Leo Lucisano – partner at Decentral Park Capital
On The Brink podcast, host Matt Walsh
What is DPC
Digital asset investor focused on DEFI
Just closed $75M DeFi fund
Invest across stages from pre-token / early stage to liquid investments
CPA, legal training
Worked at:
PWC – MBS and structured products
A SoFi competitor in Silicon Valley
Challenger bank in Sweden
Wrote a popular blog post on regulations
https://decentralparkcapital.substack.com/p/the-regulatory-state-22-predictions
In near term, expect tokens to be treated as securities, regulators won’t have time or expertise to properly identify “decentralized” products
Regulators have been very aggressive and will continue to be
Stablecoin regulation is coming, fit into money market / charter regime – lowest hanging fruit
Then custody – will shape how big banks and institutional custodians move into crypto and also control current CEXes, infrastructure
For large protocols focus is consumer protection
eg, Uniswap, “soft decentralization” (DAO) – still have flag bearers / people to target
Could be a Day of reckoning – tons of SEC enforcement actions against multiple projects
Expects spot ETF by July – SEC will use it to control institutional funds flow
Growing economic incentives for tradfi (eg, Wall Street banks) to pressure regulators to clarify rules, ease their entry into crypto
Challenger banks coming into crypto – like Robinhood and Square
Fairly ingrained web of contagion in crypto now – almost impossible nut to crack, but regulators must do it anyway
Fully regulated – crypto builders are doing KYC from beginning
Fully decentralized – eg Synthetix – will do ok during this regulatory wave
NFT financialization – rapidly growing space – looks a lot like defi
Regulation’s 3 buckets
1. tax revenue
2. consumer protection
3. anti money laundering (AML)
Likely that after this wave of tough 2022 regulation, we’ll see enormous growth
Crypto lobby has really matured, started in 2021
Local politicians are embracing the crypto discussion
Becoming a single issue topic – pro-crypto is good for social engagement, political donations
“power of crypto twitter”
2022 is year of the industry growing up