At the Citi 10th Annual Digital Money Symposium, which took place in London on March 30th, Barclays’ Head of Digital Policy Nicole Sandler offered an interesting explanation for the late response of policymakers to the cryptocurrency markets. She suggested that many policymakers expected the market to fizzle out entirely, rather than grown as explosively as it has in recent years. However, Sandler also highlighted that it takes a long time for regulation to be implemented, leaving many of these players scrambling for control.
In the US, the Securities and Exchange Commission (SEC) has taken a more aggressive approach in the wake of some high profile collapses in the space, most notably Sam Bankman-Fried’s FTX empire in November. The SEC charged both Bankman-Fried and Nishad Singh, the exchange’s co-lead engineer, with defrauding investors. Sandler suggested that, while unfortunate, the FTX collapse was more attributed to bad actors than poor technology.
The SEC pursuit continued on March 22, when Coinbase was issued a Wells Notice over allegations that its staking products constituted unregistered securities - an issue Coinbase finds particularly frustrating, as they had allowed US investors to take part in crypto for years without issue. Chairman Gary Gensler has faced a great deal of criticism for his stance on this matter, though fellow panelist Ijeoma Okoli pointed out that Gensler faced similar uproar in his position as Chair of the Commodity Futures Trading Commissioners (CFTC) following the financial crisis.
Overall, Sandler's input at the event highlighted the tension between regulators and the crypto market, as disagreements over jurisdiction and implementation speed have ultimately resulted in a backlash from the community at large. In an ever-evolving market such as this, it is becoming increasingly evident that clear rules of engagement must be established. This cuts both ways, however, as they must be fair on both the regulatory and cryptocurrency sides of the equation. It is only when each side is satisfied that any real progress can be made.
Benjamin Anderson
- 2023-04-02
Exploring Policymakers' Late Responses to Cryptocurrencies
In the wake of some high profile collapses in the crypto space, Barclays’ Head of Digital Policy Nicole Sandler offered an explanation for policymakers’ late responses to the cryptocurrency markets. Read this article to learn more about the SEC's pursuit and the tension between regulators and the crypto market.
