Historically, Black and Brown communities have had restricted access to opportunities for generational-wealth building.<\/strong> Crypto offers a chance to redress that balance\u2026 but an opaque mess of laws and regulations around crypto services and a prohibition on certain wealth-generation opportunities are standing in the way of that happening.\u00a0<\/span><\/p>\n Controversial language in the United States\u2019 recently enacted infrastructure bill may have unintentionally contributed to that cycle. The document contains broad tax-reporting language directed at \u201cbrokers.\u201d The ambiguity of the term means it could apply to those who have nothing to do with brokerage, like miners and developers, and could also have an inequitable effect on blockchain innovators of color.<\/span><\/p>\n According to Cleve Mesidor, founder of <\/span>The National Policy Network of Women of Color in Blockchain<\/span>, \u201cThe assumption was that these miners were privileged white kids in their mansions. No, we\u2019re mining and staking. We\u2019re developing wallets, hardware and software. This burden will not hurt Binance or Kraken. The only people you hurt are the little people.\u201d Karen Hsu, a cybersecurity expert and crypto entrepreneur, further believes that the language in the legislation \u201ccould unintentionally block innovators of color out of the market.\u201d<\/span><\/p>\n Mesidor, also an author and former Barack Obama appointee, hopes to dispel the notion that blockchain innovators are predominately white men with limitless access to capital and power. She leads an annual congressional delegation to Washington of over 60 blockchain entrepreneurs and primarily meets with the Tri-Caucus (the Congressional Black Caucus, Congressional Hispanic Caucus and Congressional Asian Pacific American Caucus). Mesidor initiated the effort because she wanted these legislators to see \u201cpeople who looked like them.\u201d<\/span><\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n Delegation of Women of Color in Blockchain!<\/p>\n How it started (2019)\u2026How is going (2021)<\/p>\n Commemorate Women\u2019s History Month with a Delegation of Blockchain Industry Leaders!<\/p>\n RSVP to Join Virtually March 3-4: https:\/\/t.co\/x31vK27vgN<\/a>#WOCBlockchain<\/a> #womenintech<\/a> pic.twitter.com\/fb1UXs4adq<\/a><\/p>\n \u2014 Cleve Mesidor (@cmesi) February 27, 2021<\/a><\/p>\n<\/blockquote>\n \u00a0<\/p>\n \u00a0<\/p>\n It\u2019s not just founders of color who are potentially blocked out of the market. Federal regulations, or a lack thereof, restrict access to a litany of innovative retail investment products. With very few exceptions, leveraged tokens, crypto lending tools and all Bitcoin spot market ETFs are not permitted in the United States.<\/span><\/p>\n Proficient retail investors from all communities could benefit from these products, and they could be wealth-generating game changers for families and communities who have been locked out of the traditional system. Cryptocurrency legal and regulatory adviser Christine Trent Parker is uncertain what the right regulatory structure for those products would look like, but she believes that underserved communities deserve access to them and that those products should be offered in a regulated manner.<\/span><\/p>\n \u201cWhy would you not let people [have access] who don\u2019t have access to investment products, who don\u2019t have a portfolio of securities that they can borrow against? It\u2019s a great product.\u201d<\/span><\/p>\n<\/blockquote>\n Manasi Vora, vice president of Skynet Labs and founder of Women in Blockchain and Komorebi DAO, believes that underrepresented retail investors \u201care usually left out of amazing opportunities due to arcane laws,\u201d like the accredited investor law.<\/span><\/p>\n The Securities and Exchange Commission defines a retail investor as \u201caccredited\u201d if the individual has a gross income exceeding $200,000 or has joint income with a spouse or partner exceeding $300,000 during the past two years. Although the law was amended by Congress in 2020 to include investors with certain professional credentials, it may still be too restrictive when applied to the crypto space.<\/span><\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n Skynet 🦾 pic.twitter.com\/JGZIsmPggK<\/a><\/p>\n \u2014 manasi ☀️🍃 (@manasilvora) January 29, 2022<\/a><\/p>\n<\/blockquote>\n \u00a0<\/p>\n \u00a0<\/p>\n Komorebi DAO invests in crypto founders from underrepresented communities. Prospective members of the collective who don\u2019t meet accredited investor requirements can\u2019t participate. Vora says: \u201cWith Komorebi DAO, if the law restricts us from having accredited investors as members, then that leaves them out from all the potential value of investing in crypto companies.\u201d<\/span><\/p>\n When Hsu first entered the space in 2016, she felt that there was a lot of idealism about how cryptocurrency and blockchain could be used to serve the unbanked. She and other members of Blockchain by Women, an organization she founded, were optimistic. Many came into the space with grand visions. They hoped to build profitable companies, and Hsu wanted to help protect crypto entrepreneurs. She started the firm BlockchainIntel to provide affordable cybersecurity services to innovators in the space, including those creating products and services for underserved communities.<\/span><\/p>\n According to Hsu, large institutional investment firms like JPMorgan Chase entered the ecosystem a few years ago and began gobbling up the lion\u2019s share of the wealth. Smaller firms like Hsu\u2019s struggled to compete. She couldn\u2019t charge sustainable rates that were comparable to those paid by the big companies. Even more challenging, her customers struggled to effectively navigate complex regulatory systems concocted by state regimes and uncertain federal regulatory agencies.<\/span><\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n Hsu soon determined that many of the guidelines currently on the books had been built around the needs of the larger, well-established cryptocurrency exchanges and deep-pocketed investment firms flooding the space. With some exceptions, these rules are exactly the same or similar to those antiquated statutes that have kept the underbanked and unbanked locked out of the system and discouraged financial innovation in communities of color. Some critics of the infrastructure bill argue that <\/span>the current rules help sustain a non-level playing field where entrenched wealth and power is recirculated among those who already have it.<\/span><\/p>\n According to Parker, every state in the U.S. has a different set of rules for businesses identified as money transmitters, a subcategory of money service businesses that cryptocurrency exchanges are categorized as. Parker says, \u201cWhen you\u2019re dealing with spot market transactions, it\u2019s a state-by-state analysis of money transmitter licenses. [..] It\u2019s not even one regime. It\u2019s 50 different interpretations of what it means to be a money generator.\u201d For example, Parker believes that setting up an appropriate LLC isn\u2019t that hard. An innovative entrepreneur can do that. \u201cEvaluating 50 money transmitter licenses\u2026 that\u2019s really hard.\u201d<\/span><\/p>\n Mesidor believes that these multistate regulatory requirements and roadblocks at the federal level are \u201cburdens that Black and Latinx innovators cannot comply with that will force them out of the space.\u201d Mesidor, also an adviser to the Blockchain Association, has actively been lobbying members of Congress to embrace common-sense regulatory legislation for cryptocurrency. She believes that federal regulatory clarity will help level the playing field for entrepreneurs from underserved communities and those providing crypto services to members of those communities.<\/span><\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n \u00a0<\/span><\/p>\n \u00a0<\/p>\n If the nebulous federal regulatory effort is the primary obstacle to full inclusion, why aren\u2019t the politicians who represent underserved communities doing anything about it? Why aren\u2019t those legislators drafting bills, introducing legislation and lobbying for change?<\/span><\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n Black & Latinx industry leaders are eager to lead discussions about financial literacy, skills training, access to capital and empowering unbanked rural, urban, native communities across America.#DiversityInBlockchain<\/a><\/p>\n\n
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