CVA Podcast: Karin Lorez, LorezLegal

Transcript

[Music] hello hello this is your host trash ahmed ready to kick off another bite-sized episode of the crypto valley association podcast now let's discover together the growing trends of this fast-moving space and try to shed some light on the mysteries it contains today we are joined by dr karen lores co-founder of scale compliance and co-chair of the cva's very own regulatory working group so let's dive straight into the hidden world of crypto law it's a pleasure to have you join us karen how are you doing today hi shiraz thank you so much for inviting me i'm doing well currently i'm in dubai exploring the crypto space here

and it's quite an interesting wee week because it's a d5 conference going on here so i'll tell you later a bit about it awesome thank you yeah i'm really really looking forward to it and maybe we can get the the ball rolling by you sharing with us your first blockchain related experience sure yeah i'm actually a traditional banking and financial markets lawyer and bitcoin caught my attention in 2014 i think so as i said my background is financial market law with a strong focus on regulation and i was interested in financial products in monetary regulation as well after the financial crisis regular regulatory and regulations were quite big so this is

this was really my specialization in focus and i saw something new in the market which was bitcoin and i didn't know what bitcoin was was it a financial product or a currency digital currency what was it what is it so i started going to meetups in zurich and i also i was also reading a lot about bitcoin but that was more in my private time right it was it wasn't related to my work as such and then in january 2017 i changed my job and joined the legal team of falcon private bank arthur viloyan today's bitcoin swiss ceo joined falcon private

bank around the same time and shortly after i started um arso came to my office and asked what do you think of bitcoin karen and then i told him that i knew a lot about bitcoin that i was a big fan and so on and then he said what do you think if we offered bitcoin to our clients and i said yes this is great i was really super happy about um his plans then said i'm in then he said okay he was a bit surprised and he said are you really in the legal team yeah that's how it started as you know yeah falcon was the first bank who offered bitcoin and other cryptocurrencies to its clients okay well it's a wonderful

day and i can't wait more about your experiences there but maybe before we we do that you can tell us a little bit about your current uh involvement uh within the space as uh who founded your your own company scale compliance and you also have lawrence legal yes correct so yeah after falcon private bank i joined mme there i consulted startups and banks basically after nine or ten months i decided to become self-employed as a legal advisor my company's name is lorex legal so it's my last name so now i just insult or mainly consult crypto blockchain and fintech clients which is

quite interesting and this was already two years ago like exactly yes february 2019 actually okay and last year i founded together with my business partner mark berger a compliance company called scale compliance which is special specialized in crypto compliance yeah that's what i do yeah what has kept me more or less in this space is the high demand and support that is needed right and uh yeah okay wow wonderful that's wonderful to hear and i mean you mentioned quite a few uh larger firms like pwc pelican giving me i mean even uh ubs when i'm mistaken and maybe you can tell us

a little bit more about your experience there and their openness to crypto related topics yes so yeah i worked for a lot of banks private banks but also ubs i started my career at ubs in the middle of the financial crisis was involved in regulatory projects there as well then later i also joined pwc the regulatory legal regulatory team which is quite interesting as well really in the aftermath of the financial crisis and i'm still very interested in in regulatory aspects and regulations and yeah that keeps me very busy yeah i can i can only imagine and you

said that you're currently now in dubai and there is like a d5 conference going on and you mentioned you're quite interested uh within this new growing space what what are your thoughts about decentralized finance yeah that's a it's a good and interesting question so i mean from a regulatory perspective defy is probably a bit difficult right i have my regulatory head on but i find b5 very interesting because it brings the whole space one step forward or one level up and of course it's uh it's not regulated we don't have specific deep regulations but i think it's it's needed um to kind of as i said bring bring the whole space

and level up and to also reinvent maybe the space bring in new ideas and i like that a lot because i think i like innovation so that's why i like it so much and you can bring in an innovation and then you can just um check whether it's it's compatible with the regular regulatory field or area or not and if not the regular the regulator still has the chance to to step in or to regulate something but i really like innovation so i'm more although i have a regulatory background that like innovation that disrupts certain systems okay and and so how do you see this this fight between i mean you

