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We could use crypto regulation after FTX — but let’s start with basic definitions

We could use crypto regulation after FTX — but let’s start with basic definitions

As a cryptocurrency CEO, I know how often our industry is misunderstood and criticized. Sometimes criticism is appropriate because we have yet to do our part to highlight the benefits and use cases that drive positive change. But sometimes, it’s based on the assumption that all players in this industry are equal, which is different. Skepticism recently reached new heights with the epic crash of FTX, one of the world’s largest and perhaps the largest crypto exchanges. Never Example of the need for regulatory oversight given FTX’s position, it was a huge leap to learn that they were facing bankruptcy.

When the news first surfaced, the market for digital assets experienced a dramatic decline. Customers needed to determine whether FTX or any other business in our industry is a security manager of their money. Many may wonder if there is a future for cryptocurrencies, and I understand the frustration at the hole the industry has created. But blockchain and cryptocurrencies have a future, and we must maintain sight of the usefulness and value of this technology. To do meaningful things, from optimizing supply chains worldwide to creating fair access to the global financial system. The real question is how do we build the future we want that inspired the development of this technology in the first place? And that answer is largely based on standards (both technical and industrial) and rules, some of which must come from our public.

The federal government of the United States is in a leadership position. To do this, you must provide clarity and guidance to the industry by implementing thoughtful, principles-based regulation. This kind of leadership will help create the “right” future, and with a newly elected Congress, that is a position I urge you to take. The future of blockchain and all the benefits it offers depend on it. Industry must do its part to act transparently and in the best interests of consumers, despite the lack of regulation. 

But without oversight, we will continue to see examples of companies that don’t put consumer interests first. That’s why I’m calling on Congress to pass three key measures in 2023 to give consumers the protection they need.

First, explain the definition of the legal status of digital assets: when are digital assets classified as securities, commodities, or something in between? And how is that defined? The role of government is to make this clear to big and small. Participants need to pretend that there is clarity because consumers are the losers.

Second, stablecoins need to be stable: the collapse of Terra wiped out $60 billion in value overnight. Consumers must be assured that stablecoins must be backed one-to-one by high-quality liquid assets. Stablecoins are essential to the actual utility that blockchain provides. Traffic rules here are helpful to consumers and will lead to even more innovation. Third, the exchange of digital assets.

As we saw with FTX, consumers face risk when trading and holding their assets on exchanges. While some of these risks are well known, Congress must ensure that consumers have the necessary safeguards to interact with these platforms.

My experience on the content side of the internet has taught me the importance of engaging with policymakers early on to help shape the regulation of new technologies. But I learned this lesson the hard way: we don’t interfere. Instead, we ask the government; I’m confident we could do just fine. We thought we had all the answers. There were already some internet data collection regulations, but none explained which data collection technology companies do daily.

Balancing our bottom line with the best interests of consumers created a huge gap that we thought we could fill. Today it is clear that this led to a data protection crisis in which people became products, and our collective and individual privacy disappeared before our eyes. I see certain parallels with blockchain, the emerging technology. The ecosystems developing the products and services based on this technology must continue to work with the public sector to develop 

 regulations that bring clarity and certainty. I know the potential of blockchain, and I look forward to helping forge the public-private partnerships needed to ensure greater stability in this industry.

And I hope that a new congress will suit us.

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