By Ike Brannon. October 26, 2022. (Forbes).
Federal regulators are notorious for bogging down industries and stifling economic growth with myriad regulations, which is why most industries are loath to ask Congress to enact more regulations. Yet, that’s precisely what cryptocurrency companies and investors alike are asking for.
The fact that Congress has yet to consider any crypto-specific legislation has left regulators to their own devices, to which they have responded by adopting a strategy of regulation through enforcement: Instead of prescribing what is and is not possible in this space they merely react to the actions of market participants and then determine whether what they did is, in fact, allowable.
While such ex post regulations are easier for regulators, it leaves us with a market in which those that innovate in this market risk being subject to retroactive punishment and ruinous lawsuits.