Barclays’ head of digital policy, Nicole Sandler, argues that policymakers intentionally didn’t regulate crypto earlier because they thought it would die.
However, cryptocurrencies have continued to grow and policymakers are now waking up to the need for regulation.
Despite the recent regulatory crackdown in the US, Sandler insists that crypto’s technology is not the problem, and that bad actors and slow regulation are the main issues.
Barclays’ head of digital policy, Nicole Sandler, recently argued on a panel at the Citi Digital Money Symposium in London that regulators intentionally left the crypto market to do what it wanted, thinking it would eventually die out. However, as the market continued to grow, regulators realized the need to regulate it. Sandler drew from her experience in 2016 when she discussed a legal framework around digital assets with the European Commission and reiterated that the delay in regulation was not due to the nascence of the technology but was a choice to see where the market went. However, regulation takes time from start to finish, and Sandler believes that regulators now know that they have to regulate the crypto market.
Sandler also stated that the collapse of FTX had nothing to do with the technology. She insisted that though regulations would have certainly helped, the exchange’s downfall revolved primarily around a “bad actor.” The firm’s terms and conditions “didn’t say you can take your client funds and use it for something other than what they’ve said.” The Securities and Exchange Commission (SEC) has been cracking down on various crypto firms, charging Sam Bankman-Fried and Nishad Singh with defrauding investors. The SEC also issued Coinbase with a Wells Notice, alleging that Coinbase’s staking products constituted unregistered securities.
The regulatory crackdown has been especially fierce in the United States, and the crypto community has been vocal about their frustration with the regulatory actions. The delay in voting on the European Union’s proposals to align crypto rules across its 27 member states until April has added to the frustration. People have criticized the SEC chair, Gary Gensler, who has been the target of the crypto community’s ire. However, Ijeoma Okoli, another panelist, stated that Gensler’s approach was not to target crypto, but it was his M.O. since his time at CFTC about ten years ago in the aftermath of the financial crisis.
In conclusion, regulators intentionally left the crypto market to do what it wanted, thinking it would die out, but now they see that it has grown and needs to be regulated. The delay in regulation was not due to the nascence of the technology but was a choice to see where the market went. The SEC has been cracking down on various crypto firms, and the crypto community has been vocal about their frustration with the regulatory actions. However, it is crucial to understand that regulation takes time from start to finish, and regulators now realize that they have to regulate the crypto market.