Cryptocurrency regulations are a hot-button topic throughout the world, with the United States taking a hardline stance on companies toiling in the space. This means companies like Coinbase and Kraken have come into the crosshairs of the Securities and Exchange Commission (SEC) with fines and cease-and-desist orders.
As a result, Shark Tank investor Kevin O’Leary is advocating for companies to work with regulation, not against it. O’Leary, who is a venture capitalist and strategic investor in Canadian crypto exchange WonderFi, recently made his stance clear.
“Litigating your regulator, in my opinion, is a really stupid idea,” he said. “You’ve got to read the room,” he added. “You have to read the writing on the wall.”
So, if the crypto space wants to fit into the current global financial services system, compliance is necessary. While Coinbase has bravely decided to push back on the SEC’s claims, O’Leary warns that it’ll prove to not be worth it in the long run.
To stay within the good graces of regulators, one of O’Leary’s advice is for companies to move their assets to Canada, citing that the country is already forging ahead with regulations that are effectively working. Perhaps this could pave the way for Canada becoming a new mecca of digital asset trading?
Because of its current moves, it’s not a surprise that Venture capital money is fleeing crypto as regulators tighten their noose around the industry in a post-FTX crackdown, according to Shark Tank star Kevin O’Leary.
The investor claimed on Monday that VC funding is now headed toward artificial intelligence.
But while O’Leary is now fully on board with regulations, this hasn’t always been the case. The Shark Tank investor previously threw shade at decentralized players in the industry and compared them to “crypto cowboys” that “mess with the primal forces of regulation.”
Not surprisingly, he suggested Dutch authorities should have arrested the creator of Ethereum-based crypto mixer Tornado Cash, Alexey Pertsev, for the same reason.
To move the industry forward, though, O’Leary believes that “necessary mergers” are needed for scaling, due to the hefty compliance cost associated with the industry.
O’Leary’s venture owns a Canadian crypto exchange called WonderFi, which plans to merge with Coinsquare and CoinSmart, two other Canadian crypto exchanges, to combine 1.65 million users and over $600 million in assets under custody.
According to O’Leary, this wouldn’t be possible without scaling — which is only achievable through merging — and would make it one of the largest regulated crypto trading platforms in the world.
So, is Canada the guinea pig of regulated crypto platforms?
It’s definitely a possibility. What’s clear is that O’Leary’s stance on regulation is setting a precedent for others to follow and allowing the industry to become part of the existing global financial services system.
Whether or not it’s for the better remains to be seen, but it’s a paradigm shift in the cryptocurrency world and should be monitored closely.