worked a lot of traditional players and this kind of real traditional side and now you're you're discussing the the decentralized finances which is kind of the opposite to it the disintermediation of this space i mean i mean how do you see is there kind of a war that is going to happen between the two like where do you see these two colliding or clashing yeah i think i mean they're actually two different worlds so you have the traditional financial market the traditional banks as well and then on the other side you have all this interesting projects d5 projects going on but i think there's more and more interest from institution or institutions asset managers

and banks i think the interest is even bigger for like or in d5 projects than bitcoin or cryptocurrencies i think they're more interested in d5 projects to be honest that's at least what i've seen so far and i mean currently they're really two separate worlds a lot of traditional financial institutions have no clue they don't they don't understand the whole space at all it's also lack of education so that's why i think it's very important that we also like as a crypto valley association educate people not only the space but also people

in the financial system in the financial markets and yeah seminars or conferences are super important but also publications or podcasts such as you do it's very important to yeah to to educate people yeah education is number one we'll definitely talk more about the cva and your involvement there but maybe following further into the the rabbit hole that is uh that is defy i mean we had someone on the show a few weeks ago that said bitcoin was the was the first uh defy project in application i mean do you see any particular applications that are kind of uh catching your eye at the moment uh within the space well i try to

keep pace with it to be honest but i think it's really a full-time job to monitor all the d5 projects and i just don't have the time to to to keep up pace with it with the um with the projects but i i really like the projects that combine traditional financials ideas of the financial system with the defy space such as loans which i really like and just see like where you can go and what you can do and also include new so-called market participants right or just like people that usually don't have access to

to to these markets i find yeah project projects like that really really interesting but like particular um projects i mean there are a lot of projects and i also um invested in some of the projects but it's um it's really hard to tell i mean a lot of them are either working super successfully or yeah they they just die basically and it's um it's hard to tell which one are really good or really interesting so that's why i just said in general i like the ones that um somehow use the old um like ideas of the system financial system and just

reinvent it somehow or change it yeah yeah yeah i see it's a little bit survival of the fittest in the space and so and so from what i'm hearing from you you're you're not kind of one of those uh anarchists that's like okay it's only the decentralized base that is going to work in the future you really see that the kind of the traditional space and this kind of newer world can kind of merge together and there are the advantages of both that that can come together or is it going to be totally the opposite and only one will come out in in the winning spot i think both will exist and i think it is important that both exist the traditional world and also the d5 world or whatever world

my wish is that there is room for like ground breaking projects and that also the regulator facilitates it or um because my fear is that at some point the regulator will just shut down like e5 projects or whatever or just the people behind the projects but this is really one of my yeah my fear but also i my wish would be that banks are supportive um or more supportive i mean i'm a traditional banking lawyer and i'm saying that banks should be more open-minded as well and also very support supporting when it comes to blockchain

d-file or the whole crypto space as such but i have to say i would also like to see more projects uh d5 projects or crypto projects with more meat on the bone and not just like replicate another project that was successful or clone projects this is something i would like to see because currently i just see a lot of like clones or yep like a lot of projects but just copy pasting basically other projects yeah so that the whole space as i said goes one level up but i think we need support from like the traditional world as well and the regulator as well okay i think uh from that point we can we can transition

uh to to the regulation side and we mentioned a little bit earlier about that um the swiss dlt framework is being partially implemented now so so what do you think about uh switzerland as a whole i mean so this doesn't mean he has been trying its best to kind of be uh be a leading jurisdiction force then within the blockchain technology world how do you see them uh adapting to this and what do you think about this this new law that is being put in place well i mean currently what i see is that we have more and more token projects in in the space and also i get a lot of requests from startups that want to issue a token an asset token or a security token most

of them are actually asset tokens and i also think that it's a very important step for um for switzerland that we have this with elt framework now that has partially entered into force that allows to issue um and also trade securities token which is very important for the whole space not only for switzerland but i'm very happy and very proud of course that switzerland is um again one of the first jurisdictions um enabling um yeah interesting projects again enabling securities tokens to be traded as well and yeah i'm also curious to see to be honest what happens when the first

