On Monday, three hours after The New Yorker published an article detailing four women's allegations of physical abuse, Eric Schneiderman resigned from his position as New York Attorney General (AG). Schneiderman, who denied the accusations, was the presumptive Democratic nominee, so his abrupt resignation threw a curveball into the 2018 AG race.
In an increasingly chaotic contest, the door is now open for Manny Alicandro, an experienced capital markets attorney and ardent cryptocurrency supporter. The Republican candidate is a gregarious and analytical man with a strong New York accent and an encyclopedic knowledge of major cryptocurrency regulatory issues.
ETHNews spoke with Alicandro, who shared his views on everything from cryptocurrency-based campaign contributions and initial coin offerings (ICOs) to New York's BitLicense and the need for industry self-regulation.
Alicandro plans to accept campaign contributions made in any of the four major cryptocurrencies (bitcoin, bitcoin cash, Ether, and Litecoin). However, he only declared his candidacy on Monday and has yet to set up a formal mechanism to accept the contributions. Readers may remember that last year, as a candidate for New York's 21st congressional district, Patrick Nelson accepted bitcoin contributions through BitPay.
Although he has not participated in any ICOs, Alicandro called the fundraising mechanism "an important vehicle" and emphasized the importance of supporting business development. The candidate seemed particularly irked by excessive government regulation.
He said that cryptocurrency regulation has been "overly burdensome" and worried that projects and developers are relocating abroad. Alicandro referred to the SEC's guidance on the registration of cryptocurrency exchanges as ambiguous (a common refrain in the blockchain community) and said that the agency is essentially "pushing regulation offshore" with its harsh approach. The candidate simultaneously expressed concern that US investors would miss out on regulatory protections if companies operate abroad and still solicit contributions from people in America.
Alicandro agreed emphatically with the CFTC's treatment of bitcoin as a commodity – and he even namechecked Judge Jack Weinstein. In March, Weinstein granted a preliminary injunction in the CFTC's case against Patrick K. McDonnell and CabbageTech, Corp, a ruling which supported the agency's 2015 finding that virtual currencies like bitcoin are commodities. Asked what sort of regulatory classification he anticipates for Ether, Alicandro said he suspects that the CFTC will put ETH in the same position as bitcoin (as a commodity). The candidate also suggested asking whether the existing classifications (commodity or security) are simply "too narrow."
Note: Earlier this month, the CFTC and SEC reportedly met to discuss the possible securities classification of cryptocurrencies, including Ether.
When asked about the $50 million ICO being undertaken by Kodak (a company headquartered in Rochester, NY), Alicandro said that they seem to be "testing the regulatory waters." Importantly, the Kodak blockchain project is being conducted under a SAFT, or Simple Agreement for Tokens, and is thereby limited to accredited investors.
New York's BitLicense
Throughout our conversation, Alicandro repeatedly complained that New York's BitLicense stymies business development. "It's clearly a crusher," he said. Although the candidate stated that he would not want to scrap the license in its entirety, he suggested that the state needs a regulatory schema that is friendlier to blockchain and cryptocurrency. He suggested Wyoming's approach as a potential model. In March, the Wyoming legislature passed five pro-blockchain and pro-cryptocurrency bills, carving out several exemptions and enabling possible advances in electronic record-keeping.
When asked about former AG Schneiderman's probe into New York-based cryptocurrency exchanges, Alicandro called the inquiry "a witch-hunt."
Alicandro is clearly savvy about even the most detailed aspects of the cryptocurrency markets. He recalled the concerns about insider trading on Coinbase after the bitcoin/bitcoin cash fork, and compared the problem to the insider information scandal that swept up fantasy sports betting websites DraftKings and Fan Duel in 2015.
Overall, the candidate said, self-regulation is the way to go, and he applauded the efforts by the Winklevoss twins to establish a Virtual Commodity Association self-regulatory organization (SRO). "I think it's great," he said. While acknowledging that it might not be the ultimate answer, Alicandro indicated that the SRO could be a strong first step for the cryptocurrency industry at large.
Finally, it's worth noting that the candidate is an attorney adviser to several blockchain projects – though he was not at liberty to disclose their names. He did share one, though, which is the ICO Governance Foundation, led by Miko Matsumura. Alicandro explained that the nonprofit is attempting to establish itself as an ICO registry in the spirit of EDGAR, the SEC's Electronic Data Gathering, Analysis, and Retrieval system.
As Alicandro seeks to clean up the "culture of corruption" in New York politics, his impressive knowledge of the cryptocurrency markets and his experience with conventional financial regulation make him a unique candidate. As blockchain and cryptocurrency development become more mainstream topics of conversation, we are sure to see more candidates making FinTech development a prominent part of their platforms.