Opinion | Yes, regulate crypto. But don’t kill it.
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The Nov. 10 editorial “Regulating crypto might end it. And that’s just fine.” noted that Sam Bankman-Fried’s crimes were not unique to cryptocurrency. Indeed, the highly regulated world of traditional finance is no stranger to scam artists and frauds — even so, the editorial argued that crypto should be regulated out of existence.
About 20 percent of American adults have purchased crypto and even more have used blockchain networks. The technology will not simply disappear. Regulation should ensure consumers can transact in markets with integrity — not pick winners and losers. Crypto needs clear rules that distinguish between the crypto casino and the blockchain world computer poised to revolutionize ownership of the internet.
Proper regulation would keep responsible innovation on our shores. Instead of relying solely on after-the-fact fraud enforcement actions, Congress should give the Commodity Futures Trading Commission and the Securities and Exchange Commission appropriately defined roles in overseeing the industry. They should hold centralized crypto companies accountable when they fail to protect consumers and establish a framework for blockchain companies to move toward community ownership.
Most important, good regulation would ensure the future of the internet is not solely controlled by a handful of tech companies, including by creating stronger revenue streams for artists, democratizing finance and giving consumers control over their data. Regulation won’t eliminate fraudsters, just as it hasn’t in traditional finance, but it can protect consumers and empower responsible innovation.
Other major economies aren’t waiting. American policymakers should act now and do so in a way that responsibly moves the industry forward, not one that destroys it.
Brian Quintenz, Menlo Park, Calif.
The writer is global head of policy for a16z crypto and a former commissioner of the Commodity Futures Trading Commission.
The Nov. 10 editorial argued that ending crypto would be “just fine.” Better regulation of cryptocurrencies and crypto markets is clearly needed to make fraud and tax evasion more difficult in the crypto space. And fraudsters such as Sam Bankman-Fried must be brought to justice for their crimes.
But there really are babies in that bath water. Blockchain technology allows for useful applications of secure, decentralized accounting of all transactions in a network, including the development of “smart contracts” and digital applications built on blockchains. These are powerful tools that are now being combined effectively with artificial intelligence, for example, to ensure that artists and writers get paid for their work. To kill all of this would do much more harm than good.
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