Timothy Massad, the previous chairman of the Commodity Futures Buying and selling Fee, instructed CNBC’s Jim Cramer on Tuesday that the cryptocurrency’s future will rely on the result of the federal government’s current lawsuits in opposition to forex alternate platforms Binance and Coinbase.
Based on Massad, the federal government and SEC should create a brand new business framework that protects traders, prevents fraud and manipulation, and at last solutions the controversial query: Are digitized tokens securities?
“Loads of what’s taking place within the crypto world is all about itself, you realize, it’s a really attention-grabbing know-how – the sensible use circumstances that connect with the true financial system are, frankly, nonetheless few and much between,” he mentioned Massad. “The query is how can we create a framework the place this innovation can nonetheless occur and perhaps result in issues of actual worth, however on the similar time defend traders.”
One of many greatest issues in crypto pertains to wash buying and selling, the place somebody trades themselves or associates to mislead others about inventory efficiency. Massad mentioned that this sort of rip-off accounts for 50% to 90% of buying and selling on crypto platforms.
“There isn’t a assure that there are procedures that may stop this,” he instructed Cramer. “And most of those buying and selling platforms have their very own trades, which they shouldn’t have.”
The SEC filed 13 costs in opposition to Binance on Monday for varied forms of fraud and misdemeanor. On Tuesday morning, Coinbase was hit with a sequence of comparable, albeit milder, costs, inflicting the inventory to plummet 12%.
“The enterprise mannequin of those exchanges contradicts the functioning of our securities markets,” emphasised Massad.
Massad added that he and Federal Reserve Chair Jay Powell assist measures that may defend traders, a minimum of within the brief time period, whereas the federal government works to create an entire new framework.
“One of many issues with the mannequin is whether or not you’ll be able to commerce bitcoin and ether, that are, let’s say, commodities, on the identical platforms as different issues,” he mentioned. “Within the SEC’s view, I don’t assume that will be permissible. However is that this the mannequin we would like? So once more there are some questions on the place we actually need to go, however we have to have a lot better investor safety.”