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Regulating Crypto and Weekly News!

Ether Capital Newsletter
Ether Capital Newsletter
Entrepreneurs and businesses in crypto agree that the space needs to be regulated - the question is how much and by whom?
This week was a perfect example of some of the confusion, as it was reported that the White House was considering an aggressive tack for crypto south of the border.
You may be asking - why the White House and not another agency?
It’s because crypto is a new asset class that doesn’t fall neatly into existing regulatory structures.
For example, the U.S. Securities and Exchange Commission (“SEC”) has asserted its jurisdiction over crypto:
At the same time, however, a former commissioner of the U.S. Commodity Futures Trading Commission (“CFTC”), Brian Quintenz, says crypto isn’t under the SEC’s purview at all:
So who’s right here?🤷‍♂️
You can’t blame people for being confused.
Which leads us to another major highlight of the week - a speech by SEC commissioner Hester Peirce in which she laid bare some of the regulatory shortcomings in crypto and their effects.
Hester Peirce on Capitol Hill, 2017
Hester Peirce on Capitol Hill, 2017
Here are a few notable excerpts from her speech:
On crypto as a lawless ‘Wild West’, she says:
“The persistence of both self-regulation and calls by the crypto community for clarity from government regulators suggest that lawlessness is not the prevailing culture of the crypto frontier.”
On crypto companies complying with securities laws, she says:
“We have done little during my nearly four years on the Commission to explain what [crypto compliance] would look like… deeming digital assets to be securities means that platforms that trade them… have to register with us, but they cannot operate as a registered entity under our existing rules so they [are not] able to register.”
On crypto regulation going forward, she says:
“If we intend to demand registration of entities in the crypto space, we have to give our staff the permission to do the hard work of figuring out how the rules will apply given the unique aspects of the business and to seek broad public input through a transparent regulatory… process.”
Given the complex issues surrounding crypto, it’s no surprise that one of the top venture capital firms in the U.S., Andreessen Horowitz, was on Capitol Hill this week to convince lawmakers to adopt a flexible regulatory approach to the space. The firm’s global head of policy argued that:
And yesterday, Coinbase, one of the largest exchanges in the U.S., called for digital assets to be regulated under a separate legal framework by a single federal agency. Its CEO penned an op-ed in the Wall Street Journal which included this excerpt:
“[Crypto] businesses have little visibility into what regulators expect of us [and] positions regulators take often aren’t applied in ways that seem consistent or equitable… A new framework for how we regulate digital assets will ensure that innovation can occur in ways that are not hampered by the difficulty of transitioning from our legacy market structure.”
The stakes are high - as we’ve written in this newsletter before, it’s important to get crypto regulation right!
Newsworthy Links and Highlights:
The billionaire investor said in an interview that Bitcoin is “better than gold” but that of all cryptocurrencies, Ether has the “most upside.”
Coinbase announced plans to launch an NFT platform and within a day had amassed more than one million emails on their waitlist.
The $95 billion payments company is re-entering the crypto space after leaving it in 2018. It plans on building “the future of Web3 payments.”
This week Dimon expressed skepticism about Bitcoin’s hard cap of 21 million coins. As the author notes, he’s not wrong but “he sure ain’t right.”
As always, feel free to contact us at info@ethcap.co with any comments or questions or just to say hello.
Thanks for reading - until next week!
Ether Capital (NEO:ETHC) is an Ethereum ecosystem investor based in Toronto, Canada. Ether Capital selectively invests in projects, protocols and businesses that leverage the Ethereum ecosystem and Web 3 technologies. For more information, visit www.ethcap.co.
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