The cryptocurrency industry suddenly found itself in the crosshairs of a host of U.S. state and federal regulators this fall, facing millions of dollars of fines, threats of lawsuits, and warnings of rules to come. Crypto executives say the abrupt—and sometimes overlapping—spate of enforcement could chill innovation, especially in areas where it’s not clear which laws apply. Their solution? Let the industry help regulate itself.
Major exchanges including Coinbase and Gemini and prominent investors such as Andreessen Horowitz have floated the idea of a crypto selfregulatory organization (SRO), arguing it could be better suited to oversee the new and complex industry on some issues than traditional agencies, which have struggled to apply decades-old rules to the new market. Supporters say an SRO could be more agile in deciding on rules around new products, using its members’ expertise and resources.
“The job of a regulator is not easy when you’re confronting something new,” says Greg Xethalis, chief compliance officer at crypto investment firm Multicoin Capital. “The question is, how do you get to an environment where the regulatory infrastructure can be more nimble?”
This story is from the November 22 - 29, 2021 edition of Bloomberg Businessweek.
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This story is from the November 22 - 29, 2021 edition of Bloomberg Businessweek.
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