November 24, 2022
  • November 24, 2022

Lights up … don’t worry, Bitcoin adoption won’t be stopped – Cointelegraph Magazine

By on September 30, 2021 0

In a series of recent interviews and speeches, the chairman of the United States Securities and Exchange Commission, Gary Gensler, has called the cryptocurrency market “Wild West” due to its unregulated and supposedly crowded atmosphere. fraud, predicting that the pieces were doomed.

Lights up … is a monthly opinion column by Marc Powers, who has spent much of his 40-year legal career working on complex securities-related cases in the United States after a stint with the SEC. He is now an Assistant Professor at Florida International University College of Law, where he teaches a course on “Blockchain, Crypto and Regulatory Considerations”.

In an interview with the Washington Post published on September 21, Gary Gensler said that in history, “private currencies” did not have longevity. As stated below, I dispute this assertion. Now five months in his role as the head of this important government agency, Gensler is not only a powerful voice in the debate over blockchain use cases and regulatory considerations, but also a dangerous voice.

The concern for the crypto industry is that Gensler is a very bright and determined man, as well as ambitious. He is originally from Wharton, Goldman Sachs and previously worked at the US Treasury before becoming chairman of the Commodities Futures Trading Commission (CTFC), the SEC’s sister agency. While at the CFTC, he headed what was probably the only federal agency to create and operate implement all the requirements of the Sarbanes-Oxley Act of 2002. Not so surprising, as his biography also includes the role of special advisor to the co-author of that legislation, Senator Paul Sarbanes.

I had the honor of knowing and working with the other co-author of this historic legislation, Congressman Mike Oxley, while I was in my law firm, BakerHostetler. Mike led our Government Affairs practice while I led our National Securities Litigation and Regulatory Enforcement practice.

The two-edged sword

Given this vast experience both inside and outside of our government, Gensler knows how to get things done politically. In recent years, he has also learned and taught blockchain courses at the Massachusetts Institute of Technology (MIT).

As I said or suggested in the previous columns, it’s a two-edged sword. On the one hand, it’s good to have someone in government who understands the technology and its beneficial use cases. On the other hand, his intelligence can be used to find ways to further the interests and policies of the Biden administration, which, along with Federal Reserve Chairman William Powell and Treasury Secretary Janet Yellen staunchly hostile to crypto- currencies, the three can implement rules and policies. that could hinder the advancement and adoption of technology.

It will only get worse if there is the appointment of Willow Omarova at the head of Office of the Comptroller of the Currencybecause she has spoken publicly against the use of digital assets. It would also be quite a reversal of the policy of his immediate predecessor, Brian brooks. Brooks, at the end of the Trump administration, proposed rules and guidelines that allowed federal banks to host and maintain digital assets for their customers. Let’s see how long this warmonger Omarova takes to relax.

The pros and cons of adopting Bitcoin

On some level, you can’t fault them for being against Bitcoin (BTC) adoption as an alternative digital currency, or medium of exchange, to the physical US dollar.

Its use around the world without any government oversight or intervention frightens them and could, over time, diminish the dominance of the US dollar as the reserve currency for the world. They have the status quo of large financial institutions and intermediaries to preserve and protect. They have been government machinery for a relatively long time and they clearly believe our government is in control.

Whenever they adopt rules and policies that hamper our business or seek to regulate them, they always claim it is for our own good, for example to protect us from fraud or widespread harm and to the good of our economy, protecting us from economic depression or inflation. But we know better, don’t we?

On the flip side, the good news for those of us who believe in the promise of distributed ledger technology is that it is, in my opinion, too late. The BTC, Ether (ETH) and other cryptocurrencies travel digitally from country to country in the world is beyond the regulation of any country, including the United States of America.

That’s right, let me say it again: it’s too late. A country cannot kill it by banning its use and activities, nor can it regulate its use by the citizens of the world for the purpose of controlling BTC and its citizens. Bitcoin is now a global currency that is not owned and controlled by any country or group of currencies. It belongs to the citizens of the world.

Need proof of what I’m saying?

Look at China, which has banned cryptocurrency activity several times in recent years, but not in possession of the token. Now it bans mining and trading again. Did this accomplish the demise of BTC? No. Instead, the mining industry moved to Eastern Europe and the United States.

Look at South Korea, which required all crypto exchanges to register with its regulator by last week. Dozens did not.

Look at India, which also banned the use of BTC, until its Supreme Court overturned this law. Today, it is reported by an August analysis by Chainanalysis that India is now in second place around the world in the adoption of crypto.

Crypto is the inevitable

I have been saying since 2017 that I think we will eventually have a dual financial and economic system. There will be a global crypto economy and a parallel fiat digital currency in the form of central bank digital currencies, or CBDCs, like what Powell is working on at the Federal Reserve and what China has already rolled out to its citizens in major cities, called the digital yuan.

As a result, I take issue with the history lesson of the SEC chairman when he says that private currencies don’t last, implying that the same will be true for BTC. I do not agree with his characterization. I don’t see BTC as a “private” currency. On the contrary, it is a world currency, very public and accessible to anyone with a smartphone or computer. It is not created by a private or authorized blockchain, but rather by an unauthorized blockchain.

Although BTC is not a fiat currency created by a sovereign government, it is nonetheless a medium of exchange for the millions of people who use it every day around the world to buy things, send to parents in other jurisdictions and negotiate on its price movement. Much like the daily trade of forex traders on the price movement of the US dollar. When Gensler claims that BTC is not backed by anything, he might need a lesson to remember that since 1971, the US dollar is no longer backed by gold.

Marc Powers is currently an Assistant Professor at Florida International University College of Law, where he teaches “Blockchain, Cryptography, and Regulatory Considerations” and “Fintech Law”. He recently retired from an Am Law 100 law firm, where he built both his national securities litigation and enforcement practice team and his fund industry practice. speculative. Marc started his legal career in the Enforcement division of the SEC. During his 40 years of practicing law, he has been involved in representations including the Bernie Madoff Ponzi scheme, a recent presidential pardon, and the Martha Stewart insider trading trial.

The opinions expressed are those of the author alone and do not necessarily reflect the views of Cointelegraph or the Florida International University College of Law or its affiliates. This article is for general information purposes and is not intended to be and should not be construed as legal advice.