The crypto industry must do more to promote encryption, says Meltem Demirors

“I like to call myself a future, or aspiring, cult leader,” Meltem Demirors, chief strategy officer of CoinShares — a publicly listed investment firm managing around $5 billion in assets — told Cointelegraph. 

Demirors, who first entered the Bitcoin (BTC) space in late 2012, further mentioned that it has been “fun to see how big the crypto sector has become,” noting that people from all walks of life are now interested in the cryptocurrency space. As such, Demirors explained that “crypto cults” are bringing people together in a positive manner, especially since it gives people a sense of purpose and belonging. 

When it comes to regulations — one of the most important topics facing the crypto industry today — Demirors expressed skepticism. “Having been in this industry professionally for eight years, I’m tired of talking about regulations, particularly in the United States,” she said. While U.S. regulators continue to pass frameworks around the treatment of digital assets, Demirors pointed out that there has been “too much talk and not enough cogent action.” Moreover, Demirors remarked that a number of crypto bills are attempting to minimize consumer use of encryption, which she believes to be the backbone of the internet.

Demirors elaborated on this topic, along with the development of decentralized autonomous organizations (DAOs) during an interview with Cointelegraph at Consensus 2022.

Cointelegraph: What are your thoughts on recent regulatory frameworks in the United States?

Meltem Demirors: I do think that the Lummis-Gillibrand bill and the Token Taxonomy Act of 2021 have been good attempts at categorizing and classifying digital assets. But, the challenge I have with so many of the crypto bills and regulations is that all are all focused on financial services and taxation. They are focused on where and how we govern, tax and extract value for the government. Therefore, the biggest issues I’m excited about are those centered around consumer privacy, self-sovereignty and freedom of speech, which are not being addressed in these bills.

Unlike so many bills that focus purely on the side of the financial services, the industry needs to focus on crypto infrastructures like data centers, connectivity, computations, semiconductors and the actual plumbing that makes any technology function. We also need to make sure that the U.S. is a friendly jurisdiction for people to develop not only software but also hardware that can be deployed at scale. Today, we have seen no cohesive action on this. The industry has seen a piecemeal approach with the State of New York taking a very draconian approach, while states like Texas and Wyoming want to become homes for crypto mining.

Moreover, the right to consumer and financial privacy are also not being addressed. In fact, most of these bills want more financial surveillance. As an industry, it’s important for us to continue to push back on this, particularly in a world where central bank digital currencies (CBDCs) are being explored.

CT: Any suggestions on what the crypto industry can do to preserve privacy and financial freedom?

MD: I think the biggest movement we’ve seen has been the crypto wars — and I’m talking about cryptography. In the early 90s, there was a massive debate around encryptions and the use of encryption for a variety of consumer-focused applications. Encryption is truly the backbone of the internet and we are seeing a number of bills now attempting to minimize consumer use of encryption and to create back doors.

Yet, once backdoors to encryption are created, they won’t just be used to surveillance consumers but rather will be used against our government. This is now a matter of national security. Therefore, I think the war of encryption is still alive and well. I also think there is more that we can do as an industry to preserve…