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Representations of cryptocurrencies including Bitcoin, Dash, Ethereum, Ripple, and Litecoin can be seen in this illustrative photo taken on June 2, 2021. REUTERS / Florence Lo / Illustration
Stricter regulation of the cryptocurrency space is needed to help institutional investors learn about digital assets and get the burgeoning asset class off the ground, said Mike Novogratz, founder of the company on Wednesday. Galaxy Digital crypto investment.
“We need regulation,” he said at a conference hosted by Piper Sandler. “It’s an unpopular opinion in crypto circles, but if you want institutions to join the revolution, you need some regulation.”
Bitcoin, the largest cryptocurrency, jumped to nearly $ 65,000 in April, but has since lost about half of its value.
U.S. Securities and Exchange Commission Chairman Gary Gensler, who taught a course on blockchain – the technology behind bitcoin – at the Massachusetts Institute of Technology, said he would like to see more regulation around cryptocurrency exchanges. Read more
The clearer the cryptocurrencies the better, said Novogratz, former hedge fund manager at Fortress Investment Group and partner of Goldman Sachs.
“We have a lot of non-bank banks in the space that if I were to head the SEC I would regulate,” he said. “They get deposits, they have huge leverage, they have an asset-liability imbalance.”
He also said he would like to see the approval of a bitcoin exchange-traded fund and for the SEC to create a “regulatory sandbox” – a testing ground for business models not protected by current regulations. – where small businesses could experiment with the initial part. offerings or fundraising.
The SEC has taken the position that initial coin offerings are securities offerings and therefore are subject to the agency’s offering rules, which require companies to file registration and disclosure documents.
“They regulate through litigation,” Novogratz said of the SEC, “and it’s not a great way to regulate and so my pitch would be clarity, clarity, clarity.”
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