Regulation, regulation, regulation… It’s one of the main things we hear about as of late in the crypto space, and many traders and companies alike aren’t too happy about it.
Regulation Is Good… Isn’t It?
But is their anger warranted? Organizations like the Securities and Exchange Commission (SEC) are here to do a job, and that is to regulate financial trades so that they remain safe and secure for all parties involved in trades. Why put groups like this in a position of power if we’re not going to use them?
To an extent, one can argue that regulation is very necessary given how vulnerable cryptocurrencies and trading exchanges are to theft, hackings and other malicious activity. Recently, popular crypto trading platform Binance was hacked, and lost approximately $40 million in BTC funds overnight. How could such a thing happen? It seems that the company’s reserves were stored through hot wallet tactics that ultimately left some of the funds vulnerable.
Situations like these have been relatively common for nearly five years, and many have lost money as a result. It’s unfair to customers and traders who put their money (and trust) into these companies, thinking they’ll keep their funds on lockdown in the event a malicious actor decides to enter the picture.
But several companies are looking at regulation as a bad thing, and are trying to release themselves from the grips of organizations like the SEC. One of those companies is the cryptocurrency network known as “Kik,” which first came to fruition through a successful initial coin offering (ICO) in 2017. Now, the company has announced a crowdfunding effort to free itself (and companies like it) from the hands of the SEC.
The argument is that the coins sold through the ICO two years ago could, according to Kik, be used across a network of apps. The SEC, however, begs to differ, and insists they are securities. At press time, the SEC hasn’t announced any action against the company, and it’s unclear if it will take any in the future.
Kik’s CEO, Ted Livingston, expressed his frustration with the present circumstances, claiming that the SEC is simply gunning for every company that has run an ICO in the past and “guiding them into settlements.” He states:
This is happening behind the scenes for every project that did an ICO.
Is the SEC Just Targeting Crypto for Settlement Money?
Fred Wilson, a partner at Union Square Ventures which invests in Kik, comments:
It’s not like we haven’t put in literally hundreds of hours making these arguments, suggesting different regulatory frameworks. We have basically been met with a deaf ear. The industry needs an ‘I’m mad as hell and I’m not going to take it anymore’ moment.