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Cryptocurrencies have been around for over a decade. Despite significant growth, the lack of regulations has been detrimental to the space. In fact, most regulators’ initial reaction has been panic across several countries.
The war between regulators and crypto
Regulators around the world were quick to pay attention to the crypto-market’s rally after May 2020. In the United States, the SEC filed a lawsuit against Ripple and its two executives alleging the sale of over $1.3 billion through unregistered securities.
While this paved the way for the crypto-industry to demand greater regulatory clarity, regulators instead focused on bringing down businesses that did not adhere to traditional finance norms.
Coinbase, for example, has been hit with a securities lawsuit for making false claims during its Nasdaq debut. Although it is difficult to say how many lawsuits are currently pending between regulators and crypto-businesses around the world, the frequency of these lawsuits has undoubtedly increased. So, were regulators slow to catch up with the crypto-train?
Crypto-regulations – “a double-edged sword”
According to Ethereum co-founder Anthony Di Iorio, regulators playing catch-up with entrepreneurs must strike a fine balance. He called it a “double-edged sword,” adding that the strict actions of regulators have forced many out of the field, including Di Iorio.
The Ethereum co-founder announced his departure from the space earlier this week, citing personal security concerns. Nonetheless, Di Iorio believes that governments and regulators should collaborate closely on the issue of cryptocurrencies with industry leaders and entrepreneurs. Today, the majority of the community shares this sentiment.
Di Iorio added,
“It’s different country to country, but the ones that understand [crypto] and know where things are going will be the ones who come out of this better. The countries that figure that out are the ones that are going to improve their economies, get more jobs.”
The tale of two entrepreneurs
Interestingly, regulators aren’t the only ones taking note of crypto. Technology leaders like Elon Musk and Jack Dorsey are popular promoters too. Dorsey has been an active proponent of Bitcoin for a long time, with Square Inc. now building a decentralized finance [DeFi] business using BTC.
Meanwhile, Musk isn’t far behind, holding Bitcoin despite environmental “concerns.” In fact, Tesla also disclosed the purchase of Bitcoin worth $1.5 billion and as per its latest earnings call, the company is still holding on to this sum.
Musk recently stated that he will support Bitcoin again once these concerns are addressed, after publicly citing the environmental cost of mining Bitcoin. In response to Musk’s recent actions, Di Iorio stated,
“A number of people potentially have the ability to create massive amounts of change. I’m just really wishing that their energy is going to be focused around educating people, and not having fun with something that’s so important.”
Despite his support for Bitcoin, Dorsey’s efforts to educate the general public have been lacking. Similarly, Tesla’s CEO has abandoned the Bitcoin cause in favour of Dogecoin [DOGE]. In fact, Musk has previously been accused of pumping and dumping.
So, who is at fault?
While blaming regulators and moving on will be easier, it will not solve the problem. Education is still important in the adoption and regulation of cryptocurrencies. Industry leaders such as Musk and Dorsey will be crucial in this regard.