Global Digital Finance, a cryptocurrency industry membership group, announced Thursday that crypto trading platform ShapeShift Global Ltd. has joined its advisory council. ShapeShift's chief legal officer, Veronica McGregor, said she will likely be the point person for the company on the council.

McGregor spoke to Corporate Counsel about her role at ShapeShift based in San Francisco, regulatory challenges in the industry and the importance of being involved with Global Digital Finance.

This conversation has been edited for length and clarity.

Corporate Counsel: What are your responsibilities as the chief legal officer of ShapeShift?

Veronica McGregor: My role as CLO encompasses global legal strategy, regulatory affairs and government relations. I have a general counsel who works under me who does more of the day-to-day corporate governance work that has to get done.

CC: What are some of the challenges this industry faces from your perspective?

Veronica McGregor, chief legal officer at ShapeShift.

VM: We have a number of challenges, in some way based on the fact that everything is so new, we don't get to have one regulator. We have several that have weighed in. In the U.S., there is FinCEN [Financial Crimes Enforcement Network], the SEC [Securities and Exchange Commission] and the CFTC [Commodity Futures Trading Commission]. We don't just get to pick a regulator; we have several we have to think about.

The SEC is particularly challenging because they initially came out with the Howey Test which said what we need to look at when we're reviewing assets to list. There has been some other guidance and some enforcement actions and case law. We don't have hard-and-fast regulation that has gone through the notice and comment period. What we have is cobbled-together patchwork of things we need to think about. We would much prefer a regular regulatory process with a comment period.

CC: Is the purpose of the Global Digital Finance to help create more hard-and-fast rules for the industry?

VM: They are also a standard-setting body. Mostly what they are is a group that is trying to set standards across the industry and educate and work with, in a collaborative way, policymakers and industry leaders. That is how they think is the best way to do it and I agree. Part of the reason that regulation is not hard and fast in this area, and also other emerging industries in tech, is because those regulators may not understand all of the technical details and nuances of the industry. It helps to spend some time looking through it with them.

CC: Why is it important that ShapeShift be involved with Global Digital Finance?

VM: We definitely want to be a part of the education process and the collaboration process. Everyone wants a seat at the table if they're going to be affected by policy and regulation and we're no different. We would like some hard-and-fast regulation to rely on and would like to be a part of the creating of that regulation.  

CC: What kind of regulation or guidance would you like to see in the U.S. for the industry?

VM: In the U.S., we need a little bit more clarity on how FinCEN would like us to implement some of their rules and taking into account how the technology works. Not just taking old rules and applying to the new technology. That is simply not a match. We would like regulations from the SEC that are easier to interpret when it comes to reviewing assets.

I can't really say what kind of regulation I'd like because anyone will say they would like less regulation. No one likes regulation, but it's something that we need in order to achieve policy ends. I'm just looking for technology and business model appropriate regulations for our industry.

CC: Is the ultimate goal to make global regulations for the industry come closer together rather than have a patchwork of different regulations?

VM: In the U.S., in many cases, we have to deal with federal law and then there are a bunch of state laws we have to deal with. It would be nice if there was some sort of uniform way to comply with everything at the same time. Rather than taking the lowest common denominator, whether it's appropriate or not, and complying with that just because that covers all of your bases. That may not be the best and most appropriate law and regulation for the industry.

Regulation is sort of necessarily reactive. It would be nice if it moved a little faster and we had more input rather than taking old rules and applying them to the new industry.