The FinCEN’s recently-proposed rules that would mandate stricter KYC processes for fund transfers from a centralized exchange to a personal wallet are an effort at doing the same. Understandably, these proposals drew a vehement response from many in the community, especially since they came on the back of the regulatory efforts to regulate the stablecoin market.
However, while most believe these proposals are last-ditch efforts taken by an outgoing administration, there might be more than what meets the eye. This was the view held by Galaxy Digital’s Mike Novogratz during a recent interview. According to the exec,
“….they (proposed regulations) are not actually designed to go after Bitcoin and Ethereum per se. They are designed for the companies that traffic in them. And those are mostly companies in retail.”
This is an interesting perspective, especially since many have been quick to jump on the “U.S Government is going after cryptocurrencies” bandwagon.
There is a good argument to be made here for the other side, however, especially since the outgoing administration led by Mnuchin and Trump has for long been anti-Bitcoin. The aforementioned rules proposed by the FinCEN are a perfect example of the same since, as Novogratz was quick to point out, the proposals haven’t exactly had a 60-day comment period that is usually the norm. Further, with Trump and Mnuchin on their way out, a new administration led by a new President and a new Treasury Secretary might feel differently.
Hoping for “open-minded” regulators to come in when the new administration takes over, Novogratz went on to argue that such rules only stand to stifle innovation, with the same also having the potential to push businesses offshore while giving a distinct advantage to countries like China.
The Galaxy Digital exec also commented on the nature of Bitcoin’s bull market, lauding its performance in the face of hurdles posed by American regulators. According to him, MassMutual investing $100M in Bitcoin was “giant news,” and evidence of the fact that the adoption of Bitcoin by institutional clients is not slowing down.
Novogratz concluded by commenting,
“Bitcoin, right now, is three percent of gold. I think it can easily be ten percent of gold so, that’s $60-$65,000. I don’t think that’s hard. I just see more participants coming into the market.”
It should be noted, however, that since Novogratz’s interview, the world’s largest cryptocurrency has breached more resistance levels on the charts. Ergo, the aforementioned percentage must have climbed even higher.