Historically, Black and Brown communities have had restricted access to opportunities for generational-wealth building. Crypto offers a chance to redress that balance… but an opaque mess of laws and regulations around crypto services and a prohibition on certain wealth-generation opportunities are standing in the way of that happening.
Controversial language in the United States’ recently enacted infrastructure bill may have unintentionally contributed to that cycle. The document contains broad tax-reporting language directed at “brokers.” The ambiguity of the term means it could apply to those who have nothing to do with brokerage, like miners and developers, and could also have an inequitable effect on blockchain innovators of color.
According to Cleve Mesidor, founder of The National Policy Network of Women of Color in Blockchain, “The assumption was that these miners were privileged white kids in their mansions. No, we’re mining and staking. We’re developing wallets, hardware and software. This burden will not hurt Binance or Kraken. The only people you hurt are the little people.” Karen Hsu, a cybersecurity expert and crypto entrepreneur, further believes that the language in the legislation “could unintentionally block innovators of color out of the market.”
Mesidor, also an author and former Barack Obama appointee, hopes to dispel the notion that blockchain innovators are predominately white men with limitless access to capital and power. She leads an annual congressional delegation to Washington of over 60 blockchain entrepreneurs and primarily meets with the Tri-Caucus (the Congressional Black Caucus, Congressional Hispanic Caucus and Congressional Asian Pacific American Caucus). Mesidor initiated the effort because she wanted these legislators to see “people who looked like them.”
Delegation of Women of Color in Blockchain!
How it started (2019)…How is going (2021)
Commemorate Women’s History Month with a Delegation of Blockchain Industry Leaders!
RSVP to Join Virtually March 3-4: https://t.co/x31vK27vgN#WOCBlockchain #womenintech pic.twitter.com/fb1UXs4adq
— Cleve Mesidor (@cmesi) February 27, 2021
It’s not just founders of color who are potentially blocked out of the market. Federal regulations, or a lack thereof, restrict access to a litany of innovative retail investment products. With very few exceptions, leveraged tokens, crypto lending tools and all Bitcoin spot market ETFs are not permitted in the United States.
Proficient retail investors from all communities could benefit from these products, and they could be wealth-generating game changers for families and communities who have been locked out of the traditional system. Cryptocurrency legal and regulatory adviser Christine Trent Parker is uncertain what the right regulatory structure for those products would look like, but she believes that underserved communities deserve access to them and that those products should be offered in a regulated manner.
“Why would you not let people [have access] who don’t have access to investment products, who don’t have a portfolio of securities that they can borrow against? It’s a great product.”
Manasi Vora, vice president of Skynet Labs and founder of Women in Blockchain and Komorebi DAO, believes that underrepresented retail investors “are usually left out of amazing opportunities due to arcane laws,” like the accredited investor law.
The Securities and Exchange Commission defines a retail investor as “accredited” if the individual has a gross income exceeding $200,000 or has joint income with a spouse or partner exceeding $300,000 during the past two years. Although the law was amended by Congress in 2020 to include investors with certain professional credentials, it may still be too restrictive when applied to the crypto space.
Skynet
