Galaxy’s Novogratz: Our Industry Did a Terrible Job Educating Washington
Galaxy Digital CEO Mike Novogratz talked about what comes next for the digital asset space and how to navigate the tumultuous regulatory landscape onstage at Mainnet 2021.
Galaxy Digital CEO Mike Novogratz; Source: Brandon Shamy, ONE37pm
key takeaways
- The conversation came just a day after United States Securities and Exchange Commission Gary Gensler made headlines for his less than favorable view of the industry
- Cryptocurrencies are difficult from a regulatory standpoint because they do not neatly fit into the current framework in the US
Mainnet 2021, New York City — Predictions about the regulatory future of the digital asset industry dominated the discussion on the final day of Messari’s Mainnet conference on Wednesday.
Galaxy Digital CEO Mike Novogratz was joined by BitGo CEO Mike Belshe to discuss what comes next for the digital asset space and how to navigate the tumultuous regulatory landscape.
“I think it’s gonna be a really volatile six to 12 months in the regulatory sphere. Our community did a terrible job of educating Washington on what our industry was and what’s important.”
The conversation came just a day after United States Securities and Exchange Commission Gary Gensler made headlines for his less than favorable view of the industry.
“Gary [Gensler] is smart, there’s absolutely no doubt about it. There’s absolutely also no doubt about it that he wants to regulate crypto,” said Novogratz. “He wants to be the sheriff of crypto.”
Cryptocurrencies are difficult from a regulatory standpoint because they do not neatly fit into the current framework in the US.
“You’ve got an issue as crypto is a new industry that doesn’t necessarily fall directly in the purview of the SEC or the CFTC, you can’t decide what’s the security, and if it’s not a security, can the SEC even regulate it?” said Novogratz. “What [Gensler] will try really hard for is to get this Democratic congress and Democratic Senate to pass legislation that gives him the right to regulate crypto.”
Belshe agreed, also pointing out that countries across the world are grappling with the same regulatory uncertainties. Blockchain technology that allows for cryptocurrencies to exist can also be applied to a variety of issues, he said.
“The rules that we have in place today, a lot of them were built a long time ago, they were built for a system that doesn’t have a blockchain,” said Belshe. “As we move forward as to how we’re going to do this next, we have a whole bunch of new tools that we haven’t had in the past, and I think the problems are getting figured out. So again, innovation I think is going to be the answer here.”
That being said, there is plenty of room for error, Novogratz warned. He echoed sentiments from previous Manniet speakers, including Robinhood Crypto COO Christine Brown, who said that user needs will continue to be top of mind, regardless of regulatory guidelines.
“It certainly is a risk to our markets that we get really bad regulation,” said Novogratz. “It doesn’t kill the enterprise, but it certainly does slow down the adoption of crypto. And so it’s wildly important that we take this stone-cold seriously.”
Given the speed of adoption, Novogratz and Belshe said, it is important that a regulatory framework be established quickly.
“We’re literally growing one and a half to two times faster than the internet in terms of adoption,” Novogratz said. “You’d be an idiot, as a politician, an idiot, to say, ‘oh I don’t want that around.’”
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