WASHINGTON, D.C.—Dennis Kelleher, Cofounder, President, and CEO, issued the following statement regarding a letter Better Markets sent to the leadership of the U.S. House of Representatives raising questions regarding provisions in the crypto market structure legislation that passed out of committee this summer:
“The crypto legislation pending in the House raises serious questions about investor, consumer, markets, and financial stability protections, as outlined in a letter sent today. Whether one supports or opposes any legislation, consideration of these key issues should inform the debate.
“That debate should recognize that the preeminent status of the U.S. capital markets is at stake. That’s because unleashing crypto crooks on investors and our capital markets without proper protections puts the reputation of those markets as the best place for investors around the globe to send their money at risk. Investors only send their money here because the U.S. markets are well-regulated, and investors correctly believe that while their investment might lose money they won’t be wantonly ripped off and lied to about their investments. That’s why it is vital for everyone to ask the hard questions about any claimed regulation of crypto.
“Many efforts to create a new regulatory system for cryptocurrencies pose serious threats not only cryptocurrency markets but also traditional financial markets. Many of these provisions appear to create new market structures that look good but will not work due to loopholes, exclusions, ambiguities, or lack of funding or clear authorities. That will engender a false comfort that will induce even greater investments into crypto by unsuspecting investors lulled into a false sense of protection. However, many of the actual provisions do not appear to result in meaningful or effective oversight or regulation. Enacting weak, loophole-ridden, de facto deregulation rather than holding these investment schemes and products to the time-tested existing laws that protect investors – or their genuine equivalent – virtually guarantees a disaster.
“The risk is killing the golden goose (our markets) that laid the golden egg (a vibrant, growing economy funded by those markets). Investor confidence and trust are hard to gain, but easy to lose and, when gone, very difficult to regain. After a 14-year long history of deceit, fraud, manipulation, theft, commingling, and widespread illegality and criminality, as well as the loss of trillions of investor dollars, any crypto proposal must be scrutinized carefully and thoughtfully. That is why we have raised the issues in our letter.”
The full letter can be found here.
Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.