptocurrency, which is challenging because “technology always moves faster than law.”
McGregor is an experienced US regulatory lawyer who claims to have been a fintech specialist since before fintech was a word. The former Goodwin Procter partner joined Switzerland-based ShapeShift as its Chief Legal Officer earlier this month. It’s her first in-house role after spending years as outside counsel.
During the Corporate Counsel interview, McGregor answered questions about the uncertain world of crypto regulations, including the challenges of maintaining legal compliance in an uncertain, changing field.
Here’s what McGregor had to say about the crypto regulatory environment in Switzerland:
“It’s still such an emerging industry that some countries have crypto-specific laws, but most of them don’t. So mostly what they do is they try and sort of retrofit and cram our model into their existing laws and ask for compliance there, with the existing laws, which is not ideal. One of the things I’m trying to do is not only figure out with what we need to comply but also start a dialogue with regulators as to what makes sense for our industry.”
How did an experienced fintech lawyer suddenly find herself in the crypto space? McGregor claims her experience with cryptocurrency dates all the way back to “2009 or 2010” when the industry consisted exclusively of bitcoin. Bitcoin, of course, mined its first block in January 2009, which means McGregor was there from almost the very beginning.
“I got involved in the space back when it was just bitcoin. And that would be 2009 or 2010. That led to me doing more exploration of the space. People kept coming to me. It became this thing where people would ask, “Who knows about this?” when you work in a big firm, and I was the person. You start developing sort of a knowledge and expertise on the subject, and plus it was fascinating to me. I kept seeking out new opportunities to learn about it and got more clients in the door as a result.”
McGregor Explains the Regulatory Challenges That Need to Be Solved Moving Forward
McGregor is one of the crypto industry’s most experienced lawyers. What challenges need to be solved by the industry moving forward? What regulatory hurdles need to be surmounted?
Here’s how McGregor answered that question during her interview:
“The biggest challenges are, as with any new technology, figuring out which, if any, existing laws apply to you. And finding a way to comply with those laws, if you decide they apply to you, in such a way that you don’t destroy your business or the whole industry before it gets a chance to get off the ground.”
McGregor brings up the example of a startup that is trying to get “40-plus money transmitter licenses” before the startup even figures out which laws apply to their business. If you’re trying to get licenses before figuring out which specific licenses your business needs, then you’re already “kind of dead in the water.”
McGregor claims ShapeShift is doing its best to answer these questions by working closely with regulators. They communicate with regulators to determine which laws apply to the company. At the same time, ShapeShift educates regulators on the best path forward for the industry:
“At ShapeShift, we’re taking a look at what we think applies to us and how best to comply with it, but we also want to participate in conversations with regulators to determine which laws and regulations apply to, not just us, but the industry in general and do some education on both sides in order to achieve appropriate levels of regulation.”
ShapeShift is one of the world’s largest non-custodial cryptocurrency exchanges. The platform allows users to swap cryptoassets without giving up ownership of those assets to a centralized exchange.
Thanks to ShapeShift, you can seamlessly convert a cryptocurrency like bitcoin into a number of different ERC20 tokens and other altcoins. The Switzerland-based company was founded in 2013. Earlier this summer, ShapeShift made a surprising announcement: moving forward, the exchange would require all users to have a membership. Previously, ShapeShift was a membership-free exchange.
Being the Chief Legal Officer of any crypto company is undoubtedly challenging in 2018. As one of the crypto industry’s most experienced legal specialists, however, McGregor seems more than prepared for the challenge of making sure one of the world’s largest exchanges remains compliant. You can read Veronica McGregor’s full interview with Corporate Counsel here to learn more about the unique challenges facing the crypto industry from a legal perspective.