“A stupid idea,” Gallagher, the general counsel, said about the Coinbase offer
The idea of the American cryptocurrency exchange Coinbase is to form a separate structure in order to regulate the cryptocurrency. To this, Dan Gallagher, who is the general counsel of the Robinhood trading platform, said bluntly that this was a “stupid idea.”
Back in October 2021, the document “Digital Asset Policy Proposal” was published, where the Coinbase exchange describes possible ways to regulate the cryptocurrency sphere. The company’s representatives believe that the methods used by the Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC) are outdated. Such approaches, in their opinion, can be used in monitoring ordinary financial transactions, but not cryptocurrencies. And in order to control this industry not “fragmentally”, but holistically, it requires the formation of an independent body that will work only with digital currency.
Dan Gallagher, Robinhood’s chief lawyer, disagreed on this. During a conference on financial markets organized by Georgetown University, the lawyer called such a proposal “one of the stupidest ideas he has heard in recent times.” Before taking up this position, Gallagher was an SEC commissioner under the administration of former US President Barack Obama.
In his statement, Gallagher recalled the Dodd Frank Law, which came into force after the 2008/2009 crisis, in order to reduce the risks of the financial system. Dodd Frank’s goal was to reduce the number of federal structures to make governance clearer. As a result, there were several of these structures, and there was only confusion in understanding who was responsible for what. Therefore, according to the lawyer, there is no need to create another regulator.
In addition, Gallagher added that the SEC and CFTC will not be able to transfer all competencies to the new regulator, and therefore such actions are a failure in advance. Only the next cook will appear in the kitchen.
In response to the objection, a representative of Coinbase assured that it was envisaged to create not another regulator, but an agency. It will work absolutely independently of the SEC and the CFTC, putting forward its own methods of supervision of the cryptocurrency sphere. Moreover, outdated control methods will not be applied. Coinbase representatives are ready to discuss other specific proposals to improve the regulatory rules that apply today and affect digital finance.
Not so long ago, Ripple put forward a way to regulate the sphere of cryptocurrencies and blockchain. Its representatives expressed their opinion on the importance of cooperation between regulators and cryptocurrency market participants, as well as the development of regulatory “sandboxes”.
