Yes, the bottom line is that it's all innovation theatre. That said, there are genuine efforts, mostly at grassroots levels, being done by the early Bitcoin and open source pioneers in Argentina, Brazil and Chile. More recently, other cross-blockchain, enterprise-focused, promoters have begun to emerge in Mexico, Colombia and Peru (google them).

It is very salutary for the industry as a whole for securities and commodities regulators to be focusing on fraud right now. As they should, they are looking at the promises and representations being made to consumers and investors, and are trying to weed out the obvious scams and exaggerated claimants. It’s somewhat reassuring to see them taking this approach, given the sheer number of projects making unrealistic claims or misrepresenting obvious investment contracts as utility or consumer tokens. Regulators have repeatedly stated in the past few months that when a token fits the conditions of the Howie test [“an investment contract is “a contract, transaction or scheme whereby [1] a person invests his money [2] in a common enterprise and [3] is led to expect profits solely from the efforts of the promoter or a third party.”], it is an investment contract subject to federal securities regulations.

The challenge for both regulators and entrepreneurs is that some of the digital cryptographically protected units of value known as tokens that are emerging have a dual nature: they’re both consumptive because they grant access to a technology service, for example, and at the same time provide an investment opportunity for purchasers. There is today globally a legal vacuum with respect to certain tokens that have a strong utility and consumptive value because they don’t fully fit the definition of ‘investment contract’ under Howie or its international equivalents. So regulators globally should at some point clarify whether and how these unique, hybrid tokens should be regulated, bearing in mind that they’re a formidable innovation that could have an enormous positive impact on society.

Yes, I have. Several selected ones whom I get to know and trust after a series of conversations and considerable research (what everyone should do, I might add).

I cannot recommend anyone because this is new territory and the legal opinions so far rendered have yet to be tested in court.

Nobody can claim to be an expert (let alone junior lawyers that did not know what money transmission was four years ago). It all depends on the risk appetite of the client, and the open-mindedness and forethought of the advisor. And on everyone's reading comprehension and research skills, of course.

 

My read of the political tea leaves is that the future does not look good for public/open blockchains under Trump. It is likely that "Blockchain" in general will continue to spearhead the fintech revolution, but with the primary goal of reducing costs for the dominant intermediaries. From the point of view of policy, regulation and enforcement, however, private/closed blockchains will continue to be favored over public/open blockchains. The expectation of a regulatory sandbox in the US is naive. Only the well-funded and well-managed companies will be able to comply with the onerous consumer protection, safety and soundness and anti-crime requirements that the US will impose on participating entities. Fintech innovation will be easier elsewhere than in the United States, as long as the innovators don't touch the USD or serve US consumers or investors. And let's get prepared for the new administration stepping up the war against terrorism, which will put pressure on public/open blockchains to incorporate increasingly restrictive safeguards.

Bitcoin as an alternative payment system is theoretically good for any value transfer in any industry. I say theoretically because there are a lot of constraints that impede its adoption, of which regulation is probably the most significant.

The uncertainty and controversy around Bitcoin would be highly compounded if it were used as a solution for the Cannabis industry. In fact, it already has proven lethal for at least one a company that was unable to reaise VC money in spite of having a great team and product.

A lot of things that are hard to change -policy, law, regulation, law enforcement attitudes- would need to change for this to be a viable combination.  Of course, entrepreneurs always have the choice of ignoring these concerns and ask for permission and deal with the consequences after the fact.

Depending on the nature of your business, the concern you express can be a matter of choice (if you're not a regulated financial institution, for example) or a matter of obligation (if you are a regulated entity subject to obligatory compliance). In general, it is the payment processor whose plugin you're utilizing to capture bitcoins that has the responsibility and technical capabilities to minimize the risks that illegitimate money is being used to purchase your product or service. Of course, you also have the option to implement additional controls of your own. Deterrents for criminals include forcing people to submit proof of identification and address, and verifying them (a process popularly known as Know Your Customer or KYC), as well as running the incoming bitcoins through an analytics platform featuring a risk score, or some other form of taint analysis. Regulated entities, such as payment processors, are mandated to implement deterrent and detective tools and techniques that are risk-based, reasonable and effective. As a merchant you should partner with someone with high technical expertise and capabilities and who is committed to implementing the latest best practices available.