Crypto Self-Governance Touted as Solution to Regulatory 'Mess'

The question of whether self-regulation will help solve some of the cryptocurrency industry's problems was on full display Monday during CoinDesk's Consensus 2018 conference.

"The CFTC budget has got cut this year. Even if it wants to regulate cryptocurrencies, it may not have enough resources from Congress to do so."

DeWaal was seemingly commenting on an opening remark made in an earlier talk by Brian Quintenz, a commissioner from the U.S. Commodity and Futures Trading Commission.

"The last thing we want to see is regulators take different views," Quintenz said.

In this context, DeWaal said that self-regulatory organizations can play a role in helping regulators test the waters ahead of clearer regulatory frameworks.

"One critical role of SROs ... is in elevating the reputation of regulation, as it will set a standard that will hopefully be adopted by regulators in the future," he said.

Echoing that point, Yuzo Kano, the chief executive officer of the Japanese exchange bitFlyer, said that efforts taken by Japanese cryptocurrency SROs had ultimately paved the way to the formal roll-out of a financial registration law launched by the country's Financial Services Agency in 2017.

On the other hand, regulators in other countries are moving more quickly in developing their cryptocurrency and blockchain rules.

The same solution may not be applicable everywhere, however - DeWaal argued he "Absolutely opposed to the idea to copycat regulations from jurisdiction to jurisdiction."

CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.