Crypto’s no longer weird — and that’s a problem, says Gnosis co-founder

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Hey all, Liam here.

For many, US President Donald Trump has been hugely beneficial to the crypto industry.

He’s issued several crypto-friendly executive orders, stacked the Securities and Exchange Commission with a handful of pro-business commissioners, and signed landmark stablecoin legislation into law.

Equally, these developments have inspired large banks and fintech companies to expand into the space, like never before.

Still, suggests Friederike Ernst, a co-founder of Gnosis, the regulatory wins and merging with traditional financial institutions belie the technology’s true potential.

Gnosis built and designed the Ethereum-based sidechain, Gnosis Chain; developed the multi-signature crypto wallet, Safe; and deployed a crypto payments network, Gnosis Pay.

“Why a lot of us got into [crypto] in the first place was not a back-end upgrade for existing industries,” she told DL News.

“It was a paradigm shift of how platforms, money and technology can work with the people, not against the people, how things that you do on a daily basis don’t leave you open to extraction from the powers that be.”

After several years under an aggressive — even hostile — SEC, complaining about the current administration’s approach to crypto is almost heretical.

Ernst is also of the camp that many in American politics, notably the Democratic Party, went too far in vilifying the industry.

“I don’t think anyone is above that or should be above the law,” she said. “But the extent to which crypto was vilified was pretty insulting. It’s difficult not to take that personally.”

But Ernst suggests that in this new era, the industry faces a very different kind of risk.

When she, Martin Köppelmann, and Stefan George founded Gnosis in 2015, the crypto industry was still very “weird.”

“Until recently, we were the weirdest from a societal point of view,” she said. “We were the magic internet money people who asked, ‘What is money?’ and ‘What makes money, money?’”

Most importantly, these questions also reconsidered the power structure ingrained in much of our financial system and advocated for new systems that promoted sovereignty, shared ownership, and individual agency, Ernst said.

In the last ten years, however, that’s all changed.

Robinhood will soon launch blockchain-based stocks, and Bank of America is now hiring a stablecoin engineer.

David Sachs, Trump’s crypto and artificial intelligence czar, declared at Davos this year that the banking industry and crypto industry will become “one digital assets industry.”

It is, in many ways, what many have been hoping for.

Not Ernst.

“I got into this for the agency and the ownership,” she said.

“If you now look at Robinhood and Bank of America, are these values there? I would argue that they’re not.”

Liam Kelly is DL News’ Berlin-based DeFi correspondent. Have a tip? Get in touch at [email protected].