Regulating Blockchain Innovation: The Balance Between Regulations & Disruption

While blockchain technology has the potential to revolutionize the world, the ecosystem is still very much in its infancy. To allow innovation to thrive, it’s important to set the right environment. The lack of regulation and — on the flip-side — over-regulations caused disruption and false-starts in the space.

How do we find balance between regulation and innovation? How much regulation is necessary until it becomes an outright hindrance? In this article, we discuss these queries in comparison with other ecosystems, while particularly focusing on South East Asia.

This topic was discussed during a panel at Beyond Blocks Summit Seoul ’18.

Governance & ICOs
— The Balance Between Regulations and Disruption

Speakers (left to right):
Maja Vujinovic, CEO, OGroup
Joshua Ho, Co-Founder, QCP Capital
Moderator: Nikola Pavesic, Head of Special Operations (Nikkei)
Loretta Joseph, Industry Chair, Australian Digital Commerce Association
Samuel Yim, Attorney, Kim & Chang

Regulation is a highly discussed topic when it comes to blockchain and cryptocurrencies, and it seems like governments are constantly shifting their stance on the matter. At this point in time, all regulators can do is classify certain actions or protocols as “risky” – they cannot merely tell people to not invest in technology.  Having either heavy regulations or a lack of regulations won’t have a positive effect on the ecosystem.

One interesting country –  (when) talking about the stance on regulations – is China. Read more about the current stance of Asian and Western countries on our other blogpost Beyond Blocks Blog on Regulations: East vs West

If the rules are clear-cut, allowing for the opportunity for new innovation to thrive, we believe most people will take part and just go with it.

Maja Vujinovic feels that in some ways, regulators are way behind in their thinking, and many laws need to be re-looked at (to drive innovation).

Regarding Securities v.s. Utility;
Expectation of profit → you’re at risk

The panelists also gave some advice on how to deal with legislators:

  • Maja Vujinovic: “Know and be clear of what you’re asking from the government
    — what are you trying to get them to change?”
  • Loretta Joseph: “Find a use case that the government will work on with you”.
  • Samuel Yim: “Legislation is not a mathematical process; it takes a lot of trial and error, and legislators have to understand the technology as well, which is not an easy thing to do. It’s unfair to rush them — and regulators these days have an open, positive stance”.
  • Joshua Ho: “With Uber, we got shut down many times.”

On Investor Insights — Equity vs. Tokens 

“Regulation is bad” — Michael Arrington, and “Not all regulation is bad, but bad regulation is terrible” — David Lee

Elaborating on his statement, Arrington said: “There’s a lot of bad stuff happening that needs to be regulated, but no-regulations also caused all of this creativity. …Try to regulate just the really bad stuff”. 

On the same panel, Dovey Wan added: “I’m not pro-regulation, but it is necessary to protect retail investors from fraud.”

The uncertainty is still lingering over, but the ‘consensus’ here is/was that ‘sensible’ regulations are coming soon. However, much more time and close collaboration is needed in order to clear the uncertainty. Regulators are working on frameworks and putting a conscious effort into engaging and understanding what’s happening and needed in the space. Everyone wants a healthy and balanced ecosystem to work and grow in.

At Beyond Blocks Summit Seoul, we also did an interview with FinTech advisor to the Bermuda Government and Industry Chair of the Australian Digital Commerce Association; Loretta Joseph.

— What do you think is the way to go in terms of regulation?


A new approach

An interesting new development (related to this subject) is the STO trend. STOs are a new and legitimate way of funding blockchain innovation. As the market gets more sophisticated, the investors will express a greater demand for security tokens because they offer them governance and protection.

Security Token Offerings (STOs) are structured to be more fraud-proof and to meet regulatory criteria from the beginning, avoiding the legal liability that many ICOs are facing today.

Read more on the topic in our previous blog.
STOs v.s. ICOs

We’ll talk more about this subject at Beyond Blocks Summit Bangkok in the ‘Regulating Blockchain Innovation — necessity or hindrance?’ panel.


Extra: We just uploaded our interview with moderator Nikola Pavesic. Hear what he has to say on Beyond Blocks in the video below!


Beyond Blocks will be hosting the next major blockchain conference in the heart of Bangkok, at the InterContinental hotel. After this sold-out, record-breaking event in Seoul, the momentum continues it’s way to Bangkok, where the world will witness exactly why Southeast Asia is the region on the rise for blockchain innovation.

Why you need to be at Summit Bangkok:

– Full two-day access to the conference and exhibitions
– World-class speakers and industry leaders
– Meetups, workshops and amazing networking opportunities
– Because Bangkok is one of the liveliest cities in Southeast Asia!


Beyond Blocks Summit Bangkok 2018

  • Dates: November 26–27, 2018 (2 days)
  • Venue: The InterContinental Bangkok
  • Tickets: Visit the official Beyond Blocks Summit Bangkok website now to book your ticket.
  • Sponsor or Media? Reach out to us at contact@beyondblocks.com

Beyond Blocks Blockchain Week 2018

  • Dates: November 26–30, 2018 (5 days)
  • Location: Various locations in Bangkok
  • Tickets: Visit the official Beyond Blocks Blockchain Week website now to see the events.
  • Want to host a meet-up? Reach out to us at contact@beyondblocks.com