The prospect of realizing returns from currency appreciation and making investments independently of intermediaries has driven an increasing number of investors to purchase cryptocurrencies. While demand for cryptocurrency is soaring, regulation of the industry is lagging. In a response letter to Senator Elizabeth Warren, SEC chairman Gary Gensler wrote that mass illicit activity committed by cryptocurrency platforms is raising “a number of issues related to protecting investors and consumers, guarding against illicit activity, and ensuring financial stability.” These dangers stem from centralized and decentralized cryptocurrency exchanges being exempt from many of the regulations that financial institutions and securities exchanges are mandated to follow. For instance, many cryptocurrency exchanges are vulnerable to costly hacks and breaches because the exchanges are not mandated to obtain the cyber security systems that financial institutions are mandated to hold (Brookings Institute). In addition, the absence of oversight in DeFi platforms has led to widespread cryptocurrency fraud that is costing cryptocurrency consumers and investors tens of millions of dollars monthly (Elizabeth Warren letter to chairman Gensler).
To make matters worse, insufficient cryptocurrency regulation threatens more than just those directly involved in the cryptocurrency market. For one, cryptocurrencies are enabling criminal activity by making criminal transactions less detectable. Cryptocurrencies have become mediums of exchange in many illicit markets because suppliers and consumers can receive and transfer cryptocurrencies without revealing their names and identity (AEI 2018). Beyond the criminal sphere, the mining of crypto assets is causing great harm to the environment. In fact, Bitcoin, alone, emits 36.95 megatons of CO2 each year and is forecasted in 30 years to increase global temperatures by 35.6 degrees Fahrenheit (Sierra Club 2021). Without new regulation, cryptocurrency mining will push our planet further down a collision path towards a point of no return.
This timely symposium offers an opportunity for those working in the finance industry, government, cybersecurity sector, and law enforcement to discuss strategies to improve investor security and correct negative externalities associated with cryptocurrency markets. Participants will discuss best practices for enhancing collaboration between stakeholders and consider ways to overcome challenges. Delegates will review recent policy developments and identify priorities for the future.
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