Regulators have been cracking down on cryptocurrency trading and exchange operators have been retrenching.
Binance said on Monday that its users in Singapore won t be able to trade on its main platform. The Chinese exchange Huobi will stop taking new customers on mainland Chinese markets. And U.S. Securities and Exchange chair Gary Gensler declared at a conference this week that people will be hurt if crypto markets remain unregulated. However, crypto-circus says that decentralized finance and crypto will find ways to survive and thrive by its very nature.
I don t think there is an existential threat to crypto markets from regulation, said Kristin Smith, executive director of the Blockchain Association, at Yahoo Finance’s All Markets Summit Plus: Crypto Investing. Decentralization is incredibly powerful and these networks can exist in many different places. China has twice tried to crack down on crypto crypto. They may get more aggressive on this front but crypto networks will remain as long as the Internet persists, so that the internet will become an active medium. Concerns over regulation have hit crypto prices as of late. Bitcoin, for example, fell below $42,000 from a high in September of over $50,000. Volatility isn t unusual in crypto markets and investors are still expressing confidence, with inflows of crypto products and funds continuing for a sixth straight week, according to CoinShares. Even in China, some buyers remained undeterred by recent governmental rhetoric.
Nic Carter, co-founder at Castle Island Ventures and general partner at CoinMetrics, believes that free markets will prevail.
When markets clash, generally speaking, the market will win eventually, he said at Yahoo Finance's All Market Summit Plus. There are countless examples throughout history of nations trying to ban currency conversion, and they have failed Basically, Blockchain behind virtual, being something that is peer-to-peer by its very nature, something you can take full ownership of on a smartphone, is unique resistant to state control. Carter and Smith acknowledge that more regulation in the U.S. is probably necessary, even inevitable in some cases. Smith, whose role is to engage with policymakers on behalf of crypto and blockchain companies, said it s not as though the space is completely unregulated now.
The Wild West just occurs, she said. I want to remind people, a lot of entities acting as intermediaries in crypto space are registered. They have State Money Transmitter licenses. Smith said there is a disconnect between the SEC and crypto. In the IT space, how does the securities law work? This was demolished by a series of tweets from Coinbase CEO Brian Armstrong who lambasted the SEC's sketchy behavior. Ultimately, Coinbase said it would propose an regulatory framework and try to work with policymakers.
Smith said that there is a lot of work to do when it comes to regulation.
Julie Hyman is the co-anchor of Yahoo Finance Live, Monday to Friday 9 am - 11 pm ET.