In Davos, crypto and blockchain companies are increasingly present at the World Economic Forum’s annual event

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DAVOS, Switzerland As the World Economic Forum’s annual gathering of billionaires and swagger kicked off this week, a redemption party was in full swing down the road. Crowds had spread out onto a red carpet in front of a whiskey tasting at the Blockchain Hub.

Restoring confidence in digital assets, an outdoor sign read.

Whiskey had its work cut out for it.

After a year of massive losses, arrests and legal troubles, many of the world’s biggest cryptocurrency and blockchain companies are back in Davos this year, hoping to consolidate or resurrect, if necessary, image of the industry and to attract new investors.

The annual gathering of the global elite known for its concentration of billionaires, bankers and heads of state has become an unlikely destination for an industry that has long touted itself as an alternative to traditional banking, beyond the reach of governments and financial institutions. And while some key players, including Tether, a crypto giant that has handed out free pizza for at least conference years, are missing this week, many others are doubling down on their presence here, both on official panels and in private stores, yoga studios and churches they have turned into promotional event spaces for the week.

Arrive with guns, said Dante Disparte, chief strategy officer of Circle, a digital currency and payments company. He added that 2022 was a crypto dot-com-bust time. Now we’re bringing in key executives and putting out a lot of content that shows the technology is here to stay. It’s sustainable. It is a crucial element in the modernization of the global financial system. It’s an agenda-setting moment that matters.

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The company, which issues a widely used cryptocurrency pegged to the U.S. dollar, has doubled its investments in Davos this year, with two storefronts on the main street and more than a dozen employees. Like many of its peers, Circle is focusing this year on topics like trust and responsibility, calling this time a great reset for crypto.

This reset follows a turbulent year for the industry. Cryptocurrencies such as bitcoin have lost more than half their value in the past year. Whole businesses have collapsed, including $32 billion cryptocurrency exchange FTX, whose spectacular implosion in November landed its founder in jail and raised bigger questions about the long-term survival of the industry. ‘industry.

Bitcoin’s value fell sharply last year, from over $45,000 in March to around $16,000 in November. But it has seen some revival in recent days and was trading above $21,000 this week, giving its followers a burst of optimism.

The crypto winter has arrived. And it looks more like an ice age.

At the same time, government regulators are beginning to comb through the industry with new urgency, issuing fines and subpoenas.

As a result, many blockchain companies, which provide information storage technology to power the crypto market, are focusing on more neutral topics such as sustainability and innovation. The circle construction is adorned with the slogan: Solving Real World Problems. Hedera, which has a token that has lost 80% of its value over the past year, is touting itself as the greenest blockchain.

In the wake of FTX, we have a real opportunity, said Nilmini Rubin, Head of Global Policy at Hederas. You see the bad actors disappear and what you are left with are the more stable and better governed crypto actors. This is an opportunity to reclaim what crypto is and can be.

Still, some question the optics of spending heavily in Davos at a time when so many, along with pension funds and venture capitalists, have seen their investments wiped out.

When FTX collapsed, some of the biggest criticisms of the industry were for its excesses: the excessive partying, the celebrity culture, the lavishness of the whole lifestyle, said Yesha Yadav, professor of law at the University Vanderbilt whose work focuses on cryptocurrency and financial markets. . So, at this point, doubling down on those same things in Davos is a shock.

The criticism, however, is not limited to a single industry. The annual gathering here has been a frequent target of critics who say it is tone deaf and superficial, a place where the elite can debate noble topics like global unity and climate change while taking little action. This year, the war in Ukraine and heightened fears of a global recession continued to dominate much of the conversation, both at official events and drunken afterparties.

Meanwhile, big-name regulars, such as Amazon, Microsoft and Facebook’s parent company Meta, continue to have a significant presence here despite thousands of recent layoffs. Salesforce, which this month announced plans to cut about 8,000 jobs, or 10% of its workforce, has three storefronts, the most of any business, on the Hallowed Drive. (Amazon founder Jeff Bezos owns The Washington Post.)

Will Davos save the world or put it out of its misery?

The outsized presence of Cryptos in Davos began last year, when currencies like bitcoin and ethereum were flying high. The conference dedicated two official panels to blockchain technology, and companies spent heavily on advertising and hobnobbing. Large billboards brandishing buzzwords like blockchain and Web3 filled the streets and surprised many long-time conference attendees.

This year, that presence is even bigger: there are seven blockchain sessions on the official program, including panels on regulation and digital tokens.

This is an area we spend a lot of time on, said Brynly Llyr, head of blockchain and digital assets at the World Economic Forum. Crypto isn’t always an inviting topic, but we want to demystify it to show that what you see in the headlines isn’t what the tech is about.

Many in the industry say the latest uproar is just a gasp. They dubbed this moment crypto winter, arguing that the recent cooling is just a cyclical correction in a market that will quickly rebound. But skepticism remains high, especially among those in government and traditional finance.

It feels like a last gasp for crypto, said Jason Furman, an economist at Harvard University, a former adviser to Obama and a frequent attendee at the World Economic Forum who skipped the meeting this year. It’s like an ad I saw in a magazine saying the real estate market has never been hotter. You know, these people paid for this ad six months ago, and by the time it came out, it was just plain wrong and untrue. It’s crypto in Davos.

The companies that helped create the ‘crypto winter’ of 2022

But industry executives say Davos’ glow and its ties to financial firms and global governments have become even more crucial to the industry this year as regulators introduce new rules and step up oversight. Crypto firms spent $7.1 million on lobbying in 2021, up from $2 million the previous year, according to analysis by the Center for Responsive Politics.

What the crypto industry really wants is to be established to be integrated with mainstream finance, to be regulated, but on its own terms, said American University law professor Hilary Allen. She wants the patina of regulations to attract new investors. The need for fresh money has become more pressing. So what better place to go than Davos?

Back at the Blockchain Hub funded by Casper Labs, a subsidiary of cryptocurrency issuer and blockchain company Casper, the whiskey tasting was one of more than 50 events planned over four days. Hours earlier, Anthony Scaramucci, the founder of SkyBridge Capital, which bought $10 million worth of FTX tokens, spoke at a panel about his falling out with the company’s beleaguered founder Sam Bankman-Fried.

I have to tell you that betrayal and cheating are bad on different levels, Scaramucci said. It hurt my reputation. When you have a friend who betrays you like that, it really sucks. But that doesn’t mean the end of blockchain or crypto.

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Down the block, city billboards are aware of the message. Escape the hell of control by banks and governments, says one who promotes a Crypto Castle in Germany. Another, near a parking lot, proclaims to the world’s wealthiest: Crypto is not for wealth but for freedom. And freedom is wealth.

Tory Newmyer and Julian Mark contributed to this report.

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