Coinbase’s proposed regulator is “one of the stupidest ideas” in a long time according to Robinhood executive Dan Gallagher. He explained why he doesn’t think it will work and we are reading more in our latest Coinbase news.
Robinhood’s Dan Gallagher commented on Coinbase’s proposed regulator as an ideal solution for crypto’s regulatory issue which was a federal regulatory body. Gallagher thinks that this is one of the stupidest ideas he has ever heard, as he told attendees at the Georgetown University Financial Markets Quality Conference. The attempt to transfer authority from agencies like the SEC and the CFTC will be incomplete and will only crowd the party.
Coinbase’s Digital Asset Policy Proposal presented a way to minimize the number of agencies that cryptocurrency actors could face so to avoid fragmented and inconsistent regulatory oversight of the innovations, the responsibility for digital assets markets should be assigned to one federal regulator. Coinbase issued a statement saying:
“We welcome any discussion on how to reform a system that isn’t fit for purpose when it comes to crypto. But to be clear, our proposal never called for a new regulator – it was regulator agnostic. What it calls for is crypto-forward proposals and not using old precedents for new technology. We welcome the debate and if others have concrete ideas, share them. There’s space for everyone to contribute.”
A few other agencies are keeping an eye on the digital asset industry. The SEC is charged with regulating securities which are tradeable investments in enterprises that try to make a profit. The SEC chairman Gary Gensler declared that Coinbase has plenty of tokens that could potentially be securities even though it Is not licensed to operate as a stock exchange. There’s CFTC as well with Rostin Behnam in the acting chair, requesting a confirmation hearing so it can be the main player in the field for digital assets despite the agency’s mandate to regulate the derivatives markets and not commodities.
A handful of other government actors were involved in this space as well including the Office of the Comptroller of the Currency who was led by former Coinbase executive Brian Brooks as well as the Financial Crimes Enforcement Network. There’s also the Federal Deposit Insurance Corporation and the Federal Reserve. Gallagher served as a commissioner on the SEC during the Obama administration and he said:
“Dodd Frank set out to limit the number of agencies and provide clear jurisdiction, so they got rid of one agency and added three. So we ended up net two-plus after Dodd Frank, and with even more confusion about the jurisdiction. So the idea of adding a new regulator is just plain silly.”
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