In recent times, high-profile scandals involving cryptocurrencies have led to increased scrutiny from congress. With the FTX scandal being one of the most significant. FTX CEO, Sam Bankman-Fried, was arrested on multiple fraud charges, including eight counts of securities fraud and money laundering, according to Investopedia.com.
These scandals have provided Congress with an opportunity to introduce crypto legislation in 2023, as noted in an article by Steven Ehrlich on Forbes.com. However, there is opposition to this move, with some arguing that it would be a mistake. According to Mick Mulvaney, both the legislative and executive branches are interested in regulating crypto and blockchain.
Regulating crypto may result in the industry moving overseas, as detailed in an article by Jeff Wilser for Coindesk.com. This is due to entrepreneurs, who founded crypto agencies, being young and childless, allowing them to work from anywhere. The economic benefits of having crypto unregulated may quickly disappear. Currently, in places like Miami and California, people work around the clock to attract money and job opportunities that come with crypto.
The Harvard Gazette interviewed Professor Scott Duke Comier about the SEC chairman’s statement that the crypto industry operates in a rule-free, “Wild West” atmosphere. Scott responded that this space needs more consumer protection, but newer wallet technologies and crypto exchanges are working to create more security and protection at the consumer-interface level. He also emphasized that regulation is necessary to prevent financial crime and scams.
In my opinion, regulating cryptocurrencies may compromise the freedom that America represents. The government should protect citizens, not control them. Additionally, regulating something doesn’t mean that bad actors, like Sam Bankman-Fried, will be stopped. There will always be bad apples in every industry, and justice should be served accordingly.
The crypto industry has thrived in recent years because it has disrupted the finance industry. Keeping crypto unregulated may allow innovation to continue, and the market should decide if something is valuable or not. If crypto is no longer valued by the market due to fraudulent practices, the market will turn away from using it.
In conclusion, regulating crypto may have significant consequences, including pushing the industry overseas and stifling innovation. While it is essential to protect consumers from fraud and scams, regulation should not come at the expense of freedom and innovation. The government should find a balance between regulation and allowing the market to decide the value of cryptocurrency.