Ripple’s Chief Legal Officer, Stuart Alderoty, said that the cryptocurrency industry does not need Dodd-Frank-like regulation.
As lawmakers in Washington work on new rules for digital assets, Alderoty argued that regulations should be “proactive rather than reacting to a crisis.”
Speaking at a conference organized by the Psaros Center for Financial Markets and Policy at Georgetown University, Alderoty said, “Dodd-Frank was enacted in response to a crisis. Cryptocurrency regulation must be proactive.”
The Dodd-Frank Act, passed in 2010, tightened oversight of the financial sector in response to the 2008 global financial crisis, establishing institutions such as the Consumer Financial Protection Bureau and the Financial Stability Oversight Council.
Both the US House of Representatives and the Senate are working on comprehensive legislation to regulate the crypto industry. The House passed a bill last summer that defined the responsibilities of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), imposed obligations on digital asset companies to separate client assets from company funds, and imposed transparency requirements on individual investors. The Senate Banking Committee’s version, however, aims to clarify which digital assets are not considered securities by introducing the concept of “ancillary assets.”
“Market structure is a complex issue. I’m all for smart market structure legislation, but we don’t need a Dodd-Frank for cryptocurrencies at this stage,” Alderoty said, calling for a balanced approach to regulating the sector.
*This is not investment advice.