Veteran Blockchain Developer: Overregulation Creates Hurdles for Crypto Companies, Diminishing Overall User Experience

While regulations are generally meant to protect consumers, in practice, they create hoops for crypto companies to jump through, thus diminishing the overall user experience, said Ivo Georgiev, co-founder and CEO of Ambire Wallet. Georgiev argues that regulations like the Eurozone’s Markets in Crypto-Assets (MiCA) actually “enable more sketchy companies and scams.”

Overregulation Beneficial to Bad Actors

In written responses to questions from Bitcoin.com News, Georgiev, an experienced Web3 developer, asserts that most Western countries are moving too quickly with regulation before fully understanding the technology. The Ambire Wallet co-founder insists that this approach ultimately encourages bad actors who are less concerned about adhering to regulations to “assume control over the market quickly without navigating these hoops.”

Meanwhile, Georgiev, like many crypto proponents, said he agrees with the assertion that the outcome of U.S. elections will likely determine how the U.S. Securities and Exchange Commission (SEC) treats crypto going forward. Georgiev nevertheless posits that the SEC, which he associates with the Democratic Party, needs to change course—especially after such a long period of inconsistent decisions and dissatisfaction.

Regarding bitcoin (BTC)’s recent downward spiral, the Ambire Wallet CEO contends that a further decline is unlikely. He said negative factors, such as the German government’s divestment of the asset and the Mt. Gox refunds, are already factored into the market. However, the CEO identifies the U.S. election outcome and the reduction in interest rates as two bullish catalysts that could support BTC’s upward trajectory.

Below are Georgiev’s answers to all the questions sent.

Bitcoin.com News (BCN): A 2024 report revealed a significant increase in crypto adoption among citizens of the United States. Some highlighted findings include that 40% of adult Americans own crypto, up from 30% in 2023. From your observation, what key factors are likely responsible for this surge?

Ivo Georgiev (IG): It’s an obvious answer, but I think the ETF is the main contributing factor here. The truth is that by this point, most people who’ve considered any type of investing have heard about crypto, and the main issue preventing them from going in is crypto’s reputation for scams.

ETFs help vastly with this, giving BTC and ETH much-needed legitimacy in the eyes of the public.

BCN: The growing adoption puts an additional burden on the existing infrastructure. Now since crypto adoption is a continuous process, there is a need for constant improvements to the infrastructure, and developers must continue to innovate. Do you think the current pace of infrastructure development is sufficient to conveniently accommodate the industry’s adoption rate?

IG: Absolutely! It could be a hot take but I think most of the Web3 industry is focusing way too much on infrastructure.

Currently, we’ve got a lot more effort and funds going into infrastructure under the assumption that we need it to enable the next wave of users, but we’re not thinking enough about how to get that wave of users, and this leads to a classic premature optimization problem.

How do we know what infrastructure to build if we don’t know what the hot use cases will be? I think we’re relying way too much on hypotheticals at the moment.

BCN: Your company’s flagship product, Ambire Wallet, is an open-source self-custodial smart wallet that utilizes account abstraction. Can you briefly tell our readers how it helps accelerate crypto adoption, especially in this era of the industry’s evolution powered by Web3 development?

IG: Account abstraction is the key to accelerating adoption in our view. Utilizing this technology we managed to solve many pressing issues with existing crypto wallets’ UX and security. Starting with onboarding, on Ambire you can create a self-custodial crypto wallet using email and password only. Furthermore, should you forget your password, you can easily recover your wallet. This was an unthinkable Web3 wallet experience up to recently.

With smart wallets we manage to abstract away other perplexing crypto wallet UX hurdles as well, one example being network fees. Thanks to smart wallets, Ambire users can use any token to pay network fees on any chain.

Security-wise smart wallets enable on-chain transaction simulation – users can foresee the effect of a transaction on their balance before they even sign it. This is an important step for protecting users from drainers and scams. In combination with hardware wallet support, this creates a very safe environment for Ambire Wallet users.

BCN: How easy can it be for new entrants willing to find their way in the crypto space using a wallet such as yours?

IG: We do our best to create a smooth onboarding experience for our users on our mobile app and our browser extension as well. After users create a self-custodial wallet with email only, they can easily on- and off-ramp crypto with several options available. In our dApp catalogue users can find a collection of the most popular dApps on Ethereum and L2s, further protecting them from phishing scams.

However, we believe that education is crucial to overcoming barriers of entry for new users, so on our social media channels we often publish materials on how to navigate the space and make the best out of their wallet experience.

BCN: Regulation is a crucial factor when it comes to crypto adoption and this is visible in the increasing number of crypto users following this year’s ETF approvals. How would you analyze the regulatory approach towards the crypto industry so far? In your view, are the regulators moving fast enough or are they hampering innovation in the crypto industry?

IG: Regulation is a double-edged sword and I think that while we do need regulatory frameworks, we need minimal frameworks. However, in most of the world, when someone tries regulating crypto, they try to over-regulate. MiCA is a good example.

Regulations are meant to protect consumers, however, in most cases, they end up creating hoops for crypto companies to jump through which diminish good user experience, which in turn actually enables more sketchy companies and more scams – because bad actors do not care about regulation anyway, and they can assume control over the market quickly without jumping through said hoops.

So in conclusion, I think most of the Western world is trying to move too fast with regulation and over-regulate before they’ve actually understood Web3 and understood what’s needed to actually protect users.

BCN: We have recently witnessed U.S. politicians expressing support for crypto assets or voicing their dissatisfaction with the Securities and Exchange Commission’s regulatory approach. Do you believe that the outcome of the U.S. elections in November will change U.S. regulators’ approach to policing the industry?

IG: It appears so. The current SEC leadership is closely tied with the Democratic party, so it’s only logical that the election could shake things up at the SEC, especially after such a long period of inconsistent decisions and dissatisfaction.

BCN: The German and U.S. governments have recently offloaded significant amounts of BTC. Along with the prospect of Mt. Gox coins finally being distributed, this move is widely believed to be the cause of the recent slump in the market. The seemingly fading impact of spot bitcoin ETF approvals has sparked fears that the bear market is taking over. In your view, have the bulls run their course, and is BTC about to go even lower?

IG: It’s never easy to predict these things. I’m personally really bullish because I think that the market is already very scared by the sideways movement, Germany’s actions and Mt. Gox, and from this point forward those negative factors are already priced in and we should be moving forward.

However, one worrying factor is that there’s not a lot of retail and therefore very little new money entering the market, and we need one or two bullish catalysts to continue the uptrend.

One such bullish catalyst could be the elections in the US and a potential lowering of interest rates, another one could be any significant change in the geopolitical situation.

What are your thoughts on this interview? Share your opinion in the comments section below.

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