Is the SEC weighing down on the crypto industry? Is it sanitizing it or tactically undermining it? Is crypto regulation a public facade or does it hold brief for the industry itself?
I was inspired to find answers to these questions and many more, and my search for definitive answers led me to Ngosong Fonkem, Harris Bricken international trade and compliance attorney.
In 2022, Fonkem was appointed by the U.S. Secretary of Commerce and US Trade Representative (“USTR”) to serve as an industry sector advisor within the USTR’s Industry Sector Technical Advisory Committee (“ITAC”) on “Small, Minority, and Women-led business.”
In this interview with Fonkem, you can learn more about crypto regulation and the role of the SEC. Enjoy the conversation!
Mr. Ngosong, can you briefly tell us about yourself?
I am an International trade and compliance lawyer at Harris Bricken Sliwoski LLP. My enthusiasm to embrace difficult challenges that others are afraid to take on and willingness to go where others won’t go has provided me with the opportunity to help my clients navigate unfamiliar business sectors in unfamiliar legal territories.
Prior to settling into full time legal practice, I worked as a full-time law professor at the law faculty of the oldest private university in Malaysia and as an energy intelligence management consultant in Southeast Asia. I continue to teach courses on International Trade and Global Business as an adjunct professor at St. Norbert College Schneider School of Business and Cardinal Stritch University College of Business and Management.
Most recently, I co-authored a book on international trade and geopolitics titled, Trade Crash: A Primer on Surviving and Thriving in Pandemics & Global Trade Disruption. The second edition of that book is forthcoming later this month.
As compliance lawyer, do you think regulation is going to kill the nascent crypto industry?
I understand that there is currently an ongoing debate between those on the one hand who believe that regulations are necessary to protect investors and ensure the stability of the sector and those on the other hand who view regulation as a hindrance to innovation and the full development of the sector.
I am on the side of the former. Recent events like FTX scandal and the billions of dollars in losses prove that regulations are essential and will provide a more secure environment, which ultimately will attract more people to the crypto industry as time goes on. If there is too much regulation, the industry will necessarily adapt.
The SEC is determined to regulate the “hell” out of the crypto industry and it said it was out of concern for investors safety. Do you think it has a legitimate excuse to do so?
Yes it does! As I mentioned in my previous answer, recent events like FTX scandal show that regulations are essential to protecting investor’s safety. That being said, what’s tricky about the SEC’s recent actions is that the laws are not really clear about what aspects of crypto fall within the SEC’s jurisdiction.
The laws need to be clearly spelled out to allow the crypto community to know what their compliance obligations are so they don’t run foul of crypto legislation. In my honest opinion, using enforcement actions to tell people what the law is in an emerging industry is not a fair way to regulate the industry.
Some critics have described the hefty fine leveled against Kim Kardashian by The SEC as scapegoating. Do you agree with this position?
While I agree in principle with the SEC’s general position, I think this issue is at the crux of the ongoing debate on what aspects of crypto fall within the SEC’s domain.
Arbitrarily picking and choosing what token or crypto is a security without a clear standard will not solve the problem ultimately.
When look at the crypto market, where do you see it heading?
The biggest drawback of too many regulations is that people may give out too much of the control of crypto to the government, which would defeat the whole purpose of decentralized finance. Ironically, I think that is really where the market is headed as the industry continues to grow and become more mainstream.
The COVID-19 pandemic led to a global trade disruption and a search for a solution. Do you think blockchain technology can provide a shield for international trade?
Yes. Blockchain allows businesses to broaden their international trade opportunities by eliminating redundant methods. That effectively limits the costs associated with international transactions and processes.
That is an area where I see the greatest ROI for companies engaged in cross-border trade.
What's a normal day for you?
The most interesting aspect of being an international trade lawyer is that there is really never a boring day at the office as the work varies depending on the clients’ business needs and the projects they are seeking to accomplish.
A typical day for me revolves around zoom/phone meetings with clients about their business operations overseas or on compliance with U.S. trade laws and those of other countries. Some amount of time is also spent analyzing ongoing geopolitical developments in the U.S. and around the world and providing strategic advice to clients on how to navigate the business and trade risks associated with those events.
A fair amount of time is also spent drafting legal documents as may be necessary to accomplish the clients’ goals.
What advice do you give to people who look up to you in this profession?
It is a difficult field to break into because there are very few law firms with international trade practices and most of them typically require 3-5 years of relevant experience and an Ivy-league education.
So, if they have the opportunity to develop the necessary skill sets, they should not hesitate to do so, even if that opportunity is not financially rewarding in the short run. Once they have the skills and the opportunity the money will come.
