Former Federal Prosecutor: There’s Much More to Crypto Than Financial Use Cases, Regulation Cannot Be One Size Fits All

Former federal prosecutor Katie Haun says that regulators really need to take stock of the fact that we’re beyond just financial use cases of cryptocurrency. “There’s much more to crypto than that,” she said, adding that “Regulation cannot be one size fits all.” Haun further said that crypto is not the Wild West and the industry wants clarity, not lack of regulation.

Former Federal Prosecutor Discusses Crypto Regulation and SEC’s Role

Katie Haun talked about cryptocurrency and its regulation at CNBC’s Delivering Alpha Conference Wednesday.

Haun is a general partner at venture capital firm Andreessen Horowitz. She previously spent a decade as a federal prosecutor focusing on fraud, cyber, and corporate crime alongside agencies including the Securities and Exchange Commission (SEC), Federal Bureau of Investigation (FBI), and Treasury. She created the government’s first cryptocurrency task force and led investigations into the Mt. Gox hack and the corrupt agents on the Silk Road task force.

She explained that there’s “still such a focus on the financial applications of the crypto ecosystem.” While acknowledging that “it makes sense” regulators would think of crypto as synonymous with financial use cases, she opined:

Regulators really need to take stock of the fact that we’re beyond just financial use cases. There’s much more to crypto than that … Regulation cannot be one size fits all. We think regulation plays a really important role.

Regarding whether the crypto space is like the Wild West, as suggested by SEC Chairman this week, the former federal prosecutor said: “There’s this myth that there’s the Wild West and that no agencies have any regulation that speaks to crypto. And that’s not the case.”

She explained that the Treasury Department put out guidance on cryptocurrencies in 2013, noting that “a lot of innovators and responsible actors and companies in the space started following that guidance, although it was difficult to implement.”

Haun proceeded to address another myth about crypto. She said “a lot of people” believe that “those in the crypto industry don’t want regulation.” Debunking the myth, she affirmed:

That is, actually, I can say a myth. It’s not that the industry does not want regulation. I always say it wants clarity. But it also does not want to be treated as a monolith.

Tesla CEO Elon Musk, however, said Wednesday that governments should “do nothing” about crypto instead of trying to regulate and control it.

Haun stressed the need for “even application.” She explained that those in the crypto industry, “who were trying to make good faith efforts, who were going above and beyond in terms of compliance,” are “the ones that are being really examined under the microscope.”

Meanwhile, companies and platforms that “made very little effort in terms of following regulations and laws” are “really getting a free pass.” She emphasized:

I think what we need is … even application. I think that’s really important and I’m hopeful that the SEC will do that. And, under Chairman Gensler leadership, that will happen.

Do you agree with Katie Haun? Let us know in the comments section below.