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A report from the economics program of the Brookings think tank American states that better regulation will benefit the cryptography industry. It states that cryptographic badets are currently in a jurisdictional gap and that the SEC should play this role.
Do not hate the game, hate the players
The report immediately marks a personal goal with the choice of title: "It's time to strengthen the regulation of cryptographic badets."
This suggests that cryptocurrency itself is inherently insecure or in need of regulation, which is clearly not the case. The report deals in fact with the regulation of cryptocurrency intermediaries, which, as the Winklevii recently noted, is something quite different.
Whatever the case may be, the Brookings report suggests that a better regulation of cryptographic companies will allow:
benefit investors in crypto, continue the development of new technologies, limit the use of crypto-badets used for illicit payments and reduce the risk of computer attacks.
In this case, we should all claim it!
The arguments of the prosecution
Again, the report tries to apply this to Bitcoin, saying it does not provide the promised "no confidence" environment. He says that Crypto-badets "created" new financial intermediaries less responsible than the big banks.
Not quite true. A fledgling industry has developed around cryptographic badets, at a time when regulators did not want to touch it. This is not the fault of Bitcoin, which simply provides a reliable way to conduct transactions between peers.
Some of the players in this new industry have taken advantage of the regulatory vacuum. There are bad players who do not register badets in the blockchain, manipulate the markets and trade against their customers. Of course, this has never happened in the "regulated" banking sector.
The report also states that inadequate regulatory oversight in cybersecurity leads to hackers. Which may be true, but then he deploys the old dark-web argument, which is not the case, and states that:
Cryptographic badets are increasingly used to avoid government-sponsored sanctions
Like those of Venezuela? Well, it gives a new angle to these poor, hungry and breaking the rules!
SECOND? CFTC? WTF?
The report states that "the new encryption exchanges and trading platforms are not subject to the traditional standards imposed on securities market intermediaries and derivatives".
However, it follows that "the SEC has jurisdiction over the cryptographic badets considered as securities" and that "the derivatives based on cryptographic badets are subject to the regulation of the TCRC … just like the platforms that negotiate these derivatives ".
Thus, the Securities and Exchange Commission is competent for cryptographic badets considered securities, which are almost all (according to the SEC)? And is the Commodity Futures Trading Commission (CFTC) competent for all platforms that trade derivatives such as futures or swaps?
So, the gap is basically … just the spot market for buying and selling bitcoins? Report author Timothy G. Mbadad recommends not needing a new regulator. Instead, the SEC should regulate this … or failing that, the CFTC.
The state of independence will be
In the very first page of the report itself, see Mbadad clearly states the "Declaration of Independence".
The author has not received any financial support from any company or person for this article or any company or person having a financial or political interest in this article. They are currently neither officers, nor directors, nor members of the board of directors of any organization interested in this article.
Hmmmm … Not currently, no. But he served as chairman of the CFTC under the Obama administration. And perhaps would be online for a similar role the next time there is a Democrat at the White House?
Mbadad is also the author of the report published on the Brookings website, in which he repeatedly refers to the third person. Surely they could have found someone else to write the article? It's a bit self-promotional and slightly schizophrenic.
Knowing this, it seems likely that Mbadad also participated in the modification of his own Wikipedia page. This is not a problem, but it is difficult to think that an independent observer would find it useful to note:
Mbadad is an accomplished cook expert … He is known to the Treasury for organizing a pastry contest among his staff.
This is not to say that Mbadad is wrong to suggest that it would be beneficial to regulate the companies that manage cryptocurrency, he simply complains in an insincere way.
Do you agree with the Brookings report that the SEC should regulate cryptocurrencies? Share below!
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