Monday, June 24, 2024

Blockchain Conglomerate Founder: Regulators, Law Enforcement Agents to Go Deeper into ‘Layer 2’ Fraud in 2023

It is an understatement to say that crypto firms and exchanges have not fared so well in 2022. The crypto industry has an estimated total of over US$2 trillion in losses in 2022 due to the price of tokens crashing, crypto exchanges and companies collapsing, and regulators enforcing stricter regulations. It is not a wonder that 2023 expert predictions for crypto and blockchain have been grim.

For his 2023 blockchain prediction, philanthropist, billionaire and gambling industry pioneer Calvin Ayre, who is also the founder of CoinGeek and venture capital firm Ayre Group, forecasts a grim 2023 for crypto, but a more hopeful year ahead for blockchain.

According to Ayre, it is to be expected—with the collapse of FTX being the last and greatest domino to fall in 2022—that regulating bodies and law enforcement agencies will focus on creating and implementing stricter regulations. Binance, which is one of the top five largest crypto exchanges, will become a prime target in 2023.

On top of already being the subject of an ongoing investigation by the United States Department of Justice, prosecuting Binance will set a great example that regulators and law enforcement agencies mean business, no matter how big and influential a crypto firm is.

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Like Ayre, former Chief of the United States Securities and Exchange Commission (SEC) Office of Internet Enforcement John Reed Stark also foresees “a general crypto-regulatory onslaught will dominate 2023” and that “Binance will collapse.” However, while Stark anticipates that he will most likely end his crypto involvement in 2023 and move on to other things, Ayre has a more optimistic outlook regarding his blockchain advocacy.

“Stark is right in his belief that a regulatory tsunami is about to crash over crypto, but he’s so focused on the ‘layer 1’ fraud that he misses the far more damaging ‘layer 2’ fraud perpetrated by the mainstream payment companies and the Silicon Valley tech-bros who support them. Only when this fraud is exposed and mitigated will the true promise of the Bitcoin white paper be realized,” Ayre stated.

Ayre details that layer 1 fraud is actually the ones that the likes of the Celsius Network, Forsage and FTX have perpetrated, while layer 2 fraud deals with the deeper manipulation by business giants of the technological foundation of crypto, which is blockchain.

“This larger fraud threatens to hold back progress in the form of Web3 projects that will allow individuals to wrest control of their online data from today’s Web2 giants and the payment infrastructure that supports them,” Ayre explained.

A scalable blockchain can surpass credit card networks in efficiency, transaction capacity and fees. Furthermore, recording data on a public immutable ledger where all transactions can be tracked and traced actually gives various government agencies a veritable treasure trove of evidence against bad actors.

But it seems that this is not something that major players within the crypto and financial spaces want. Why? Aside from rendering obsolete Web2 technology that most of these giants use to make money, these major players, like the credit card duopoly VISA and Mastercard, could not tolerate “a low-fee payment rival that promised serious benefits for both merchants and customers.”

So, while Stark was utterly pessimistic when it comes to his personal engagement in the crypto and blockchain space in 2023, Ayre ends his 2023 blockchain prediction on a more optimistic note. As he predicts that regulators and law enforcement agents succeed in targeting layer 1 fraud this year, their attention will also be drawn to the “deeper, more insidious ‘layer 2’ fraud.”

And once layer 2 fraud is exposed and blockchain manipulation is weeded out, Ayre is confident that the scalable blockchain technology that he is promoting will finally be recognized for what it truly is: “a regulatory friendly and legally compliant blockchain that can serve as both the backbone of the Web3 revolution and an environmentally friendly data storehouse without peer.”

Claire James
Claire Jameshttp://www.firedigitaluk.com
Claire is an accounts manager at Fire Digital UK, an online publishing and content marketing company based in the North West.

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