Bitcoin Global News (BGN)
April 20, 2018 -- ADVFN Crypto NewsWire -- Yesterday, it was
reported through several outlets that the CEO of Kraken, one of the world’s
biggest crypto exchanges by trading volume, has refused to agree to
an order from the New York Attorney General to make most of its
internal information, public. On the other hand, Tyler Winklevoss,
who acts as the CEO of the Gemini exchange, has effectively thrown
his support behind the inquiry.
What exactly does this mean and
what is being asked of these companies? Essentially, it seems that
the attorney general would like to treat all major cryptocurrency
exchanges the same as public stock exchanges, at least with regards
to company documents related to risk management, trading policies,
leadership and other areas being made public.
If all of this is made public by
every one of these exchanges, it could be quite bad for the space,
to say the least. The essence of the crypto-industry is
transparency, but not with regards to making all customer and
company information public. If every crypto exchange will be
treated like a public company, then decentralization will be
non-existent.
As a consequence of
this, DAOs
would become non-existent and every crypto company would have the
typical structure of a public company, complete with a board of
directors and traditional managers as well as therefore, decisions
usually being made in the waterfall model. It should be made clear
that this is not necessarily true in the case of this inquiry but
it is a fairly logical implication which can be drawn from
it.
On the other side of things, the
New York attorney general has reportedly said that the main purpose
of asking these questions is to later implement policies to better
protect customers in the industry. The problem with this idea could
be that the very nature of a crypto firm is such that the
responsibility of protecting the customer usually falls to the
customer network, at large.
Ostensibly, related to all of this,
Kraken would have been pressured further to accept the inquiry if
they were still primarily housed in New York. In what could be
considered a stroke of luck, however, they moved their physical
headquarters out of New York in 2015, due to BitLicense. If you don’t already
know, BitLicense is essentially a law that makes it required for
crypto-businesses to have special business licenses to
operate in New York. In response to it, most of the top
crypto-firms left New York completely, though Gemini, the
brainchild of the Winklevoss twins, has stayed there and prospered
under regulation.
In total, 13 exchanges were asked
to provide the same information. All in all, it remains to be seen
how all of the other CEOs will respond and how their responses will
snowball into action from internal and external actors. Whatever
the decision is that is made in the end, it might be best to form a
DAO to solve this issue, as has been suggested by the Winklevoss
twins. More specifically, such a DAO would involve
internal and external actors and would be run by an elected board
of directors. Such a solution might be difficult due
to Gemini and the twins
sometimes being seen as largely supporting regulation over
innovation. Ideally, in the end, despite all of this, a compromise
of some kind will be made and the crypto community will still
foster innovation, within reason.
By: BGN Editorial Staff