The Crypto Industry’s Solution for Regulation: We’ll Handle It
Big exchanges and investors say traditional agencies don’t have the tools or expertise to oversee the sector.
The cryptocurrency industry suddenly found itself in the crosshairs of a host of U.S. state and federal regulators this fall, facing millions of dollars of fines, threats of lawsuits, and warnings of new rules to come. Crypto executives say the abrupt—and sometimes overlapping—spate of enforcement threatens to chill innovation, especially in areas where it’s not clear which laws apply. Their solution? Let the industry help regulate itself.
Major exchanges including Coinbase and Gemini and prominent investors like Andreessen Horowitz have floated the idea of a crypto self-regulatory organization (SRO), arguing it could be better suited to oversee the new and complex industry on some issues than traditional agencies, which have struggled to apply decades-old rules to the new market. Supporters say an SRO could be more agile in deciding on rules around new products, using its members’ expertise and resources.