Robinhood’s chief lawyer, Dan Gallagher, called the idea of a new digital asset regulator “just plain stupid” in a conference call on Wednesday.
Robinhood is a popular commission-free trading app offering digital assets, and rival crypto exchange Coinbase prompted the idea of a new regulator in October.
Gallagher told attendees at the Georgetown University Financial Markets Quality conference that it “doesn’t make sense” to add more agencies to the “Washington alphabet soup”.
He went on to say that attempts to transfer powers from agencies such as the Securities and Exchange Commission (SEC) and the CFTC to another regulator were “one of the dumbest ideas I’ve heard in this field in a long, long time. Time.”
Gallagher previously served as a commissioner for the Securities and Exchange Commission under the Obama administration. He spoke as part of the Future of Digital Assets panel at the conference.
While Coinbase was not specifically mentioned, the criticism was implied. On October 14, Coinbase proposed a new federal regulator. Coinbase Policy Director Faryar Shirzad Worte:
“To avoid fragmented and inconsistent regulatory oversight of these unique and contemporary innovations, the responsibility for the digital asset markets must be placed with a single federal regulator.”
Gallagher said Robinhood is taking a more conservative approach than Coinbase to avoid regulatory issues. While Coinbase supports 51 different cryptocurrencies, Robinhood only supports seven.
“We have to be very careful and thoughtful,” he said. “You can’t get new coins only if a regulator calls them safe the next day.”
The digital asset area is currently controlled by a number of government agencies, including the SEC and CFTC. The Securities and Exchange Commission regulates securities like common and common stock. Whether many cryptocurrencies count as securities or commodities is still a hot topic of debate.
Describing the current regulatory climate for digital asset exchanges, Gallagher said, “This is a very tense situation that requires regulatory clarity that we haven’t seen yet.”
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“You cannot rush into what makes the most sense. You should take with you what current regulators might think about this new technology.”
Rather than creating an additional regulator, Gallagher suggested that the solution would be for the Securities and Exchange Commission (SEC), CFTC and FINRA to “create a system with existing mandates that is light enough and recognizes the benefits of the technology.”
Attention should be paid to legal entities in the regulatory framework that allows companies, organizations, companies and individuals to exist in the market, where sometimes there are securities and sometimes not. Sometimes there is a product and sometimes not. right ? And don’t worry that after the fact will come some year later. ”
On October 27, acting CFTC Chairman Rustin Behnam suggested during a hearing that the agency is tasked with controlling 60% of the digital asset market as the “chief police officer of affairs.”