Louis Tsu Weighs In on the Future of US-Based Crypto Firms

@IshanOnTech

Covering the latest events, insights and views in the Web3 ecosystem.

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In today's edition of "Behind the Startup," we delve deep into the world of blockchain, touching upon everything from its inception to the impact of regulatory pressures on the crypto realm. We're privileged to have Louis Tsu, the CEO & CTO of the Venom Foundation blockchain and CEO of Venom Africa, join us. With a rich history in technology and a deep understanding of macroeconomics, Louis offers a unique lens through which we can understand the complex intricacies of the rapidly evolving digital currency landscape.

A Sovereign-Level Scalability and the Game-Changing Regulation from Abu Dhabi

Ishan Pandey: Hi Louis, welcome to our series “Behind the Startup.” Please tell us about yourself and the journey that led you to become the CEO & CTO of the Venom Foundation blockchain and CEO of Venom Africa?

Louis Tsu: In 1979 I was fixing Black & White TV’s, and soldering circuit boards. From that point I’ve always had one foot in technology, ex-Apple, ex-TI silicon chip and founder of start-up’s. The other foot was in macro, economics and finance. So when I saw Bitcoin in 2017 and got wind of Venom in 2021, that was it.

Using Venom blockchain to bring better finance and help people especially in developing markets was right up my street. My transition from CTO into CEO was very natural as I have all the tools in my pocket understanding deep technology and vast experience in visionary leadership.

Ishan Pandey: Could you provide us some insights about the Venom Foundation blockchain? What makes it stand out compared to other blockchain platforms?

Louis Tsu: Two fundamental aspects:

1. The blockchain can scale at a sovereign level and maintain steady transaction speeds at low cost.

2. It is regulated by the Abu Dhabi Global Markets.

I could literally talk for hours on the tech. But at the highest level, this is my best summary.

Ishan Pandey: The recent SEC crackdown on Binance, Coinbase, and other cryptos has been a major talking point. What is your opinion on this issue, particularly considering the SEC's belief that every crypto asset, except bitcoin, is a security?

Louis Tsu: Being a security is not a crime, plus, it only matters if your in the USA and a) you are the originator of the crypto asset; b) the distribution reseller of the asset. All this means is more expensive paperwork.

It is all about liquidity, crypto coins that are highly liquid have more robust price action. When the SEC delists a crypto asset, it becomes illiquid. Look at Bitcoin, it is ubiquitous and the most liquid crypto asset.

Ishan Pandey: Do you see the recent SEC's regulatory actions as an attempt to establish control over a space that has been mostly unregulated or is this more of a 'ChokePoint 2.0' operation? Why?

Louis Tsu: The SEC is very well-versed in crypto. I remember 3 or 4 years ago the SEC at the Senate were talking about how to manage atomic swaps. IMO the SEC is acting by design, in a coordinated manner to slow down the US crypto industry.

It could be their opinion is such that well-established financial institutions could take over from the incumbents in crypto and do a better job, I do not know why the SEC is acting this way?

Ishan Pandey: As a veteran entrepreneur with an extensive background in monetary policy and macroeconomics technology, how do you interpret the SEC's motivation behind these lawsuits and their potential implications for the US, and the world at large?

Louis Tsu: The implications are good for the rest off the world and bad for the USA

In some countries regulators are used as a hammer to smash an industry and in other countries the regulator will nurture that industry through collaboration.

The PR the SEC get is overrated but very useful for blockchain infrastructure providers like ourselves. I get many questions from different sovereign nations. This spotlight shines on key topics such as the reliance on the US dollar and what role can blockchain play. In general, I see different countries looking to employ game theory to protect their national interests.

Ishan Pandey: Given the legal pressures on cryptocurrency exchanges, how do you foresee the crypto industry responding to these recent events?

Louis Tsu: If the USA SEC leadership or the government changes tactics and plays nice, the damage is already done. Web 3.0. and crypto firms are voting with their feet and it will be quite difficult to undo.

More importantly, other countries are pressing ahead with sound regulation to attract this nascent industry into their jurisdiction. The actions of the SEC are like a beautiful sales brochure for all the other crypto-friendly regions across the world. You can't put that toothpaste back in the tube.

Ishan Pandey: You've mentioned your belief that regulation is key for the crypto space, but not in the way it's currently being implemented. Could you elaborate on your vision for how regulation should be carried out?

Louis Tsu: Indeed regulation will permit the crypto industry easy access to the mass population and hence global adoption. I have experienced sitting down with regulators and cooperating, exchanging ideas, learning from one another to make something better for everyone.

Innovation will always move much faster than regulation, only through good communication channels and top down support for that industry can private enterprise and government bodies swiftly move in harmony.

This is not new, I remember back in the day in London during the 1990’s I founded a company manufacturing digital TV products and within 18 months a big country in ASIA in fierce competition with Europe changed all their regulations on silicon chips in order to out compete the EU market for digital TV.

Ishan Pandey: You noted the influx of massive institutions like Blackrock applying for digital asset licenses, and the apparent preparation of the SEC to regulate the US market. In this context, do you think traditional financial institutions are set to overtake original crypto shops that have been trying to play by the book?

Louis Tsu: Traditional finance will not overtake or shall we say cannibalize crypto shops. The market is still in the changing room, we have not even gone on the track and stepped on the starting blocks yet.

I’ve seen this playbook in the past. The entrance of the institutions will dramatically expand the overall market for everyone.

Ishan Pandey: What do you think will be the implications for smaller, traditional crypto businesses if large financial institutions take a leading role in the crypto space?

Louis Tsu: We are in a new dimension of software development, open-source and composability will move this market faster than Metcalf’s law. Smaller shops will build and they are in the best position to build on open-source. Institutions will have to adapt, I have no doubt they will, but they will not crush small shops.

This is not going to be like when giant supermarkets killed small grocery stores, sure some will die of natural causes, but the shops that provide great value can easily shine in today’s modern world.

It’s kind of like music, you think ‘that’s it’ no more new music riff’s or tunes can be created, we have all the best music in the world. Then suddenly a kid with a guitar writes a song that scythes through the charts.

Ishan Pandey: Lastly, could you provide us with your outlook on the future of cryptocurrencies and blockchain technology, especially in light of the ongoing regulatory developments?

Louis Tsu: The next bull run will not be the same as the last one. Many coins with no utility will dissipate. Capital will flow to value, and this will take a couple of years to get realized, in the short term we will see FOMO moving out the risk curve and irrational bets getting placed. But in the longer run, money always goes to the hardest asset and they will be the coins with intrinsic value.

Blockchain will be a big winner because adoption is already underway and everyone needs the plumbing and wiring to build on. I see the regulation as putting a legitimate stamp on blockchain, such as Venom!