'The Law Is Trying to Catch Up': A Chat With Newly Minted Crypto CLO Veronica McGregor of ShapeShift
"The biggest challenges are, as with any new technology, figuring out which, if any, existing laws apply to you," said the former Goodwin Procter lawyer. "And finding a way to comply with those laws, if you decide they apply to you, in such a way that you don't destroy your business or the whole industry before it gets a chance to get off the ground."
September 20, 2018 at 12:54 PM
5 minute read
While many attorneys are newer entrants into the crypto space, Veronica McGregor has been a fintech lawyer “since before 'fintech' was a word.”
The former Goodwin Procter partner recently joined Switzerland-based cryptocurrency company ShapeShift as chief legal officer. It's her first in-house role, but her years as outside counsel in Goodwin's financial industry, banking, consumer financial services and fintech practices in San Francisco will no doubt serve her well.
Corporate Counsel recently spoke with McGregor about how to break into crypto and the industry's numerous regulatory challenges. This interview has been edited for clarity and length.
Corporate Counsel: ShapeShift is Switzerland-based. What's the regulatory landscape like there?
Veronica McGregor: I am a U.S. regulatory lawyer, and so I definitely know a lot about the patchwork minefield of U.S. laws. We have EU-specific counsel to guide us through what we need to know there.
It's still such an emerging industry that some countries have crypto-specific laws, but most of them don't. So mostly what they do is they try and sort of retrofit and cram our model into their existing laws and ask for compliance there, with the existing laws, which is not ideal. One of the things I'm trying to do is not only figure out with what we need to comply but also start a dialogue with regulators as to what makes sense for our industry.
How did you get involved in the crypto space?
I got involved in the space back when it was just bitcoin. And that would be 2009 or 2010.
That led to me doing more exploration of the space. People kept coming to me. It became this thing where people would ask, “Who knows about this?” when you work in a big firm, and I was the person. You start developing sort of a knowledge and expertise on the subject, and plus it was fascinating to me. I kept seeking out new opportunities to learn about it and got more clients in the door as a result.
How did you start to learn about the field, when you first started working on crypto?
Reading blog posts. If you want to learn about the law, there are some law firms that have pretty good crypto practices. And then there's attending meetups, things like that. That's how you learn, not by reading books but by talking to people. There are also a couple educational resources, like Blockchain University. You can attend seminars just to learn about the technology itself.
But the technology and the law are different things. There's increasingly more law, but it's not like property law, or something that's been around forever. It's brand new. The law is trying to catch up. Technology always moves faster than law. Almost anything always moves faster than law.
You said that you began to learn more about crypto because you found it fascinating. What aspects of the industry drew you in?
I started my career as essentially a payments lawyer at Morrison & Foerster, doing things like credit cards, debit cards, prepaid stuff. Then I moved into the newfangled stuff happening at the time, like PayPal. So my line is I've been a fintech lawyer since before “fintech” was a word.
What are some regulatory challenges you see in the crypto industry right now?
The biggest challenges are, as with any new technology, figuring out which, if any, existing laws apply to you. And finding a way to comply with those laws, if you decide they apply to you, in such a way that you don't destroy your business or the whole industry before it gets a chance to get off the ground.
That's the typical problem with fintech companies, or any company entering a regulated space, but I happen to know this one. If you suddenly find yourself trying to get 40-plus money transmitter licenses before you even have a chance to figure out if your business will work, you're kind of dead in the water.
At ShapeShift, we're taking a look at what we think applies to us and how best to comply with it, but we also want to participate in conversations with regulators to determine which laws and regulations apply to, not just us, but the industry in general and do some education on both sides in order to achieve appropriate levels of regulation.
This is your first in-house role. How did you decide to make the move?
The reason I made the decision was, my entire legal career has been in Big Law, 20 years of that. While I really loved it and got amazing education, mentors and opportunities, I have a business brain.
What I really wanted to do, what I'm best at, is spot and solve problems—spot issues before they become problems and problems before they become crises and deal with them in an efficient, practical manner. I think that's best done in-house.
Plus, this is just a great opportunity. I really like the team at ShapeShift, I like being on the cutting edge of technology. This is an industry that has long been interesting to me. I'd been exploring the idea of going in-house for a while. So maybe I could have gone to a more traditional financial services company, but this is much more interesting to me.
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