Comedians are some of our best modern-day philosophers, and as I noted earlier, George Carlin was one of the best of the best. He captured his musings, beliefs, etc. in many books. One of which is Brain Droppings, which I shamelessly stole as an inspiration for my micro-blog on LinkedIn.
FTX’s implosion has thrust cryptocurrencies and other digital assets into the daily news coverage. Back in June, I offered that the digital assets space was not quite the “Wild West” as the various authorities still had various “analog” tools at their disposal. (And indeed, if what is being reported about FTX is true, the authorities can continue to use these tools to try to hold those responsible to account for their actions.) Below I offer a few more of my brain droppings in this space.
The SEC’s proposed “due diligence” rule (proposed rule 206(4)-11) now takes on an entirely different context.
Quoting the interim CEO in the article “From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented.”
This is horribly ironic considering that the blockchain technology behind these digital assets purports to provide an immutable, decentralized record to prevent such misconduct. If the reports are true, this is “old school” misconduct – not the result of the regulatory world failing to keep up with technology. Query how this is going to impact the debate about how to regulate this sector.
Query how this will impact the substance and/or timing of the cryptocurrency regulatory regime.
Interestingly, the entity watching the watcher of certain digital assets would be . . . the Senate’s Agriculture Committee. Crypto “mining farms” could take on a whole new context.
As many have observed, digital assets or cryptocurrencies as an asset class have an uncertain regulatory future. Are these securities? Commodities? Something entirely different? We’ll see.
From where I sit, the blockchain technology that helps drive these innovations is on a more interesting path. Witness the efforts on Wall Street to use distributed ledger technology to make transactions more efficient. (Having recently gone a few rounds with a car dealer concerning a title, I can think of at least one other industry that could benefit . . . )
Caroline D. Pham on Twitter: Read my statement on #SEC v. Wahi, regulation by enforcement & #CFTC authority #crypto #digitalassets #DAO
I don’t usually pay too much attention to the back and forth on social media, but when I do, it is when the regulators criticize one another about how to regulate #crytocurrency. This is remarkable. Not only for the content, but the format.
Newton’s Third Law of Motion – for every action there is an equal and opposite reaction – applies to regulators as well. Witness a reaction to the SEC’s Wahi complaint.
I have to believe that the digital assets space would welcome regulatory clarity. It is hard to plan the path forward with so much uncertainty around this asset class.
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