The digital assets industry remains laser focused on the looming threat of regulation, but players in the space are not of one mind on the question of how the federal government should regulate the market for cryptocurrencies.
Dan Gallagher, the chief legal officer of the online broker Robinhood
did not pull his punches when asked about the wisdom of Congress creating a new regulator for digital assets that would in theory supersede the Securities and Exchange Commission and the Commodity Futures Trading Commission as overseers of the crypto market.
“It’s one of the stupidest ideas I’ve heard in this space in a long time,” Gallagher said during a panel discussion at Georgetown University’s Financial Markets Quality Conference on Wednesday. Though Robinhood is best known for commission free trading in stocks and options, it has expanded its offerings of cryptocurrencies, including bitcoin
in recent years.
In October the cryptocurrency exchange Coinbase
unveiled a proposal for comprehensive reform of U.S. federal regulation of digital assets, urging Congress to create a new agency to regulate the industry under a different framework than is used to oversee the legacy financial services industry.
“There should be one federal regulator designated for digital asset markets,” Faryar Shirzad, chief policy officer at Coinbase told reporters at the time. “A digitally native and dynamic regulator would help ensure that the transformation of the financial system serves as many members of the American public as possible.”
Gallagher, a former SEC Commissioner from 2011 to 2015, pointed to the Dodd-Frank financial reform implementation as evidence for why creating a new regulator would do more harm than good.
“Dodd Frank set out to limit the number of agencies and provide clear jurisdiction, so they got rid of one agency and added three,” he said. “So we ended up net two plus after Dodd Frank, and with even more confusion about jurisdiction. So the idea of adding a new regulator is just plain silly.”