Crypto world braces for more attention from regulators

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Fittingly for a day in which Securities and Exchange Commission Chairman Gary Gensler made no effort in his testimony to Congress, the main topic of the Blockworks crypto conference on Tuesday was undoubtedly regulation.

Why it matters: The crypto world hates and needs regulation to an equal extent.

State of play: Few if any US crypto companies can say they are regulated by the SEC or any other national regulator and have passed that agency’s scrutiny.

The SEC complains that crypto companies like Coinbase don’t come to it for regulation. This is even if these companies trade tokens on a daily basis that can be considered securities, even though Coinbase is a real exchange and even if a boost from the SEC would confer a degree of legitimacy that would be extremely reassuring to them. small and large investors. Crypto companies complain that they cannot wait for regulatory approval based on decades-old securities laws, while the rest of the world is forging ahead with innovations like distributed exchanges that don’t ‘don’t even have a business entity to regulate. , even a nationality which could determine the regulator of the country to approach.

Overview: Existing players in the crypto space have experienced extreme volatility in the price of crypto assets and accompanying huge speculative gains and losses. They have also witnessed a large number of fraud, theft and other crimes. Crypto investors today don’t see it as a safe place to park funds and don’t feel like they need some sort of regulatory control.

A safe and reliable financial system, however, is the destination many crypto companies claim to aspire to, especially with the rapid growth of dollar-linked stablecoins. an attempt by Coinbase to create a safety beacon in the crypto world, a guaranteed savings account denominated in dollars.

The bottom line: the bigger the money, the more conservative investors demand clear rules and regulations. The guys at DeFi want TradFi money, but they don’t want rules, ”Ledger’s Joel Edgerton said at the Blockworks conference. “It doesn’t work like that.

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