While government machineries are busy crafting an official policy on cryptocurrencies, the industry should step forward and form a self-regulatory body. That was one key takeaway from the conversations at Yahoo Finance’s cryptocurrency event in New York on February 7.
The participants also agreed on the point that whether or not one likes it, regulators are here to stay. It can be a good or a bad thing depending on one’s perspective. But even those critical of any government intervention in the crypto economy were perhaps a little relieved to see the way things unfolded during the all-important February 6 hearing before the United States Senate Banking Committee.
The hearing saw the heads of the SEC and CFTC expressing what could be, by and large, called a positive attitude toward cryptocurrencies.
Brian Quintenz, a member of the CFTC, pointed out that contrary to the expectations of many in the ecosystem, the February 6 hearing did not witness any of the usual fear-mongering about the fate of virtual currencies.
“One of the other takeaways from yesterday was you didn’t hear either chairman say ‘no, absolutely not, this is not safe, we must stop this at all costs.’ No one said that,” Quintenz remarked during his conversation with the media at the Yahoo event.
He also pointed out that any congressional action to mitigate the loopholes identified by the SEC and CFTC is probably a thing of the distant future. Therefore, he continued, the onus is on the industry itself to form a self-regulatory organization in order to protect itself and the investors.
There are plenty of successful examples of such self-regulatory body, including the National Futures Association and the Financial Regulatory Industry Authority, among others. If any such organization is indeed formed to self-regulate the cryptocurrency market, it will be in a good position to fetch necessary oversights of the spot market until the United States Congress finally joins the party with some on-the-ground action.
On a related note, in pretty much every panel discussion at the Yahoo event, participants kept on beating the drum of personal responsibility.
The message to anyone listening was loud and clear; be diligent with your research before investing in any cryptocurrency, more so if you do not fully understand it.
“Things go up and down… Some people put everything into one project, and I think that’s a bad idea no matter how good an idea it seems,” Goodwin Procter LLP partner Grant Fondo explained the risks facing new investors.