On 25th September, Erik Voorhees, the Chief Executive Officer of the cryptocurrency platform ShapeShift posted his opinion on the cryptocurrency regulatory policies in the state of New York. Voorhees believes that the licensing pressure put on the cryptocurrency exchanges by the state will end up suffocating the innovation in cryptocurrency space. On his official Twitter handle, the CEO wrote:
“The licensing/regulatory regime in NY State is such that it will smother most crypto innovation, and those crypto companies which operate there will end up regulated into the very shape of the banking system as it stands today. Meanwhile, 7 billion people deserve better.”
Voorhees is a prominent figure in the world of cryptocurrency exchanges and leads ShapeShift, a platform directly affected by the regulations imposed by the authorities. Recently, the company had to add the KYC [know-your-customer] feature to its platform that snatched away its unique selling point in the industry.
Earlier, ShapeShift used to be a platform where users could trade without having accounts on the exchange. However, under the massive pressure of regulatory compliance and stringency, ShapeShift announced its first membership program earlier this month. In a statement regarding the membership program where the users must submit their personal details to the platform, Voorhees said:
“To the extent that digital asset technology remains a legal grey area, we need to be prudent and thoughtful in our approach as we navigate the regulatory environment.”
In his Twitter thread, a follower asked Voorhees about the kind of regulation the government should impose on the cryptocurrency exchanges that do not involve fiat currency in their operations. Here, he replied by saying that the only reasonable regulatory framework is ‘don’t commit fraud or theft. End’.
Next, the same user also raised the question of whether Voorhees considers wash trading as a major fraud-related issue. To this, he replied by implying that the aspect of wash trading depends on a particular platform and their policies. According to Voorhees:
“That should be up to the specific exchange, in its terms and conditions. If a particular exchange allows it, then people should use different exchanges if they don’t like it. Zero reason for government to make such decisions for allegedly ‘free’ adults.”
Wash trading is an activity either carried out by an internal party or external investor to manipulate the market on an exchange. Here, the party buys and sells the same financial assets on repeat to fake false market activity on that particular platform.
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