THE bear market has been the daily newspaper of the crypto industry for many months. A situation linked to the crisis of confidence that the sector is going through, following the collapse of several firms. But could we have avoided or limited this wave of spectacular shipwrecks? This is suggested by recent revelations from prominent industry players.
Have American regulators lacked foresight?
Some crypto market players no longer hesitate to openly attack US regulators by pointing out their shortcomings. Staci Warden had reframed the Securities and Exchange Commission (SEC) a few days ago. It’s the turn of Jesse Powell and Caitlin Long to perform the same exercise.
These leaders, respectively of the Kraken exchange and the financial institution Custodia Bank, expressed their dissatisfaction with the steps taken by the regulators. Each of them criticizes the fact that the latter have not taken into account their alerts on crypto fraud practices.
Several months before the collapse of FTX, Caitlin Long says she provided regulators with evidence of acts of bad faith.
“I turned over evidence of probable crimes to law enforcement months before this company imploded and caused losses to its millions of customers”said the leader, in a tweet published on February 17.
Same story for Jesse Powell. The latter said he was annoyed that his reports “manifestly illegal activities”, were ignored by the SEC. Of the “red flags” which he had nevertheless agitated for several years. For him, this contempt denotes a certain lack of foresight on the part of the regulators. The latter having the responsibility of anticipating risky situations in order to protect the actors.
Are the companies exasperated by the authorities’ approach?
Crypto companies seem exasperated by the tough approach regulators are currently taking to turn the industry around. That’s what the chain reactions of these crypto business executives seem to suggest. They denounce the fact that their companies are taken for models of fraud. This, while they have, in good faith, repeatedly reported threats to the industry.
They call on the American authorities to rethink the mechanism of regulation, currently focused on repression, and which, according to them, is misguided.
“The country and regulators need to sit down with credible people in the crypto industry, to develop a regulatory approach that doesn’t thwart the innovation potential of the industry,” said Caitlin Long. This new development is probably a sign that market regulation cryptos still has a long way to go.
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