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Robinhood executive criticizes Coinbase’s proposed regulation: “Ridiculous”

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In October, American cryptocurrency broker Coinbase proposed what it saw as the ideal solution to the regulatory problem in crypto: a new federal regulatory body.

Dan Gallagher, General Counsel for Robinhood, Coinbase’s adversary, believes it’s not feasible. “It’s one of the stupidest ideas I’ve heard in this industry lately,” he told Georgetown University Financial Markets Quality conference attendees.

He said attempts to transfer authority from agencies such as the Securities and Exchange Commission (or SEC) and the Commodity Futures Trading Commission (CFTC) would likely be incomplete and would only add more people.

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Coinbase’s “Digital Asset Policy Proposal”, published on October 14, presented a way to minimize the number of agencies that crypto market participants could face.

“To avoid fragmented and inconsistent regulatory oversight of these unique and competing innovations, responsibility over the cryptoactive markets must be assigned to a single federal regulator,” he said. “His authority would include a new registration process designed for digital asset markets (MDAs) and providing adequate data to inform buyers of digital assets.”

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In response to Gallagher’s comments, Coinbase issued a new statement:

We welcome any discussion of how to reform a system that is not adequate when it comes to crypto. However, to be clear, our proposal never called for a new regulator: it is regulator agnostic.

It calls for crypto-focused proposals, not the use of old precedents for new technology. We welcome the debate and if others have concrete ideas, share them. There is space for everyone to contribute.

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Currently, several agencies are eyeing the cryptoactive sector.

The SEC is charged with regulating securities (tradable investments in companies trying to generate profits).

In October, Gary Gensler, chairman of the SEC, declared that Coinbase had “dozens of tokens that can be securities” even if it is not licensed to operate as a stockbroker.

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There is also the CFTC. In October, during his confirmation hearing, President Rostin Behnam urged the Senate to be “the chief prosecutor” for digital assets, despite his agency’s traditional mandate to regulate derivatives markets, not commodities themselves.

And a variety of other government officials are frequently involved in the industry, including the Office of Currency Control (OCC), banking regulator formerly headed by former Coinbase executive Brian Brooks, as well as the Financial Crimes Combat Network (FinCEN).

In addition, the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Bank, and the OCC have joined an interagency team to coordinate crypto policies for banks.

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Gallagher, who served as the SEC’s representative during the Obama administration, cited well-intentioned legislation introduced after the financial crisis between 2008 and 2009, precipitated by defaults on high-risk mortgages.

“[A Lei] Dodd-Frank started limiting the number of agencies and providing clear jurisdiction, so they got rid of one agency and added three,” he said.

“So we ended up with a balance of two [agências] more after Dodd-Frank and with even more confusion about jurisdiction. The idea of ​​adding a new regulator is completely ridiculous.”

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Gallagher was referring to the Dodd-Frank Consumer Protection and Wall Street Reform Act, which ended the Treasury Department’s Office of Oversight of Savings and Loan Associations (OTS), merging its tasks with the OCC, FDIC, and Federal Reserve and the newly created Department of Financial Consumer Protection (CFPB).

Dodd-Frank also created the Financial Stability Oversight Board (FSOC) and the Office of Financial Research (OFR).

Robinhood and Coinbase were targeted for being the two largest platforms for acquiring cryptocurrencies in the US. However, both took different steps.

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Brian Armstrong, CEO of Coinbase, promised to list every legal asset, prompting the broker to quickly add dozens of new currencies and tokens this year.

In contrast, Christine Brown, chief operating officer of Robinhood Crypto insisted on a more cautious approach that limits the trading app to just seven cryptoactives.

Last week, she told Decrypt: “We want to ensure that we are working on evaluating everything very well from a regulatory perspective.”

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Even if Coinbase’s plans are “ridiculous”, other people are thinking about the juggling crypto participants, as well as possible loopholes in the current environment.

In testimony to the US Congressional Board of Economic Committee this Wednesday, Tim Massad, a researcher at the Harvard Kennedy School, told lawmakers: “The CFTC can regulate bitcoin futures the same way it regulates cattle futures, but the CFTC does not regulate the purchase and sale of cows. Nobody regulates the buying and selling of bitcoin beyond the states – that’s a very light approach.”

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Robinhood shows off Wallets Alpha with Dogecoin transfer, does Shiba Inu stand a chance

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If things go right, those trading on the Robinhood platform could soon send a certain meme coin from their Robinhood wallet to an external one.

Christine (Hall) Brown, Robinhood’s Crypto COO, shared a screenshot that showed a transfer of 420.71 DOGE [$94.10 at press time], to the excitement of crypto watchers.

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Speaking about the Wallets Alpha program, which had specially chosen customers test the crypto wallets, Brown earlier said,

“One alpha tester expressed wanting to use wallets to potentially receive crypto as payment for their business, while another wants to use crypto instead of dollars to split bills with friends (which will be made possible by sending the dollar value amount, but in crypto).”

A happy pupper
Dogecoin creator Billy Markus was also suitably impressed by Robinhood’s update, if his tweet was anything to go by. Markus also took the opportunity to point out the relatively low DOGE fee.

