Cardano doesn’t like crypto regulation, nor should crypto investors


Cardano (CCC:ADA-USD) gets recent titles, but not as much as a potential successor Ethereum (CCC:ETH-USD).

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It also doesn’t attract attention because of its smart contract capabilities after the previous Alonza upgrade.

Instead, Cardano is preparing news these days based on the opinions of its founder Charles Hoskinson, as it relates to the regulation of cryptocurrencies.

Hoskinson made no effort to shake up the current environment. Instead, he seems to be advocating significant changes.

New regulatory body

Hoskinson notes that cryptocurrency does not fit perfectly into the current scheme of regulators and types of assets. It also suggests that cryptocurrencies should not be treated as either commodities or securities, stating:

It needs to be arranged according to how it is used. You need a different regulatory system and this is not so well illustrated in the US because we usually create a regulatory body for a type of asset: the CFTC treats commodities, derivatives, just as the Securities and Exchange Commission treats securities. ”

It almost suggests that Hoskinson is in favor of creating a new regulatory body dedicated to cryptocurrency.

This, however, will almost certainly not happen. An alternative, highly likely scenario is that the SEC will gain much more control over cryptocurrencies in the future.

This is negative for Cardano and crypto in general.

Control hurts, it doesn’t help

Cryptocurrency regulation either predicts a new wave of growth or slows down, depending on your perspective.

Yes, increased control establishes a codified set of laws that define what is and what is not allowed in the new world of defi, blockchain, and cryptocurrencies. This probably gives more confidence and investment capital over time.

But if you, like Hoskinson, are skeptical about the supposed benefits, there are many hints that this is simply not true.

There is a parallel between suspicious activity reports (SARs) that institutions currently rely on and the SEC’s regulation on cryptocurrencies.

He notes that SARs are first identified almost exclusively by the institutions themselves and not by the IRS.

“This means that in 99% of the time, not the IRS discovers something on its own, or the SEC that discovers something,” Hoskinson said. “This is actually reported to them by the financial intermediary.”

Such increased SEC control over cryptocurrencies means that regulators know nothing more about cryptocurrency, but only control more. This SEC control pulls prices down, but does not prove that the SEC provides a clearer framework.

He looks like a bigger police force than anything else. Honestly, this is done by the commission, but according to Hoskinson’s point, the SEC’s intervention will not be positive.

Consequences for ADA prices

Hoskinson’s comments in this case have little correlation with ADA prices. There are probably few investors and traders who can deduce from his comments that they can benefit directly from a price perspective.

But this at least indicates that Cardan’s management is closely monitoring the legislative changes, coming to its own conclusions and publishing them.

In other words, Hoskinson is trying to separate himself and his company as thought leaders when it comes to regulatory measures governing the crypto landscape.

The Cardano team has a reputation as a kind of choir of high thinkers, even in the crypto space. They seem to play a long game in a space too often defined by dazzling projects with much less content.

This makes Cardano a less attractive investment in a sense. But it also means Cardano is likely to make smart moves given the upcoming crypto landscape.

What to do with Cardano

I remain a fan of Cardan and what they build. The company has entered the third of five phases, Goguen, with the advent of smart contract capabilities.

There’s probably little indication that the ADA is currently moving up or down, but I would bet on that with great confidence in the long run.

At the date of publication, Alex Sirois did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author who are the subject of Guidelines for publication.

Alex Sirois is a freelance contributor to InvestorPlace, whose personal style of investing in stocks focuses on long-term stock purchases, buying and holding, and wealth creation. As he has worked in several industries from e-commerce to translation to education and has used his MBA at George Washington University, he brings a diverse set of skills to filter his writing.


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