'This Is Really a Moment in the Spotlight for Bitcoin': A Q&A With Crypto GC Marco Santori
Santori, who started a new job as the top lawyer for crypto exchange firm Kraken earlier this month, discusses how COVID-19 is affecting his industry, his top concerns, and trends he expects to encounter over the next year.
April 20, 2020 at 01:06 PM
5 minute read
As the coronavirus outbreak altered life outside his office in New York, digital currency law guru Marco Santori got to work earlier this month at his new job as chief legal officer for cryptocurrency exchange Kraken.
Kraken is headquartered in San Francisco and was founded in 2011, about a year before Santori caught the "Bitcoin bug." Within a few months, his interest spurred him to join the Bitcoin Foundation. Soon, he was advising clients navigating the nascent world of crypto regulation.
In 2014, he entered Big Law as a fintech-focused partner for Pillsbury Winthrop Shaw Pittman and, two years later, joined Cooley, also as a partner. He left private practice in 2018, when he took the reins of Blockchain.com's legal department.
Santori spoke Monday with Corporate Counsel about how the COVID-19 pandemic is affecting the crypto industry, his top concerns at the moment, and trends that he expects to encounter over the next year or so. The conversation has been edited for clarity and length.
Corporate Counsel: Did you consider waiting until the coronavirus pandemic had passed to join Kraken?
Marco Santori: The thought never even crossed my mind. And maybe it's something endemic to crypto in that it just doesn't seem to stop for this kind of stuff. Maybe it's because it doesn't even really exist in the meet space. Kraken's business has really taken off despite the coronavirus pandemic and, frankly, flourished either despite it or because of it. There was never really a question of whether we should wait to let this all blow over. The march in innovation here stops for no one.
CC: That's interesting. Talk more about how the pandemic might be affecting the crypto industry right now?
MS: I think that specifically because of the CARES [Coronavirus Aid, Relief and Economic Security] Act and the implementation of modern monetary theory around the world that the pandemic has spurred—that is to say the unprecedented printing of fiat government money—people are starting to pay attention to the consequences of that kind of activity and, I think, looking specifically at Bitcoin as an example of an alternative to that. It's something of a perfect storm for Bitcoin right now. There are of course lots of different cryptocurrencies out there and crypto assets out there. But this is really a moment in the spotlight for Bitcoin in particular as an asset whose supply is fixed and reliable and not subject to political whims. There's something attractive about that, and we've seen as an industry not only exchange volumes but also real transaction volumes increase significantly over the last couple of months.
CC: To what extent are crypto firms starting to build out their legal departments? Are more firms looking for GCs now?
MS: I think over the last year in particular we've started to see crypto companies get serious about their legal game. Kraken certainly has been serious about its legal game. We're looking to hire new lawyers across the spectrum of practices. The reality over the last several years has been crypto companies starting to come to grips with their legal requirements. Kraken was way out ahead of that and has had general counsels before. I like to think that I'm carrying on a tradition of understanding the power that the law can have over innovative young companies.
CC: Why join Kraken?
MS: There are lots of crypto companies and companies that offer exposure to the crypto space on the day-to-day. But there are few, I think, who have a developed track record of trust that Kraken has, particularly over the long term and staying true to its principles. Kraken really has been a shining star in the industry and a bright spot in a sometimes chaotic space.
CC: As the GC of a crypto firm, what are your top concerns at the moment?
MS: My concerns continue to be regulatory- and policy-focused in terms of the matters that I know really need attention. And that's true across the industry. The regulatory landscape for crypto is yet undeveloped. It's something I've been involved in since 2012, before there were any laws that applied to crypto. Today, the No. 1 issue on crypto GCs' minds should be policy. There is so much developing law here that it has to be top of mind. There, of course, will always be the intellectual property and [human resources] considerations that span industries. But when it comes to the core business of the company, nothing really is as widely applicable as new regulatory developments.
CC: What trends are you anticipating in your industry over the next year or so?
MS: I expect to see the common law in particular develop around the regulatory white spaces that have been left over the years. I expect that it will probably be the courts and not Congress to create new sources of law for the industry over the next year or two. I think regulators will continue to have a strong hand in guiding new rules. But in terms of the kind of cases that are pending right now in the courts and Congress' comparably slow march of progress, you're going to see a lot of new development come from judges and not congressmen over the next couple of years.
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