I had the opportunity to meet Sari, a Balinese weaver, during a visit to a blockchain conference in Bangkok earlier this year. She was showcasing her intricate designs, each piece tokenized as an NFT, directly connecting her to buyers globally and bypassing exploitative middlemen. Sari’s story is not unique. From Myanmar to the Philippines, artists and creators are using crypto to unlock new forms of economic empowerment. When I read about BlackRock's latest pow-wow with the SEC, all I could think was: whose revolution is this, really?

Crypto Regulation: Who Really Benefits?

BlackRock, the asset management giant managing over $10 trillion, is eager to discuss crypto regulation with the SEC. They’ve recently introduced a Bitcoin ETF, IBIT. Currently, they’re looking to bring an Ethereum ETF ETHA to market, alongside having launched a USD Institutional Digital Liquidity Fund BUIDL. They're deeply invested, literally and figuratively. Next, they talk about the tokenization of assets, staking assets, and their process to get their crypto ETPs approved. All this is fine and dandy, but I'm left with a nagging question: will these regulations truly benefit artists like Sari, or will they primarily serve to fortify Wall Street's grip on yet another emerging market?

Think about it. BlackRock's interest isn't just about "innovation." It's about control. It’s all in just directing the path of that capital with their existing frameworks. They claim that regulation is needed for investor protection. History has shown that these types of regulations tend to just raise entry barriers, a fact which benefits big players such as BlackRock, which can maneuver through the thick legal jungle. Without more thought, we risk creating an approved crypto projects only system. If these projects go that route, they’ll have to play ball with the Wall Street establishment, killing the very decentralized, democratizing potential that drew so many of us to the crypto space in the first place.

In-Kind Redemptions: A Wolf in Sheep's Clothing?

For months now, BlackRock has been running around touting the technicalities of in-kind redemptions for crypto ETPs, laying out how current cash models would convert. Sounds innocuous, right? This is where the serendipitous relationships develop. Consider the traditional art world. For years, galleries and auction houses have maintained these gatekeeping powers, set the value of work and taken senselessly high commissions from artists. Without question, in practice crypto gives artists and creators a more direct line to collectors, removing the gatekeepers. If the leading crypto investment vehicles become more complex financial instruments, the smart money from traditional finance will take over their control. Are we really shaking things up, or just remaking the same old system?

The anxiety here is real. Will these “innovations” just create new opportunities for wealth extraction? Or will they do better, not just by artists and creators in Southeast Asia, but everywhere, taking them further than where they started? Will that promise of in-kind redemptions really deliver the necessary liquidity and accessibility to ensure that the average person can participate? Or will it just serve the biggest institutional investors who are best able to navigate the opaque financial mazes?

Decentralization or Centralized Control?

Specifically, BlackRock has requested for interim standards to be established for crypto ETP issuers. Specifically, they’re discussing Section 6(b) of the Exchange Act which has to do with maintaining fair and orderly markets and protection of investors. These are valid concerns! Nobody is advocating for a Wild West of scams and rug pulls. Who gets to define "market integrity?" Who decides what constitutes "investor protection?" When Wall Street is writing the rules, their interests’ priorities always come first. This kind of shortsightedness is the kind of thing that stifles innovation and reinforces power structures.

Sari’s story is a timely and humbling reminder of just what amazing potential crypto can provide. It empowers artists to reach their audiences directly, circumvent economically exploitative systems and industries, and build a fairer global economy in the process. We shouldn’t allow that vision to be hijacked by Wall Street. We need to hold BlackRock and the SEC accountable, ensuring that crypto regulation truly benefits everyone, not just the powerful few. The onus is on us, the public interest community, to craft a future where crypto empowers rather than exploits. Let’s continue to invest in grassroots initiatives, support the voices of artists and creators, and forge new communities together with blockchain to realize its potential. The future of crypto is too important to let Wall Street take control.

  • Support Decentralized Governance: Advocate for blockchain projects with robust decentralized governance models that allow the community to shape the rules.
  • Promote Open-Source Development: Champion open-source blockchain technologies that are transparent, auditable, and accessible to all.
  • Demand Financial Literacy: Invest in financial literacy initiatives, especially in emerging markets, to empower individuals to make informed decisions about crypto investments.

Sari's story is a reminder of the awe and potential that crypto holds – the power to connect artists directly with their audiences, to bypass exploitative systems, and to create a more equitable global economy. But we can't let that vision be co-opted by Wall Street. We need to hold BlackRock and the SEC accountable, ensuring that crypto regulation truly benefits everyone, not just the powerful few. The responsibility lies with us, the community, to build a future where crypto empowers, not exploits. Let's support grassroots initiatives, amplify the voices of artists and creators, and build strong communities around blockchain technology. Because the future of crypto isn't something we can afford to leave to Wall Street.