What happened?

This week, Coinbase received a notice from the SEC identifying potential violations of securities law. Threatening to enforce the biggest, publicly listed crypto player in the US has prompted outcries among industry leaders (e.g. Brian Armstrong (Coinbase), Rian Selkis (Messari), and Ryan Wyatt (Polygon), and Jeremy Allaire (Circle) among others).1

And it concerns us all.

Beyond Coinbase, beyond the US

Because what has been happening in the US lately is not only about Coinbase. It’s not even about the US and its allegedly systemic crackdown on crypto (here’s a timeline2).

It’s questioning the most fundamental principles on which this space is built upon.

Let’s step back for a moment.

Distributed trust

On its most fundamental level, Bitcoin enables a new foundation of distributed trust, allowing human coordination at scale without relying on centralized, trusted intermediaries. This becomes possible thanks to advances in cryptography and distributed computing, and elaborate economic, and game-theoretical systems.3

This technology, with Bitcoin as its first use-case, is the foundation of most of what we today call “crypto” and “Web3”.