When people lose money or resources, they often turn to the government to help them receive some of their money back. However, one of the reasons they invested was a seemingly lack of regulations. The government is between a rock and a hard place, because the lack of regulations means the government can do a little, for the courts have to decide if an illegal act has happened. In the case of crypto, the government is looking to bring in some regulations.
In an article by Glenn Gamboa of the Associated Press, some US Senators want to impose regulations on crypto exchanges which operate in the US.
Crypto was once touted as the alternative to the US dollar and a seemingly unregulated market, while the coins are regulated by the exchange, the identity of the purchaser is kept secret. This has resulted in those who make income from non-legal manners were drawn to the crypto exchanges. In the same fashion as money deposited in countries whose banks are in tax free haven countries brings in non-legal dollars.
Senator Warren has a proposal; Senator Gillibrand has another while some of the spokespeople now encourage regulations.
Sam Bankman-Fried believes FTX was at war with Binance over the unregulated market.
The government of the US, say FTX customers and investors were defrauded by FTX as Mr. Bankman-Fried diverted funds from the main account to cover expenses, debts and risky trades at Alameda Research a crypto hedge fund.
Linking to dividend paying stocks, one of the reasons you wish to own these types of stocks is they are traded on very regulated exchanges, or they should all have good governance. In the TV show, the Marshalls – one of the leading characters said to both follow the money trail and when the CEO was on the run, where did the person grow up. Often times when something goes wrong, people go back to first principles or their background. With profitable stocks investing the first principle is does the company still make money or is profitable? can it easily pay the dividend? and then other concerns can be asked.
There are more questions than answers, till the next time – to raising questions.