Thread by @mrjasonchoi

0/ Thoughts on crypto regulation from Gary Gensler, former Chairman of CFTC and central figure in regulating swaps in ‘08.

#BEF2018

1/ On derivatives:

Derivatives for relatively illiquid cryptoassets are a bad idea.

2/ On accreditation:

It is “silly” but will likely stay as a way to tier investor protection.

3/ On decentralized exchanges:

As more AML/KYC and anti-front running laws get set in place, and as centralized exchanges increase rent, dex’s will start to catch volume.

Regulators will likely then target on-ramps.

4/ On tokenizing liquid assets:

If asset is liquid (e.g. stocks and bonds), tokenization will likely be unnecessary except for global tax arbitrage.

For Gold, silver - probably will happen due to capital markets interest.

5/ On tokenizing illiquid assets:

For illiquid assets, tokenization may bring unknown risks (e.g. as seen in the securitization of commercial loans and mortgage backed securities in 08)

(cc @APompliano, thought you’d be interested!)

6/ On banks and hedge funds:

If crypto stabilizes in public policy (projected timeline 2-3 years) and the asset class scales significantly, hedge funds and investment banks will come in en masse, but might be slower due to reputational and compliance risks.

7/ On securities law:

Most ICOs are probably security offerings but can become decentralized over time.