The Davos Set Reborn In The Crypto Metaverse TechRadar

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The annual World Economic Forum in Davos once symbolized a certain type of disconnected globalism, mixing politics and high finance. The recent image of Tony Blair and Bill Clinton on stage next to crypto billionaire Sam Bankman-Fried, wearing t-shirts and socks, suggests the torch has passed.

The sight of these former centrists, famous for their lighthearted approach to financial regulation, alongside the latest generation of fintech gurus is not a case of “crypto going mainstream”. On the contrary, it demonstrates the kind of acceptance and respectability that only money can buy – and the risks that come with it.

The spending of technology dollars on European expansion is a good example. This week, Binance, the world’s largest cryptocurrency exchange by trading volume, said it had won regulatory approval in France – less than a year after being hit with an explosive ban by the regulator. British.

Along with praise from Emmanuel Macron, a recent charm offensive by billionaire Binance boss Changpeng “CZ” Zhao included a €100 million ($105 million) investment in the French blockchain ecosystem, a first campaign recruitment of 250 employees and the poaching of a senior French regulatory official.

This is a familiar playbook that has been used elsewhere in the tech world. Look, for example, at Facebook parent company Meta Platforms Inc., which seeks to offset a post-pandemic crisis by promoting visions of a metaverse running on remote work and digital currencies. Meta plans to hire 10,000 people across the EU (and expand its legal department) just to build it. As the chart above shows, Big Tech eclipses the EU.

Investing in Europe offers access to talent and tax breaks, but also a launching pad for lobbying in Brussels, where new rules on tech platforms and crypto exchanges are looming. Crypto firms are scrambling to push back on tighter controls while trying to distance themselves from the nasty online abuse of trolls.

Lobbying doesn’t always work (remember Libra, anyone?), but the revolving door between regulators is a problem. In the UK, crypto firms have hired cybercrime cops with double or triple salary offers. More than a dozen former US regulators now work for Binance, Coinbase and others. The war in Ukraine and inflation may have hurt the market value of crypto and tech stocks, but it’s still a deep-pocketed industry.

The fear of missing out on the next technological revolution is also adding to the pressure on EU policymakers to keep the door open. “The rhetoric of technologically backward Europe is in full swing, with damaging consequences,” explains Julien Nocetti, associate professor at Rennes School of Business. Macron called for a “European metaverse” as a way to promote domestic technology and reduce dependence on the United States and China.

But failing to enforce stricter surveillance threatens to hurt those least able to afford it. Gamified trading apps have encouraged aggressive risk taking. About a quarter of fraud complaints filed with the French regulator last year were crypto-related. Transparency is low: A review of deposits by about 30 vetted crypto firms found that most hadn’t filed accounts in years or had done so confidentially (which is allowed).

Meta’s metaverse is a more distant concept, but an EU Council research paper recently warned it could increase safety and security risks, from cybercrime to online bullying and harassment , and that it was currently “unclear” whether the bloc’s political toolkit was up to the task. challenge to regulate it.

If there’s one lesson for governments from previous financial crises and tech scandals, it’s that vast ecosystems need checks and balances. Beyond the new rules, now may be the time to pay regulators better and hire more of them, as the SEC does. A more competitive hiring environment for top engineers could also prevent brain drain: a 2018 French report on artificial intelligence suggested doubling starting salaries in the public sector.

As Clinton reportedly said in the Bahamas, new technologies are open to abuse and require a deft hand in “regulatory space.” As the Davos globalists give way to the crypto-globalists, it will be a difficult balancing act.

More from Bloomberg Opinion:

• Online privacy becomes critical if Roe v. Wade canceled: Parmy Olson

• Chinese tech companies get a reprieve, not a pardon: Tim Culpan

• Sorry Elon, “open source” algorithms won’t improve Twitter: Cathy O’Neil

This column does not necessarily reflect the opinion of the Editorial Board or of Bloomberg LP and its owners.

Lionel Laurent is a Bloomberg Opinion columnist covering the European Union and France. He previously worked at Reuters and Forbes.

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The Davos Set Reborn In The Crypto Metaverse TechRadar

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