{"id":40335,"date":"2023-07-25T14:47:28","date_gmt":"2023-07-25T18:47:28","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/crypto\/cryptos-early-innovator-turns-advocate-for-compliance-the-charlie-shrem-saga\/"},"modified":"2023-07-25T14:47:29","modified_gmt":"2023-07-25T18:47:29","slug":"cryptos-early-innovator-turns-advocate-for-compliance-the-charlie-shrem-saga","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=40335","title":{"rendered":"Crypto’s Early Innovator Turns Advocate for Compliance: The Charlie Shrem Saga"},"content":{"rendered":"
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Charlie Shrem \u2013 founder of the fallen Bitcoin (BTC) exchange Bitshrem \u2013 has pivoted to being a voice for regulatory compliance after being jailed for crypto violations eight years ago.<\/p>\n

The exchange co-founder is now a general partner at Druid Ventures, an early-stage crypto VC firm providing growth and strategic advisory services.<\/p>\n

\u201cThere\u2019s a whole bunch of people out there wrestling with the crypto compliance beast, trying to figure it all out with their lawyers,\u201d Shrem told the Wall Street Journal (WSJ)<\/i>. \u201cThat\u2019s where I come in, helping them get their ducks in a row.\u201d<\/p>\n

Having founded Bitshrem in 2011, the early Bitcoin investor\u2019s company surged in trading volume in 2013 as Bitcoin\u2019s price rallied from roughly $100 to over $1000 by year-end. It then received a $1.5 million investment from Winklevoss Capital to help scale operations.<\/p>\n

However, the ex-CEO found himself jailed in 2015 on charges of operating an unlicensed money-transmitting business, and for allegedly attempting to launder over $1 million through the defunct darknet marketplace Silk Road. He spent two years behind bars.<\/p>\n

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Shrem said that while he didn\u2019t expect to return to crypto after his time in jail, he reconsidered the way he could affect the industry by pushing it toward compliance. Byte Federal, for instance, is a Bitcoin ATM operator that he says he is proud to have encouraged to acquire a money transmitter license.<\/p>\n

While Byte Federal co-founder Lennart Lopin cannot recall having received direct regulatory advice from Shrem, he acknowledged how Shrem\u2019s personal story affected his firm\u2019s motivation to seek compliance. He said:<\/p>\n

\u201c[Shrem\u2019s] arrest was one of the moments where everybody started to think that we live in an environment of rules and laws.\u201d<\/p>\n

Shrem said he ended up in prison due to his former distaste for compliance in general \u2013 but he\u2019s now learned his lesson: \u201cEven if you guys are small, you don\u2019t want to be on the wrong side of things,\u201d he said.<\/p>\n

Crypto Rules Still Hazy<\/h2>\n

The crypto industry in the United States is still working out a clear ruleset \u2013 particularly around which coins qualify as securities, and whether or not they can be listed on crypto exchanges.<\/p>\n

The Securities and Exchange Commission (SEC) sued Binance and Coinbase last month for listing multiple unregistered securities, some of which allegedly include BNB, Binance USD (BUSD), Solana (SOL), Cardano (ADA), and Polygon (MATIC).<\/p>\n

Industry critics say that the SEC has provided no clarity on how to know which cryptos are securities, nor has it provided a clear pathway for firms to register their securities products in the first place.<\/p>\n

Crypto proponents are bullish that the final ruling in SEC V. Ripple this month may have established a clear legal precedent for crypto firms. The case\u2019s judge deemed that XRP is not itself a security, nor are secondary market sales of the asset. \u00a0\u00a0
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