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March 10, 2023, 11:30:24 PM |
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Bitcoin itself needs no regulations. Any regulations that govts would try to put on Bitcoin would be to try to curb its use (and we've seen some proposals for these sorts of regulations before), so obviously those aren't needed. We don't need regulations that would make using cryptocurrency illegal, or controlling your own cryptocurrency illegal, or strongest KYC laws that make a lot of basic cryptocurrency use illegal. We don't need any of that. The regulations and laws should take into account the thing they are regulating, not just try to put old school finance rules around crypto which operates completely differently.
What are needed are regulations on crypto companies. But intelligent regulations, not just suing crypto companies retroactively for rules that didn't exist in crypto, which is the strategy US regulators seem to be putting forward.
We need centralized pegged stablecoins to be regulated precisely because they are centralized and pegged. They need to be transparently held and insured.
We need crypto exchanges to be regulated and insured so that bitcoin/crypto lost in hacks is never a loss for the customer and we know that these exchanges are holding all customer funds in a safe way and also none of the FTX style fraud is happening.
We need regulatory bodies going after things that are actually scams in the crypto world, of which there certainly are some. Also I think its okay if all these DeFi schemes where its just a new token and some investment/payout/locking scheme the creators came up with be labeled as Gambling, allowed, but like the tokens have to be labeled as gambling, because well none of DeFi is actually DeFi, a better name would be Open Finance because that stuff ain't decentralized, but most of it would be better labeled as GambleFi cuz its just a million different tokenized gambling finance schemes. Most aren't scams just very risky gambling schemes. The only problem with regulating it in this way is who gets to decide which are labeled gambling. This would just be for labeling purposes to help people who don't know what they are doing get shilled into some random token but then they go on an exchange and its listed as a gambling token and maybe they think twice about throwing their money at random crap. Just some sort of cautionary labelling would be useful for customer protection. Govt could even leave it up to the exchanges to handle this, that would be better, with just the rule being they have to do this sort of labeling on the exchange whenever they add a new crypto token.
Also I do think there should probably be some sort of regulations on lending crypto, because there's been tons of financial fallout in the crypto industry over lending. I think lending should be able to be offered but there needs to be some sort of basic protections against systemic collapse like we've seen this bear market among lenders. All these crypto companies were all lending to each other and all connected and so once Luna collapsed and then Celsius collapsed that led to lots more collapses. I don't know what lending regulations would look like but there should be something.
Also for pre-mine sales, regulated it sure. Just have the company that is doing a pre-mine go through a simple process to register what they are doing and make sure they are publicly stating what this thing is that they are selling, including possible downsides, just like a company might do in a financial report when talking about future expectations.
Oh also for staking service companies they should make all the tax information available and transparent to the customer, so the customer isn't left trying to figure out their staking income for taxes all by themselves which is a nightmare. That's common sense regulation right there.
Beyond this there probably shouldn't be anything. Anything beyond this would start getting to the point where govt is getting in the way of the industry and doing much more harm than good. Regulations should focus on insurance for customer protection, transparency for customer protection, perhaps labeling for customer protection, and not much beyond that. The sorts of things you hear the SEC talking about or that has been proposed in Europe sounds straight up tyrannical like these politicians who don't even know the first thing about the industry and the technology think they can just apply old finance rules to it when they don't have any clue that these rules don't even apply in any sensible way.
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