Brian Armstrong and Ryan Selkis on rebuilding crypto after SBF
Crypto was not on good terms with regulators prior to the FTX meltdown, and two influential industry founders discussed Wednesday how it could now be years before meaningful progress is made in Washington, DC
Ryan Selkis, founder and CEO of crypto research firm Messari, joined Coinbase CEO Brian Armstrong in a Twitter conversation that focused, among other things, on mitigating damage to the entire sector.
“We’ve gone from a series of really constructive conversations to sort of measuring and managing the aftermath of the last week,” Selkis said.
Former FTX CEO Sam Bankman-Fried was a key crypto advocate on Capitol Hill, testifying before Congress last year on “Digital Assets and the Future of Finance.” Bankman-Fried and one of his top executives, Ryan Salame, were also two of the most prominent politician donors in the last election cycle.
Crypto regulation has been patchy at best. Securities and Exchange Commission Chairman Gary Gensler has favored big-name bankruptcy over sweeping rule changes, and he may yet pay the price. Sen. Cynthia Lummis (R-Wyo.) and Sen. Kirsten Gillibrand (DN.Y.) have co-sponsored a bill aimed at clarifying cryptocurrency regulations, but Gillibrand now counts himself among politicians speaking amid FTX – Cases return donations from SBF.
Bankman-Fried “made a lot of people in Washington DC look goofy,” Selkis said. “And that’s one thing that doesn’t go down well.”
Still, Coinbase CEO Brian Armstrong said regulators, particularly the SEC, are partly to blame for the contagion following FTX’s bankruptcy.
“I think the lack of regulatory clarity in the major markets has actually moved a lot of these things to those jurisdictions, which hasn’t helped,” he said.
Armstrong added he hopes regulators will take this as a wake-up call and work together to solve what he sees as the biggest problem, loosely regulated centralized exchanges and custodians.
“This is where a lot of these issues have come up,” Armstrong added. “And if we don’t get it regulated here in the US — and other big markets, the UK, etc. — this stuff will go abroad, and customers will be harmed.”
Both Armstrong and Selkis agreed that the implosion of SBF and FTX does not mean crypto is going away, with the former adding that it is now up to established players in the industry – like them – to prove that companies are both successful and can also be serious.
And any new legislation, Selkis added, will hopefully not be an overreaction to SBF’s escapades stifling crypto innovation.
“Often these crises pass,” he said. “Law is permanent.”
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