dlt trading facility is established or gets the license by finma in switzerland this would then allow companies to trade with securities token or not only companies but also you and me so private persons as well and this is really interesting and i'm curious to see what happens also on an international level as soon as we have the first trading facility yeah okay wow i guess only only time will tell from from that perspective and i know that you're doing your best within the crypto valley association regulatory working group to educate on these perspectives and to really bring the community together would you like to mention to our

audience a little bit about the regulatory working group and what you're doing within that yes so i'm um lucky to have a great group of people together with gabrielle i'm the co-chair of the regulatory working group and we basically monitor the regulatory environment the blockchain crypto environment and gabrielle and i we just started working together um uh as a co-chair and we plan to publish on a regular basis one pages with useful information on the regulatory field like what's going on in the regulatory field and also give

our opinion on particular topics and particular um points as well and we have a really good group of people like very experienced people very experienced lawyers as well very motivated as well last year we published a couple of papers um this year will be another one or two already that we published and it's very nice to see that people are so motivated and are eager also to exchange knowledge and information which is yeah which is great really great it really it's it's so valuable and i think it's so valuable for the cva as well to have a good group of people of

lawyers who understands uh who understand the regulatory field i think a lot of startups but not only startups also bigger more established companies can profit from them yeah i definitely agree and the regulatory working group is one of the most active uh within the crypto valley association so definitely see a wide amount of interest uh within this within this group and so i'm really looking forward to seeing some of those uh those papers and and these one pages that sound quite uh uh quite informative as well so so it's wonderful and and maybe as we slowly approach uh the end of the episode you can tell us a little bit more on on where you believe regulation will

develop in the crypto space in the future oh that's a very difficult question but it's yeah it's a good question um i think the regulator i mean i speak the regulator i mean the regulator the financial regulator on an international level so not only a finma is always one step behind of course and which isn't bad i mean that's just how it is because we have very creative people in the crypto space in the blockchain space they develop new projects they do they come up with new great ideas and then they just just throw the ideas on on the market and then suddenly

suddenly there is a trend for example dfi or whatever and the regulator first just observes the market and um and then steps in if needed right the swiss regulator is um i think very good um you can also talk to to finma um you can they're very approachable they're also very supportive but are like other regulators that are less supportive would which is sad like in other jurisdictions so they're not really enabling um crypto blockchain projects whereas the the swiss regulator i would say is really enabling um

and supportive um with crypto projects um but it's to be honest i mean i can't really answer your question um it's hard to tell i hope the regulation won't be too strict of course i'm i i i like things to be regulated but also to have like room and space for innovation and as i said before for groundbreaking projects right okay that's uh let's go to here and yeah it's a great great to hear a positive spin on things and maybe you can give us the vision for the future of the hold industry meaning uh not only the regulatory

standpoint but blockchain technology itself well i mean maybe i will just talk about my vision or what i think um that is important so as i said before i would really like to see more projects with meat on the bone um sometimes i see a lot of projects but there is little or nothing behind it and so no replications no clones of course you can replicate an idea but just think a bit further and change it a bit more than just cloning it and also i hope to see more like knowledge transfer um this is something that we try to do in the regulatory working group

and i just became also the the head or chair of the startup working group and i hope to see more knowledge transfer as i said but also education and also brilliant minds in the space this is really good and i think it should less be about making money in in the in the crypto blockchain space as you said but rather it should bring the financial system to a next level and create useful projects that have an impact in our daily lives so this is actually my vision great mom it's very interesting thank you thank you karen for for that and well will you have and any final words uh

you'd like to share with our audience you mentioned the importance of education and i know that you brought out the swiss crypto guide um and anything uh you you'd like to share yes sure so i would recommend highly recommend to go and check out the swiss crypto guide so it's swisscryptoguide.com there you can find useful information about the regulatory landscape in switzerland you can just click through the guide and you will get a lot of free information on regulatory topics and of course if you have 30 questions you can always contact me it's karen at laureateslegal.com and i'm happy to also hear from from you

or get feedback on the swiss crypto guide awesome great well thank you uh karen and if you enjoyed this conversation feel free to check out more on our website cryptovalley.swiss where we host plenty of events educational content and even provide information on how you can join our growing community so thank you uh once again karen for joining us thank you so much uh for the invitation share us have a good day it's a pleasure thank you so stay tuned stay safe and until next time from the crypto valley in switzerland bye