Regulation is among the biggest issues confronting the crypto industry right now. In this Block Street interview, Sam Bankman-Fried, founder and CEO of the cryptocurrency exchange FTX, broke down three areas of crypto that he believes will see changes from regulation:
- Clarity on which agencies will be licensing and regulating crypto exchanges, and what that framework will look like.
- A registration format for tokens.
- Enforcing audits of stable coins.
Bankman-Fried believes that a lot of the same principles that work for traditional asset classes like commodities or equities can transfer over to cryptocurrencies. It’s just a matter of tweaking the pieces that are digital-asset specific. For example, instead of looking at the board of directors of companies, you’d be looking at the on-chain governance of a token.
He added that the Commodity Futures Trading Commission has done a great job with crypto futures oversight, and extending that to spot markets could be completely appropriate. As for security tokens, his expectation is that the US Securities and Exchange Commission will be the primary regulator for them.
“The core thing is just having clarity around it so that customers are protected, so that regulators know who to look to, and so that the industry is able to move a lot of its volume and
liquidity
onshore,” Bankman-Fried said.
As an investor, if you’re holding crypto that becomes deemed a security, Bankman-Fried said it might be a good thing. Traditionally, it’s an indication that an asset has real cash flow, a team, and a company that’s driving value.
However, he acknowledges that it’s messy right now because there isn’t a general consensus on what licensing should look like. So the worry for an investor is that you’re no longer able to access it in the US, causing the crypto’s liquidity and volume…
