The future belongs to those who think without borders

Crypto has had a challenging year and a bear market that has overstayed its tenure. In 2021 venture capitalists invested $31 billion in crypto, in 2022 this figure dipped slightly to $ 30 billion, according to Galaxy research. However, with regulatory landscapes that are becoming increasingly challenging it is becoming more challenging to not only secure funding but ensure your project retains its longevity.

“Funding and education are critical to this industry especially because its still very new,” says CEO of Cassiopeia Services, Stefania Barbaglio.

Stefania or Steffy as she is known recently caught up with Azeem Khan, Head of Impact at Gitcoin on the Financial Fox to chat about the world’s first Web 3 reality TV show Build The Block.

Build The Block pits 12 promising Web3 projects against each other for a chance to acquire the exposure and traction they need to scale their startups into trailblazing enterprises. These projects are reviewed by a team of judges that include:

• Yi He, Co-founder and CMO of Binance and Head of Binance Labs
• Yibo Ling, Chief Business Officer of Binance Labs
• Robby Yung, CEO of Animoca Brands Investment and partner of Animoca Capital
• Azeem Khan, Fundraising and Partnership lead of Gitcoin
• Guy Turner, Co-founder and face of Coin Bureau.

Back to basics

“I started my journey into the Web 3 world while I was still studying, in 2013 buying and selling Bitcoin. I ran the Boston Marathon and wrote an article based on my experience which got some traction and I then got to write for The Huffington Post. I tried launching a cryptocurrency called Kim Coindashian in early 2014, and also worked in the initial coin offering space in 2017. In 2021, I launched a venture-backed Web3 crowdfunding platform, and I am currently, the lead of Impact at Gitcoin, a decentralized autonomous organization that has helped distribute over US$65 million in grants to the Web3 ecosystem since 2017, and helped spawn many multi-billion dollar companies in the web3 space that were originally grantees of the enterprise, “says Azeem.

“Funding at an early stage is very important. At Gitcoin we look at a variety of factors for our builders. We also don’t allow our donors to make decisions about where the funding goes and the projects themselves need to adhere to certain criteria,” adds Azeem. Despite the optimism from Azeem and the great work that Gitcoin is doing — the facts are clear: Q1 saw the lowest crypto VC activity in 2 years with $2.4bn invested across 439 deals. The report from Galaxy further revealed that VC investments have been falling since peaking at nearly $13 billion in Q1 2022, with the latest quarter’s results representing a decline of over 80% compared to the same to last year.

Despite the optimism from Azeem and the great work that Gitcoin is doing — the facts are clear. Q1 of 2023 has seen the lowest crypto VC activity in 2 years with a total of $2.4 billion invested across 439 deals. The Galaxy report further revealed that VC investments have been falling since its peak of almost $13 billion in Q1 2022 — with the latest quarter’s results showing a decline of over 80% in comparison to the same time last year.

It’s not all doom and gloom though “I look at some of the twenty-year-olds in this industry and think wow. They have this energy and passion and it’s often the people that have no boundaries that won’t think of failure that I look at because we have to nurture that talent and shape those raw ideas,” says Azeem.

Despite various statistics there is evidence that indicates that crypto firms are leaving the U.S. for countries that offer greater regulatory clarity and friendlier tax policies. The report by Galaxy found that U.S.-based companies raised 42.8% of the VC money flowing into crypto in Q1 2023, with the next closest being France at 19.4%.

“If implemented as planned, MiCA has the potential to make a substantial impact on the European crypto market while also influencing regulatory developments on a global scale. The proactive approach taken by MiCA in providing clarity and regulation stands in contrast to the enforcement-focused approach adopted by the United States through bodies like the SEC and CFTC.

MiCA’s role goes beyond just regulatory compliance; it is a driving force for innovation. By offering valuable insights and inspiration, MiCA could shape the regulatory approaches of many countries worldwide. The question remains as to how closely other nations will align their regulations with the EU’s model.

Predicting which nation or region will emerge as the primary crypto hot spot is a challenging task. Both Hong Kong in Asia, which has embraced a pro-crypto stance, and Europe with the potential impact of MiCA, demonstrate significant potential for crypto adoption and innovation. Factors such as regulatory clarity, government support, robust market infrastructure, and technological advancements will undoubtedly influence the attractiveness of a region as a crypto hot spot.

But we should acknowledge that developing and implementing comprehensive and effective crypto regulations is a complex undertaking: striking the right balance between encouraging innovation, protecting investors, and managing risks is crucial. While MiCA presents a comprehensive regulatory model for the EU, monitoring its evolution and considering the unique needs and dynamics of other countries and regions is paramount. And establishing consistent global crypto regulations will require international coordination and collaboration among regulatory bodies. This collaborative effort will be essential for fostering a harmonised and coherent regulatory environment across borders.

MiCA’s potential impact on the European crypto market and its influence on global regulatory developments cannot be underestimated. As the crypto industry continues to evolve, it is crucial to navigate the complex landscape of regulation, striking the right balance to foster innovation while ensuring investor protection. MiCA’s introduction marks a pivotal moment in the evolution of crypto regulations. By embracing MiCA and fostering international collaboration, we can lay the groundwork for a robust, transparent, and responsible crypto industry that benefits investors, innovators, and society as a whole,” says Stefania Barbaglio.

Despite the challenges faced in the industry there are a few certainties that can’t be ignored:

• There is a growing interest in digital assets — which will not simply disappear
• Education and funding remain key to the sustainability of this industry.

“Funding is a key element of building anything, but it can also be quite challenging — especially in a bear market. So, well done on the great work at Gitcoin and also finding this new engaging way with Build The Block to keep funding great ideas,” adds Steffy.

“Yeah, thank you so much. Being able to do the work that we do especially in the bear market to get funding in the hands of these builders is super important to us. Just from a mission perspective and so I’m fortunate to be able to help do that,” concludes Azeem.

You can watch the full interview on Financial Fox: