Powers On… Summer musings after two particularly bad months in cryptoland – Cointelegraph Magazine

This column’s goal has never been to provide investment advice on cryptocurrencies or other digital assets, nor has it been to provide individualized legal advice. It has mostly been about my desire to freely set forth in writing my thoughts on the state of the crypto market and the legal affairs surrounding it.

Powers On… is a monthly opinion column from Marc Powers, who spent much of his 40-year legal career working with complex securities-related cases in the United States after a stint with the SEC. He is now an adjunct professor at Florida International University College of Law, where he teaches a course on “Blockchain & the Law.” 

So let me state the obvious: It has been a particularly bad past two months in cryptoland. Both in activities relating to digital assets and crypto prices. However there are silver linings to consider. And when considered, perhaps readers will gain a greater perspective and not act in a reactionary way with their digital assets or blockchain business.

It has been a particularly bad past two months in cryptoland. However there are silver linings to consider. 

As I have alluded to in prior columns, I believe Bitcoin, Ether and other cryptocurrencies are here to stay. No one country, or group of countries or regulators, can stop their use and development — nor can a series of failures or freezing of assets by a stablecoin issuer, other large crypto lenders like Celsius, or crypto hedge funds such as Three Arrow Capital which filed bankruptcy proceedings here in the United States last Friday. I also believe, like many blockchain and crypto experts including Dan Morehead at Pantera Capital, that over time, the prices for many of these cryptocurrencies, which are backed by solid blockchains or blockchain businesses, will recover and go higher.

First, there was the complete collapse of the stablecoin TerraUSD — now known as TerraUSD Classic following a rebranding — in early May. When I reported on this in my last column, I cautioned that crypto investors needed to better understand their stablecoin investments’ lack of protection, both in their failure to be tied and backed exclusively or even partially by a reserve currency like the U.S. dollar and by the lack of clear, guaranteed redemption rights in one’s ability to convert the stablecoin to dollars. In addition, there was no government backstop for when the issuer of a stablecoin failed, such as SIPC insurance provided for securities at traditional…