Former US Regulator: Crypto Industry Should Take Lead on Regulation




In an opinion piece published by CNBC today, former CFTC commissioner Bart Chilton suggests that digital currency enthusiasts need to be more active in seeking regulation for their industry if they want Bitcoin to have the “bright” future that many of them envision. In the op-ed, Chilton says that there are two main reasons for the currency’s recurring problems in recent years.

His first observation is that “digital currencies like Bitcoin aren’t like stocks.” As Chilton notes, most of these cryptocurrencies have no company assets that give them intrinsic value. As a result, their value is determined solely by what buyers are willing to pay to take ownership of them.

The second reason is that they are “largely unregulated by governments. They lack the type of AML and KYC protections that banks are required to provide, and offer few customer safeguards to protect against exchange failure. On the regulatory front, there is no effective surveillance of trading, no authorized investigators, and no punitive legislation to ensure that “bad actors” are deterred from criminal activities. According to Chilton, “This all makes digital currencies exceedingly susceptible to fraud and manipulation. It's an open range for abuse.”

To remedy those apparent weaknesses, he suggests that digital currency enthusiasts shouldn’t wait for regulations to be imposed upon the industry. Instead, they should invite “appropriate regulatory oversight” and take the lead on its development.

That is likely sound advice, and it comes from a man who has spoken highly of digital currency and the blockchain in the recent past. In 2016, Chilton called for then-President Barack Obama to embrace Bitcoin and its technology to ensure that the US shared in its potential economic benefits. Moreover, Chilton seems to recognize that digitization of money is inevitable. The question is how quickly it occurs, and what form it ultimately takes.

The views expressed by the authors on this site do not necessarily represent the views of DCEBrief or the management team.

Author: Ken Chase

Freelance writer whose interests include topics ranging from technology and finance to politics, fitness, and all things canine. Aspiring polymath, semi-professional skeptic, and passionate advocate for the judicious use of the Oxford comma.

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