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For her part, Brown added,
“As this is transfer off of Robinhood, there is a network fee which is dictated by the network (this fee goes to DOGE miners who verify transactions). The fee = 0.02 DOGE (just $0.005) Transfers between Robinhood wallets/customers will not incur a network fee (or any fee).”

Well, why is the fee such a talking point? It’s important to note that the Dogecoin Core 1.14.5 version upgrade finalized the minimum recommended transaction fee, setting it at 0.01 DOGE/kb.

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On a related note, the same update caused issues for the crypto exchange Binance, which stopped DOGE network withdrawals earlier in the month. In addition to this, users reported getting free DOGE from previous failed transactions – probably due to the new minimum fees.

Following a tweet from billionaire Elon Musk, Binance put out a thread explaining its technical issues. The exchange said that it was rebuilding the wallet, and that the process might take another week.

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At press time, the market was down and DOGE was finding new homes at $0.2243.

To SHIB or not to SHIB?

Whenever DOGE comes up in conversation, you can bet SHIB isn’t too far behind. However, members of the SHIB army were disappointed when reportedly, Brown made it clear that DOGE being listed on Robinhood didn’t mean free entry for SHIB.

However, crypto researcher Max Maher had earlier predicted,

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“So if I were to guess, Shiba will calm down a little bit for a period, and then Robinhood will make their big announcement, and that will shoot up the price 10 to 18% in a single day, from wherever it’s sitting at that point.”

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“This Is Huge”: Robinhood Is Testing Dogecoin Wallet

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Robinhood has sent Dogecoin to an external wallet for the first time to test the much-anticipated feature

Christine Brown, chief operating officer at Robinhood Crypto, has offered a sneak peek at the app’s much-anticipated cryptocurrency wallet feature. 

In her recent tweet, she attached a screenshot of a test Dogecoin transfer that took place last week.

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Brown
Image by twitter.com

It shows a 420.71 DOGE ($91.82) transaction being processed for a 0.02 DOGE ($0.0044) fee. Payments on the network of the flagship meme coin have become significantly more affordable following the much-talked-about release of Dogecoin Core 1.14.5. 

Dogecoin co-founder Billy Markus said that the development was “huge” for the meme coin in a tweet while praising the coin’s cheap transaction fees. 

The company announced that it was adding cryptocurrency wallets in late September to the great delight of its customers.

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Earlier this month, Brown revealed that 1.6 million users had already joined the waitlist.  

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Why Robinhood, Blockchain.com ‘can’t just go out and list Shiba Inu tomorrow’

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Blockchain.com Co-founder and CEO Peter Smith noted in a recent interview that the consumer-facing crypto-business has grown rapidly this year. Here, it’s worth noting that the U.K-based company had shared figures of $1.5 billion year-to-date (YTD) in revenue just last month.

However, despite strong growth and the company’s focus on the consumer side of the business, Blockchain.com CEO is unable to immediately list new tokens like Shiba Inu. He explained,

“We can’t just go out and add Shiba tomorrow, or put 100x leverage on.”

The exec went on to add that Blockchain.com holds licenses in jurisdictions globally, and functions as an “onshore regulated company.” According to him,

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“I think almost all of the legitimate volume in the crypto-space will be onshore and we’re here to build a business.”

Comparing the situation with other regulated platforms like Coinbase, Smith also explained that it takes longer for them to list “new assets or a new feature than some other companies.”

Listing spotlight

As far as the listing of SHIB tokens is concerned, Coinbase took a different approach and went ahead with the listing in September. Meanwhile, crypto-exchange Kraken has made it clear that it is still vetting that possibility.

Here, it’s worth noting that the SHIB army doesn’t look too happy about possible listings being delayed any further. Especially on platforms such as Robinhood.

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Robinhood was in the news earlier today after COO Christine Brown revealed that the company’s crypto-wallet waitlist had topped 1.6 million users. But, she did not specify if the SHIB listing is on the cards any time soon. On the contrary, she did argue,

“The idea of meme investing, I think needs a little bit of an attitude adjustment.”

Explaining that Robinhood had listed DOGE in 2018, Brown agreed that a “community is incredibly important to cryptocurrencies and the projects and protocols.”

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SHIB has seen a lot of community-backed traction in recent months. At press time, the altcoin had a market cap of over $29.4 billion and was the 11th largest crypto on CoinGecko.

But, what will decide value in the long term?

According to Smith, customers will not trust businesses in the long run if they list something for immediate “skyrockets within a year of false factor.” He said,

“Our business is predicated around the idea that we want to be your trusted partner in the cryptocurrency space for the next 30,40,50 years.”

Simply put, it essentially means that Blockchain.com is trading off short-term revenue for long-term value. Meanwhile, the exec also suggested that “projects are really growing from an actual usage perspective.” This means that the platform might ignore meme listings for the time being.

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Brown concluded the conversation by claiming that a “majority of Americans have a long-term outlook on crypto.” She said,

“We want to make sure that we’re working and assessing everything from a regulatory perspective.”

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