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The Regulation Crypto Deserves, But Not What It Needs?
CoinDesk columnist and crypto VC investor/advisor Matthew Homer has a different take on the issue of regulation for the crypto space. He says to get the kind of regulatory clarity that would benefit crypto, first crypto has to show it can raise and enforce its own standards.
One of our co-founders said as much previously, calling for the industry to practice the kind of radical transparency and accountability to which Silvermint holds itself.
The failures that have occurred in the crypto space over the past year have led some voices in the ecosystem to prophesy that “regulation is coming,” and that it’s just what the crypto industry needs to mature and evolve.
While I agree more regulation is needed and would be helpful, many in government – our federal prudential regulators in particular – seem intent on the opposite: keeping crypto outside of the regulated system.
Their posture is not, "We’ve seen what’s happened with FTX and others and think it’s time we bring regulation to the space to make it safer."
Rather, it seems to be: "We don’t want to have any responsibility for this space that we think is disreputable and risky, and we certainly don’t want to be seen as legitimizing it by regulating it."
What does this mean for founders and companies operating in this space? If the past two years were about educating government, the next two will need to be about earning their respect as a necessary precondition for trust.
This might mean starting to look more like the institutions they already regulate and are familiar with. Rather than saying you deserve to be part of the financial system, you’ll need to show it.
One way to do that is by putting in place time-tested best practices that exist in other areas of financial services: corporate governance, risk management, internal controls and a culture of regulatory compliance.
Some in the crypto space already take these things seriously, but we need more to do so because it will be up to those working in space – not government – to make it trusted and last the test of time.