Standing idly by and letting crypto collapse is no way to maximize the benefits from this nascent technology. Instead, legislators and regulators should do their jobs: Ensure customer assets are protected and that markets have integrity; require stablecoins — tokens with values pegged to fiat currencies — to be fully backed by safe assets denominated in those currencies, such as short-term sovereign debt and central bank reserves; work with the industry to establish best practices, and enforce those standards both domestically and internationally.
So far, regulators have chosen errors of omission over commission, opting for inaction rather than risking mistakes. The result is many billions of dollars of losses, and an erosion of trust in both the industry and regulation. They need to be much more proactive.
‘Enforcement 40’ for 2020
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