Former DOJ Official: Regulation Good for Crypto

A former official from the U.S. Department of Justice (DOJ) said regulation of cryptocurrency would be a good thing.

An opinion piece in The Wall Street Journal (WSJ) Thursday (Jan. 20) by Makan Delrahim, who was appointed by former President Donald Trump and served as assistant attorney general for the agency’s antitrust division from 2017-21, said blockchain applications could transform the economy. But there’s a caveat.

“Crypto is different in one key respect: It has the ability to create and maintain decentralized marketplaces,” he wrote. “Blockchain can topple incumbents because it is an open technology of decentralized trust. It makes it possible to cut out the middleman.”

He wrote that the White House is poised to issue an executive order directing federal agencies to recommend possible crypto regulations. The Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) have called for increased federal guidance of stablecoins.

In addition, while Congress debates the issue, a federal judge will rule on whether sales of tokens by international payments processor Ripple should be considered securities transactions that require registration with the Securities and Exchange Commission (SEC).

Delrahim called on the President Joe Biden administration to include government competition lawyers and economists in any conversations about crypto guidelines.

“There’s a lot of potential here,” he wrote.

Delrahim’s comments come one day after SEC Chairman Gary Gensler made a push to bring cryptocurrency exchanges within his agency’s remit.

Read more: Gensler Says SEC Is Coming for Crypto Exchanges

Following a Wednesday (Jan. 19) speech on “Dynamic Regulation for a Dynamic Society,” Gensler argued that it is vital for crypto investors to get the kind of protections long afforded stock traders.

“I’ve asked staff to look at every way to get these platforms inside the investor protection remit,” Gensler said. “If the trading platforms don’t come into the regulated space, it’d be another year of the public being vulnerable.”