Gary Gensler could hardly have made himself clearer: He and his colleagues at the Securities and Exchange Commission could not be less interested in what cryptocurrency exchange Coinbase thinks about how cryptos should work, be regulated, etc. To his credit, Coinbase Brian Armstrong—not usually interested in listening to what others have to say—has on this occasion heard him loud and clear. And he’d like it to be the last time he ever has to listen to anything Gensler, or anyone who might one day sit in Gensler’s chair, ever again.
The largest U.S. cryptocurrency exchange wants Congress to block the Securities and Exchange Commission from overseeing the nascent industry and instead create a special regulator for digital assets…. It says digital assets should have one designated regulator, as opposed to facing the threat of regulation from multiple agencies such as the SEC or Commodity Futures Trading Commission…. The company’s policy plan says a single regulator would eliminate the need for piecemeal oversight by a multitude of federal and state agencies that crypto firms also have to deal with. A private, industry-funded entity—overseen by the stand-alone federal regulator—would monitor exchanges and dealers for signs of manipulation or fraud, the Coinbase document says.
Indeed, why should cryptocurrencies have to operate under the same rules and oversight as everyone else? And just look how well self-regulatory organizations work elsewhere in finance!
As you might imagine, Gensler does not think much of all this.
Speaking at a congressional hearing last week, Mr. Gensler said, “I would say, cautionary note: If Congress were to carve something out of the securities law, it could also undermine 90 years of economic success and undermine the 7,000-plus issuers now who would say, ‘Well, wait a minute—there’s regulatory arbitrage.’ ”