Can the Law Fix Crypto’s Problems?

CAN THE LAW FIX CRYPTO’S
PROBLEMS?
By: www.ProfitableInvestingTips.com

https://profitableinvestingtips.com/profitab
le-investing-tips/can-the-law-fix-crypto's-
We have been watching the Sam Bankman-Fried
trial.We also saw on the news that Singapore
put the founder ofThreeArrows capital in jail.
Meanwhile, the Securities and Exchange
Commission and the Commodity Futures
Trading Commission are going after the likes of
Binance and Coinbase.

Crypto has its problems. Many of them were
highlighted during crypto winter. Part of what
we are seeing today is the dealing with specific
crypto-related crimes. Part is sorting out who
makes the rules that crypto needs to follow.We
wonder this. Can the law fix crypto’s problems?

CanThings WrongWith Crypto Be Fixed?

The huge monetary losses during crypto winter
showed us things that crypto needs to fix. It showed
us that regulation is needed to monitor things,
discourage criminal activity, and protect both
investors and consumers. Human nature being what
it is, we think there is a risk that some of the same
problems will reemerge no matter how well crypto
is regulated and for how many years they send
Bankman-Fried to prison. Putting one person away
does not necessarily deter the next person.

Is Punishment of White Collar Crime a
Deterrent?

On April 14, 2021 Bernard Madoff died.The one
time Nasdaq stock exchange chairman was in
prison. He ran the biggest Ponzi scheme in
American history ($64.8 billion). He was serving
a 150-year sentence.There are two reasons we
send people to prison. It keeps them out of
society and makes it impossible to commit more
crimes. And it acts as a deterrent to others who
may be thinking of doing equally bad things.

Madoff certainly did not commit any more crimes.
However, just a year after Madoff’s death Sam
Bankman-Fried was charged with another Ponzi
scheme involving billions of dollars’ worth of
mostly crypto assets.The example of Madoff did
not deter Bankman-Fried.

AVery Short History of Business Regulation

The crypto world is very young when compared to the
world of traditional finance. Problems in business
have been emerging ever since folks have been
doing business. The Romans said that the buyer
needs to beware (caveat emptor). As the American
economy expanded in the 19th and early 20th
century, a handful of people in business amassed
great wealth and power.Their means of achieving
such status and how they maintained it were often
immoral but not necessarily illegal.

The government needed to step in to break up the
Standard OilTrust, AmericanTobacco Company,
and Andrew Carnegie’s steel company.These
monopolies thrived because of their ability to
control prices.They are now gone. Banks
collapsed in the 1930s after they invested in the
stock market and did not safeguard money of
their depositors.Today we have the FDIC that
insures deposits and oversees banks.

Will Regulation Provide Safety in Crypto?

Crypto was supposed to be a good way to send
and receive money via the internet. It was
supposed to get rid of the middlemen who
siphoned off assets and manipulated the
financial system.Who could have foreseen that
this vehicle would create immense wealth?
Someone should have seen that with such
wealth would come temptation to manipulate
the system and create monopolies.

Any student of history can see that humans tend to be
greedy.This leads all to often to folks attempting to
manipulate whatever financial system there is for
their own gain. Roosevelt took down the trusts over
a century ago but today we have Google, Apple,
Microsoft, Amazon, and Meta whose control over
the internet, our communications, our privacy, and
our assets rivals the control that Standard Oil,
Carnegie and AmericanTobacco had more than a
century ago.

In the crypto world we saw FTX rise to great
heights and then collapse.The argument that
regulators and law enforcement have with FTX
is not that the business failed. It is that client
assets were used as personal funds and
customers were lied to as to the company’s
degree of financial distress.

If the next FTX is better regulated, regulators will
have an eye on its assets and be able to warn
investors and customers in time for them to take
their own necessary actions. But it doesn’t mean
that folks won’t try to game the system again
and again.

For more insights and useful information about
investments and investing, visit
www.ProfitableInvestingTips.com.

Can the Law Fix Crypto’s Problems?

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