Regulators Striving to Meet Up With Changes in Digital Assets and Cryptocurrency

Ibiam Wayas by Ibiam Wayas - 01:30 AM Jan 21, 2020
Regulators Striving to Meet Up With Changes in Digital Assets and Cryptocurrency

Market regulators are likely to be faced with the challenge of meeting up with technological advances while seeking to shade investors from possible losses, said Robert Jackson, U.S. markets regulator. As per Reuters on Monday, Jackson, who's also a commissioner at the United States Securities and Exchange Commission (SEC), said the agency is looking to enact rules to help keep up with rapid growth and advancement of digital assets and cryptocurrencies.  Jackson noted that the SEC also faces challenges from a computer-driven investment advisor, particularly the "Robo advisors." it's algorithms that assist people in making investment decisions.

"I know what it looks like when a human being commits fraud. It's a lot harder to detect when an algorithm defrauds the investors. But investors deserve no less protection simply because money is being moved around by an algorithm." the regulator told an Israel Securities Authority conference.

While trying to emphasize on the matter, Jackson, disclosed that there were 4,000 lawyers at the U.S SEC; however, only a few programmers could be able to explain how algorithms work and possible risks they pose to investors.

"In 20 years we may need to be an agency of 2,000 lawyers and 2,000 programmers," Jackson added.

For cryptocurrencies, the regulator further noted that the agency struggles in regulating crypto-related assets, which he said are "exciting but come with risks." The aim is to ensure the asset class doesn't become associated with fraud, while also guaranteeing that investors are safe.

Also, the SEC is worried over the fact that technology innovators prefer private markets to raise large amounts of capital, over public ones. According to the regulator, this is because company founders derive the freedom to run their firms with less need for accountability and transparency.

Jackson says it poses a problem, given that, ordinary investors may be closed to many new technology companies.

"We might create a system of public companies that are not exciting. Instead, that growth is reserved for a small section of society that can invest in private markets. That can be very unhealthy," Jackson said.

He further proposed to improve disclosure from private companies by investing through intermediaries. However, this means that Investors will have to pay more but have a lower risk.

About The Author
Ibiam Wayas

Ibiam WayasIbiam Wayas is an optimistic crypto news reporter who also enjoys tech writing. He is an introvert who spends much of his time on the internet studying facts that will help him excel in the digital/cryptocurrency space.


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