Novogratz hopes for better crypto regulation as Joe Biden takes office

The US crypto industry is hoping for significantly improved regulation of cryptocurrencies after the upcoming change of government. At least Mike Novogratz, the CEO of Galaxy Digital, is in favour of this.

Novogratz made the relevant remarks on the CNBC programme Squawk Box on Christmas Eve, first pointing out that Bitcoin (BTC) is by Crypto Engine still very resistant to the current criticism from Washington:

„This shows us how strong the current upward trend really is […]. They keep trying to put obstacles in the way, but Bitcoin just keeps marching on.“

However, for the crypto industry to succeed in the long term, legal clarity is needed. In light of the change of administration from Trump to Biden, Novogratz therefore opines:

„I hope that in 20 days we see a changing of the guard that brings us open-minded regulators.“

Donald Trump’s departure from the White House became another challenge for the crypto industry in the last few metres. Last week, for example, the Financial Crimes Enforcement and Enforcement Enforcement Agency (FinCEN), which is part of the Treasury Department, presented a bill that makes it more difficult to interact with „self-managed“ crypto wallets.

Although the draft is not quite as drastic as previously expected, it could have considerable implications for some crypto companies

That the authority wants to push the planned law through as quickly as possible can be seen from the fact that it has only given 15 days for feedback. As a rule, 60 days are customary.

At the same time, the US Securities and Exchange Commission (SEC) has landed a heavy blow against the crypto industry by suing the crypto payment service provider Ripple. The company’s proprietary cryptocurrency is said to constitute a security, which would make its sale an unauthorised sale of securities.

The indictment against Ripple is not a quick fix, however, but is based on many years of investigation and well-thought-out arguments (see below). If the court follows the agency’s reasoning, trading of XRP could be banned altogether.

The 70-page SEC complaint against #Ripple is a teardown of breathtaking detail and scope. It’s not a petty or vindictive gesture: it’s a well-researched and well-articulated document that alleges a scheme of epic proportions.

You should read it. https://t.co/CCoykYk317 pic.twitter.com/oArxi3y3bo
– Jon Rice (@JonRiceCrypto) December 22, 2020

Novogratz and some of his colleagues believe that existing laws make it difficult for cryptocurrencies to adopt and innovate in the US, making it all the easier for competitors from China in particular to dominate the market. Ironically, this is also one of the arguments Ripple is using to rebut the SEC’s complaint.

In the CNBC interview, Novogratz says that restrictive crypto laws inevitably „have a lot of unintended side effects“, causing many innovative projects in the industry to move abroad.