The correlation between the value of blockchain and the price of crypto
“The challenge facing blockchain companies is that this technology is so new and the regulation is unclear, in flux and different depending on the jurisdictions,” said Zach Ziliak, Managing Partner at Ziliak Law firm. “Rules that are in place now were written before the advent of blockchain and some aspects of those pre-existing rules are not conducive to blockchain approaches. It’s like companies are trying to push a square peg into a round hole.”
Zach Ziliak is a Chicago-based attorney that helps with business formation, fund launches and capital raises including initial coin offerings. He has been able to leverage many of the skills he acquired throughout his career in his latest venture Ziliak Law. We sat down and talked with Zach about his time as a quant trader, the days he spent in D.C. as a law clerk in a federal appellate court and his observations from working with blockchain companies.
Zach graduated from Indiana University before being chosen as a Rhodes Scholar to study Mathematics at Oxford University.
“Before I finished my thesis, I took a job at an investment bank. I was hired to trade foreign exchange (FX) and exotic options but while I was in training, the bank asked me to sit with the quantitative analysts and I never left that desk. I worked on FX exotics and forecasted return distributions.”
During that time, Zach went back to school at the University of Chicago to get his Masters in Business Administration. Upon conclusion, he took a job at Matlock Capital.
“It was while I was at the trading firm, that I decided to go to law school. I remember coming home from work one day and wondering what I was doing with my life,” he said. “I looked into the intersection of jobs that interested me, ones in which I felt I had some talent and ones in which I could give back in some way. This led me to focus on the academic world and government as two areas in which, if I worked hard, I could help a lot of people at once.”
Deciding law school was the appropriate next step; Zach attended Loyola University and graduated first in his class Summa cum laude.
“After Loyola, I took a job as a law clerk at a federal appellate court in Washington DC. It was around the time of the Guantanamo Bay cases,” he said. “Could their cases be heard in the US or military courts? I was looking up the ancient origins of Habeas Corpus and that sort of thing.”
After that Zach took a job at Mayer Brown, where he found himself in litigation work.
“Most people take a job as a law clerk to be a litigator so I was being offered those jobs,” he said. “However I wanted to utilize my math, trading and coding skills.”
Zach felt that he could help firms in the financial industry because he spoke their language with his thorough understanding of finance, operational risk and quantitative skills. He launched Ziliak Law in 2013 with a focus on securities and derivatives.
“Sometimes I am hired as an expert witness. Attorneys will frequently engage testifying or consulting experts to help with court cases,” he said. “When you consult, you work behind the scenes and off the record to assist on a number of related issues such as shaping arguments or helping assess damages. When you testify, you testify under oath before the finder of fact in an effort to convince that judge or jury of some conclusion. ”
Ziliak Law also does a lot of work with blockchain companies.
“We help firms invest and raise funds in digital assets as well as help blockchain companies with their compliance needs,” he said.
Zach believes that regulation around blockchain and the language in which the existing rules are written leave it unclear how those rules should apply to blockchain solutions and digital assets. He believes this leads to some people staying out of the industry for fear of guessing wrong, or others rushing in and guessing how the rules will be interpreted, thus guessing wrong at times.
“I would love to see clearer regulation in this space and not the absence of it or the current kerfuffle,” he said.
Another challenge is the volatility in the digital assets market. He sees a correlation between the money coming into blockchain and the price of bitcoin.
“When the price of bitcoin was high in December of 2017, a lot of money was being poured into these blockchain companies even if people didn’t really understand the technology,” he said. “Then when the price fell so did the popular interest.”
While Zach observes the correlation, he doesn’t necessarily think it is justified and concluded:
“The price of crypto has gone down so people believe that the technology’s value has gone down too but that is not the case,” he said. “The idea and the technology behind it has not become less valuable just because the price of bitcoin has fallen.”
*While Hehmeyer Trading + Investments is a client of Ziliak Law, information on third parties (including their views and opinions) or links to external sites should not be construed to be an endorsement by Hehmeyer Trading + Investments.