American billionaire hedge fund manager Bill Ackman believes that the way to clean up the crypto space is not necessarily more regulations, but better enforcement of existing regulations. But even then, the job is likely to take regulators years, he said.
The veteran investor’s thoughts on crypto regulation were shared over the weekend in a lengthy Twitter thread, where Ackman also clarified that regulators may never really be able to fully capture what’s going on in crypto. .
“Regulators need more resources to control bad actors. Unfortunately, it can take years for regulators to catch up, and they may never get there,” said Ackman, who founded hedge fund Pershing Square. And is still prominent, wrote in one of his tweets.
He added that because of this, self-regulation and self-governance within the crypto industry will be necessary in order to avoid a total regulatory crackdown.
“Not sure we need more regulations”
According to Ackman, most frauds that are currently taking place in the crypto industry – such as pump and dump – are actually covered by current regulations. Thus, what is needed is not more regulation, but more enforcement.
“With regard to regulation, I’m not sure we need new regulations. Most of the fraud that is happening is old fashioned pump and dump schemes, and failure of custodians to protect clients’ assets,” Ackman said. said, whereas:
“I suspect that existing anti-fraud and other laws already govern these breaches.”
Crypto is still the “Wild West”
Describing the current state of the crypto industry, Ackman said that crypto “remains the Wild West,” due to the lack of investor protections. As a result, “the character, reputation and track record of the management teams and crypto-based businesses that sponsor them are extremely important in choosing which projects to back,” he said.
Despite this, the well-known investor also clarified that projects based on blockchain technology and tokens have certain advantages over stock options issued by a company.
As an example, he noted that stock options can be “a powerful tool for business creation and growth” because they incentivize actors within the company, typically directors and employees. While they can’t be distributed to “a global army of unconnected actors to incentivize behavior,” Ackman said this is where tokens really shine.
,[This] allows the formation of new crypto-based businesses that previously could not be executed using pre-blockchain business tools,” Ackman said, before finally declaring:
“This is the power of crypto and why I believe in its potential for transformative impact.”
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