According to Tim Draper, billionaire venture capitalist, and exponent of cryptocurrencies, the SEC Chair Gary Gensler is stifling the crypto sector leading to a potential long-term detrimental effect on technology in the US.
Gensler said the following at a recent Fintech conference, leaving no doubt on his views on crypto:
“hucksters, fraudsters, scam artists, Ponzi schemes. The public left in line at the bankruptcy court”.
Tim Draper remarked in reply to the above in a Fox Business interview:
“Weak regulators spread fear, and strong regulators spread opportunity.”
Draper said that the problem was that the SEC was spreading fear, and that the innovative projects in crypto were leaving the country.
He said that the SEC’s regulation by enforcement was causing a tech flight out of the country, and that it was far better that all the innovation that crypto projects were providing should stay in the United States.
The entrepreneur remarked that the tech was fleeing abroad to Dubai, Singapore, Northern Europe, South America and other jurisdictions across the world.
His view is that one of the main reasons for the flight is the impact that the Howey test has on classifying cryptocurrencies as securities. He believes that this test is too old to have relevance in the crypto industry, and that it needs to be regulated “in a new way”.
Draper accused the US regulatory agencies of spreading fear on new technologies such as crypto and AI, saying:
“What’s America going to look like in 40 years? It’s going to be a total wasteland. There’s going to be no technology. Look, crypto is coming. AI is coming. What is this spreading fear about these new technologies? They’re great for us.”
On both crypto and AI Draper stated that crypto is disrupting banking, insurance, real estate, government, and much more. He suggests that AI will transform how people are educated, and will carry out all the mundane tasks.
He says that all this cannot be regulated out of the country so that the US loses all this innovation. At the end of the interview, Draper made the following comment which spells out his opposition to heavy-handed regulation:
“If you have a command and control government that tells everybody what to do, that shrinks the growth rate to almost zero.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.