Regulators Must Avoid Generalizing Crypto Companies

abdorahman.arman

Updated 2023/04/27 at 8:17 AM

2 Min Read

In early 2023, it was reported that Celsius founder Alex Mashinsky was sued by the New York Attorney General for defrauding investors by covering up the dire position of his firm while still accepting their deposits. A judge has ruled that the $4.3 billion held in Celsius’ various crypto interest-bearing accounts belonged to the failed business, not its customers. At the same time, Binance has been circling around with the Department of Justice and is now being investigated for connections to American hedge funds. However, it is not Binance and DCG who should be targeted.

The malicious individuals at the helm of FTX, Celsius, 3AC, and Terra Luna caused the problem, and justice must be served. The crypto industry is moving forward to create a more robust and safer ecosystem that is free from scammers. The crypto industry is still young, and it has not yet had the luxury of centuries of trust-building that traditional financial institutions have enjoyed.

Blockchain technology and crypto ideals are not the enemies. Instead, it is the individuals who abused trust and cheated their way to building billion-dollar companies that should pay the price. Digital Currency Group (DCG), the owner of Genesis, is also being investigated by the Department of Justice and Securities and Exchange Commission. It is DCG’s connection to FTX that is causing regulatory scrutiny and adversely affecting customer confidence. Legislators need to act fairly and justly, and they must not drag innocent people into the mix as they try to regulate crypto. It is worth remembering that almost nobody went to jail for the reckless behaviour of global financial institutions that led to the 2008 financial crisis that necessitated $3 trillion in government bailouts. The same financial institutions have modelled modern crypto systems that are now failing us in the same way, with eerie similarities. Regulators must avoid tarnishing all crypto companies with the same brush and instead target those responsible for the fraud.