Taming the Digital Wild West: The Need to Fully Regulate the Crypto Market

Authors

Shawn Stevenson

First Page

1349

Abstract

Despite past doubts from sophisticated investors, cryptocurrencies have fully emerged from the underground and become a hot topic in mainstream financial discussions. At its peak, the global crypto market possessed a market cap of nearly $3 trillion, with the vast amount of that value created in less than two years. But this rapid growth has also come with extreme volatility; now more than a year out from that peak, the global crypto market has shrunk to under $1 trillion and has been riddled by high-profile bankruptcies. On top of this extreme volatility, the largely unregulated crypto market has become an easy target for fraudsters and market manipulators, leaving many crypto investors victimized by schemes that would not be executable with standard, more-regulated financial instruments.

This market cannot remain unregulated. The federal government, cognizant of the risks posed by crypto to investors and the financial system at large, has already begun to consider establishing a regulatory scheme for cryptocurrencies, but time is of the essence. The crypto market is highly complex and must be met with an adequately comprehensive regulatory scheme. While the Securities and Exchange Commission and the Commodity Futures Trading Commission have been viewed as fighting over which agency will be the one to oversee the crypto market, a coordinated approach represents the best avenue for providing effective and complete oversight. Without such comprehensive regulation, the crypto market will continue to remain a Wild West-like landscape, characterized by rampant fraud and consumer peril. Just as with any other major innovation, the crypto market must be regulated and consumers must be protected.

Recommended Citation

Shawn Stevenson, Taming the Digital Wild West: The Need to Fully Regulate the Crypto Market, 27 Lewis & Clark L. Rev. 1349 (2024).
Available at: https://lawcommons.lclark.edu/lclr/vol27/iss4/11