BitGo head believes that the SEC decision is positive for the crypto-market
First of all, Belsche draws an analogy with the traditional financial sphere. It has different directions and different systems of counterbalances and costs. Why, then, should the crypto market be any different?
Speaking again about traditional finance, the expert recalled that before the Great Depression, everyone was actively buying securities, trying to buy more and sell more. It worked as long as prices rose. After prices plummeted, investors not only lost their portfolios, but also found themselves in debt.
After that, the SEC came in and clear rules were put in place to eliminate similar precedents in the future. In this regard, the regulator's assertion that the industry should utilize the services of qualified custodians has good reason. Everyone involved in custody must follow the rules, be audited, and be guided by regulations.
Speaking as a representative of one of the players in this field, Michael Belsche suggests introducing additional rules that could protect investors.
First and foremost, he is talking about having 1:1 reserves for stablcoin issuers, which would be located at banks with FDIC insurance. An audit of the reserves would have to be quarterly and accountable.
The exchanges are also proposed to be available for auditing. This would give a basis to have full transparency. Belshe recalled that FTX combined fiat and cryptocurrency assets, allowing reserves to be exceeded. Had the above rules been followed, this would not have happened. Another possibility that opens in this case is the debt registry, which works on the blockchain.
