Founder and co-founder of Ethereum, Charles Hoskinson, has proposed a new approach to the regulation of cryptocurrencies and associated activities to the US House of Representatives. Software-based assumptions form the foundation of this strategy.
During a congressional hearing on Thursday, Hoskinson argued that the software developers of the many crypto projects involved should be responsible for ensuring compliance.
He stated that the self-regulation pattern in the banking industry could be emulated in the regulation and compliance of cryptocurrencies. He believes that, like banks, exchanges should be permitted to develop and manage KYC-AML procedures.
Banks are the ones implementing KYC-AML, not the SEC or CFTC. Hoskinson pointed out that they are the ones on the front lines. The relationship between the public and private sectors is also worth emphasizing. It is up to us, as inventors, to create the software that will aid in the establishment of these limits.
As the US Congress is now searching for the best way to regulate the crypto business, this proposal comes at a great moment for the crypto industry as a whole.
Charles Hoskinson claims that since crypto technology is able to store and transfer user data, regulatory tasks may be automated by developers in the domain, like the banking industry.
When it comes to crypto rules and compliance methods and reducing the rivalry that comes from numerous regulatory bodies, a 34-year-old American entrepreneur believes that this trend would be beneficial.
It seems that Hoskinson was alluding to the CFTC vs. SEC war of crypto regulatory dominance (SEC).
Ex-CFTC Commissioner Brian Quintenz tweeted in August of last year that the SEC has no jurisdiction over commodities like gold, wheat, or cryptocurrency. Former Commissioner of the Commodity Futures Trading Commission Christopher Giancarlo said that only the CFTC has expertise in regulating crypto.
In light of the SEC’s string of litigation against crypto projects and the complaints of certain crypto enterprises about irrational limits imposed by the US regulator, Hoskinson’s proposal looks to be the right way forward for crypto legislation.