Charles Hoskinson has told Congress it should make regulations for crypto but leave compliance up to the software developers.
Hoskinson compared the ideal arrangement for crypto regulation to the way banking self-regulation works, telling legislators “it’s not the SEC or the CFTC going out there doing KYC-AML, its banks.”
The Securities and Exchange Commission and the Commodity Futures Trading Commission are two of the financial regulators battling over jurisdiction of the crypto industry.
Republican Representative Austin Scott from Georgia posed that neither the SEC nor the CFTC have the manpower to oversee the thousands of cryptocurrencies on the market, saying “it’s not possible to regulate all these currencies.”
Hoskinson replied that the ability of cryptocurrencies to store and transfer data meant they could carry out much of this regulatory work automatically. He also used it as justification for allowing the crypto industry to create self-regulating organizations to guide regulatory compliance, like the private banking industry does.
Hoskinson suggested that the industry could create a self-certification system that could automatically monitor compliance until an anomaly is encountered, at which point a financial authority would review it.
Further explaining why manpower should not be a concern for crypto regulation, He hypothesized that even quadrupling the size of the Internal Revenue Service would not be enough to audit every American.
