PANEL - Digital Assets, Stable Coins, and DeFi: Disruption, Security, Innovation, and Opportunity
Channel: Beryl Elites
Date: 12/07/2022

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PANEL - "Digital Assets, Stable Coins, and DeFi: Disruption, security, innovation, and opportunity. Mitigating risk pertaining to liquidity, price transparency and cybersecurity."

PANELISTS: ❖ Moderator STEPHEN GANNON, Partner, McGonigle
❖ JOHNNY LEE, Principal, Advisory Services, Grant Thornton ❖ CYNTHIA PEDERSEN, Director, Tax Advisory Services, Cohen & Co ❖ TEANA BAKER-TAYLOR, Vice President, Policy & Regulatory Strategy UK/EU, Circle ❖ HUNTER KELLEY, Quantitative Investment, Associate, Galaxy Digital

Stephen Gannon's introductory remarks
at 0:37, 
"Digital assets are sort of at an inflection point where in many ways the adults are coming back into the room, that's going to be very much needed as these markets develop. They're obviously quite volatile, they they need stability, we're going to be talking a lot about that today."

Hunter Kelley, Galaxy Digital
at 2:47,
"When i think about digital assets and distributed ledger technology i think about how it can impact those areas of finance which ultimately affect us on our day-to-day .. we don't have that type of transparency at the fed and and financial institutions are making a best guess .. so if you bring transparency to some of these systems we can actually engineer outcomes much better than we have in the past. We can do much better in terms of engineering a system that we can then kind of tweak and tailor to achieve you know the goals that the fed is setting out to achieve .. so is our view that as as crypto develops and as it it broadens .. more transparency comes into the system that adds more stability into the system."

Teana Baker-Taylor, Circle
at 6:11,
"There's a lot of misunderstanding in the system about stable coins because there are many
different kinds of stable coins .. not all stable coins are created equal, it's kind of an unfortunate name .. there's three buckets of stable coins broadly speaking, fiat backed you know reserve stable coins like usdt, asset-backed um stable coins which gets a little confusing but typically these have a basket of a variety of assets, and then there are algorithmic backed which is what UST was .. 
Stable coins ultimately they are meant to hold a value so they are not meant to go up they are not meant to go down they are meant to be stable as the name implies, which then allows them to be useful for a number of different use cases."

Cynthia Pedersen, Cohen and Co.
at 12:45,
"The first piece of tax guidance came out in 2014, these assets are property .. you have to make sure you have a reserve to pay that tax because at the end of the year if all the assets go down in value that appreciation that was realized early in the year is still going to be taxable to you. The IRS doesn't care that your asset class, if you had Luna, went to zero.  They want their money for the appreciation that you realized early in the year so when you are actively trading these assets, make sure you have a reserve whether that reserve is held in fiat or if it's held in a stable coin that actually does have a reserve .. the wash sales rules really shouldn't apply, we don't have anything under 1091 that specifically applies into digital assets, so right now in a down market there's an opportunity to have tax loss harvesting for future gains that you might recognize in the future to carry that forward." 

Johnny Lee, Grant Thornton
at 19:31,
"We started doing the attestation work for crypto exchanges and coin issuers back in 2014, there was no regulatory guidance .. we needed to have an arm's length way of testing things we needed to have our own ledgers, we run our own nodes, we did not rely on third-party explorers .. this is a very traditional service financial statement auditing applied to a very dynamic and novel arena
and so we were going to inject as much independence and as much arm’s length .. and eight and a half years later we've gotten that down more or less to a science on the security side .. if you look at many of the most substantial thefts this year alone it's in eminently preventable things with too few synchronizing nodes, really zero attention in the design or architecture of a system for security."


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