More crypto regulation is coming, and many crypto protocols have worked hard already to be regulatory-compliant. But regulation won’t be uniform across jurisdictions; there will always be loopholes that allow regulatory arbitrage.
Some exchanges, such as Coinbase and Kraken, are based and regulated within the US, and are subject to much stricter oversight than FTX—which seems to have been deliberated based in Hong Kong and then the Bahamas precisely in order to avoid US regulatory oversight. (Arguably, this should have been a red flag in terms of EA’s relationship with FTX).
The US, UK, or EU can regulate all they want, but crypto finance is a global business, and there are plenty of less-regulated havens willing to host crypto businesses.
Hopefully crypto investors, traders, and users will become savvier about checking where businesses are operating, and what regulatory scrutiny they’re subject to.
Agreed on that. My point was that it would be a lot harder for an individual to get super-rich quick in a regulated market. No sane regulator is going to allow a regulated party to risk customer assets for the party’s benefit, and few will allow crazy leverage. And the whole thing will require significantly more of a buffer in fiat currency, again limiting any single person’s ability to get megarich.
In short, I think there are few ways for a well-regulated exchange to be stratospherically profitable. So people should not expect the rise of new crypto megadonors who hail from regulated backgrounds.
More crypto regulation is coming, and many crypto protocols have worked hard already to be regulatory-compliant. But regulation won’t be uniform across jurisdictions; there will always be loopholes that allow regulatory arbitrage.
Some exchanges, such as Coinbase and Kraken, are based and regulated within the US, and are subject to much stricter oversight than FTX—which seems to have been deliberated based in Hong Kong and then the Bahamas precisely in order to avoid US regulatory oversight. (Arguably, this should have been a red flag in terms of EA’s relationship with FTX).
The US, UK, or EU can regulate all they want, but crypto finance is a global business, and there are plenty of less-regulated havens willing to host crypto businesses.
Hopefully crypto investors, traders, and users will become savvier about checking where businesses are operating, and what regulatory scrutiny they’re subject to.
Agreed on that. My point was that it would be a lot harder for an individual to get super-rich quick in a regulated market. No sane regulator is going to allow a regulated party to risk customer assets for the party’s benefit, and few will allow crazy leverage. And the whole thing will require significantly more of a buffer in fiat currency, again limiting any single person’s ability to get megarich.
In short, I think there are few ways for a well-regulated exchange to be stratospherically profitable. So people should not expect the rise of new crypto megadonors who hail from regulated backgrounds.