A recent panel discussion at the Staking Rewards ETH Staking Forum brought together experts from the staking industry to share their insights on the challenges and opportunities to improve staking compliance not only in the regulatory sense but also in institutional compliance requirements. The panel featured Alison Mangiero from POSA, as the moderator. She was joined by Brian Mosoff from Ether Capital, Kuhan Tharmananthar from Consensys Codefi, and Ernest Oppetitfrom from Kiln. Let’s dig into the key takeaways.
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1. Importance of Transparency in Staking Operations
Brian Mosoff emphasized the need for transparency in staking operations. He mentioned that institutions and regulators require detailed information on staking providers’ activities, such as relay usage, OFAC compliance, and monitoring missed attestations and blocks. This information helps institutions assess the risks and make informed decisions on staking investments. It also aids regulators in understanding the industry and creating appropriate guidelines.
2. Navigating Regulatory Compliance
Ernest Oppetit discussed the importance of understanding and navigating the different regulatory compliance requirements across jurisdictions. He highlighted that compliance should be proactive, with staking providers working closely with regulators to address concerns and create compliant products. This collaboration helps build trust and fosters a healthy relationship between the staking industry and regulators.
3. The Role of Service Providers in Compliance
Brian Mosoff and Kuhan Tharmanathar discussed service providers’ role in helping institutions comply with staking regulations. Staking providers can act as consultants and advisors, sharing their expertise and knowledge with traditional institutions to help them understand the intricacies of staking compliance. This partnership is crucial in bridging the gap between the two industries and fostering greater collaboration and understanding.
4. Cybersecurity Measures in Staking
Ernest Oppetit and Kuhan Tharmanathar shared their thoughts on cybersecurity measures in staking. They agreed that security should be a top priority for staking providers, with constant attention to potential vulnerabilities and risks. Regular audits, penetration tests, and maintaining a culture of prioritizing security are essential for ensuring the safety of staking operations.
5. Non-Custodial Staking Solutions
Kuhan Tharmanathar emphasized the benefits of non-custodial staking solutions, which give customers greater control over their operations. By offering flexibility regarding validator regions, cloud providers, and MEV relays, non-custodial solutions empower institutions to make decisions that best suit their compliance requirements and risk profiles.
6. Challenges in Achieving Regulatory Clarity
The panelists discussed the challenges in achieving regulatory clarity for staking. Alison Mangiero pointed out that it’s about clear guidelines and creating an environment that fosters innovation and growth. Brian Mosoff added that while regulatory clarity is essential, the industry must also work on best practices and develop solutions that proactively address regulators’ concerns.
7. Institutional Adoption and Compliance
The panelists agreed that institutional adoption of staking is not solely dependent on compliance. However, clearer guidelines and compliance solutions can help drive adoption by reducing uncertainties and risks associated with staking investments. As more institutions enter the space, a collaboration between the staking industry and regulators will become increasingly important to ensure compliance and innovation.
8. Ongoing Evolution of the Staking Industry
The panelists highlighted the ongoing evolution of the staking industry, with innovations and opportunities continuously emerging. They emphasized the importance of staying abreast of these developments and adapting to changes in the staking landscape. This ongoing evolution means that institutions will always need guidance and expertise from staking providers to navigate the complexities of staking compliance.
The panel discussion provided valuable insights into staking compliance challenges and opportunities. Transparency, proactive engagement with regulators, and robust cybersecurity measures are essential for creating an environment where institutions can confidently participate in staking. As the industry continues evolving, a collaboration between staking providers and traditional institutions will be crucial in bridging the knowledge gap and fostering greater uptake of staking services. For future conversations like this, check out our Staking Summit 2023.