Cathie Wood has resumed buying Coinbase (COIN) shares after a nearly month-long absence, as ARK reported over the weekend that it had acquired 162,325 COIN shares. In addition, Cathie Wood, the CEO, and founder of Ark Invest, believes that current regulatory pressures in the United States will be beneficial for decentralization.
Cathie Wood’s unending support for crypto
Cathie Wood’s ARK last purchased COIN in mid-January, when it paid $3.3 million for the exchange’s shares. The $9.2 million purchase comes as US regulators tighten their grip on the digital asset industry.
While the Securities and Exchange Commission (SEC) did not go after Coinbase’s staking product in the same way that it targeted Kraken, worries linger about whether it will in a second enforcement blitz.
According to an early Monday Wall Street Journal report, Paxos is the next target of the SEC’s enforcement effort over its Binance USD (BUSD) coin. As a result, the ARK Innovation ETF (ARKK) is up 28% year to date, while the ARK Fintech Innovation ETF (ARKF) is up 25%.
Cathie Wood sees the crypto crackdown as a blessing in disguise
The crypto industry has always been known for its decentralized nature, which has drawn investors, entrepreneurs, and traders alike. However, financial regulators in the United States have recently increased their monitoring of the crypto sector, sparking a discussion among stakeholders in the field.
The US Securities and Exchange Commission (SEC) recently took legal action against Kraken, a renowned cryptocurrency exchange. It resulted in the suspension of its staking program for US residents and the imposition of a $30 million fine.
Cathie Wood, the CEO, and founder of Ark Invest, feels that recent regulatory challenges in the United States would benefit decentralization. However, the new legislation may have an impact on the country’s competitiveness in the crypto industry. Cathie Wood believes that heightened regulatory scrutiny will lead to people using “offshore exchanges or self-custody,” which is beneficial to decentralization.
In an interview, Cathie Wood added:
US exchanges lose to foreign exchanges, not so good for US competitiveness in the crypto revolution.
Cathie Wood
Frank Downing, director of research at Ark Invest, compared the SEC move against Kraken to China’s ban on Bitcoin mining. According to him, the enforcement might have the same effect on proof-of-stake networks. Many members of the crypto community agreed with this assessment. However, some feel that authorities must strike a balance between consumer protection and innovation assistance.
However, not everyone shares this viewpoint. For example, Nic Carter, a crypto investor, feels that the circumstance will assist crypto protocols, as exchanges becoming major nodes is the main failing of proof-of-stake.
While this may sound excellent in principle, Omid Malekan, an adjunct professor at Columbia Business School, believes otherwise. Carter’s point of view, in his opinion, would only be valid in a better society, but he also points out:
It’s only a matter of time until regulators go after liquid staking protocols. Then, eventually, only whales and institutions (accredited investors) will be able to stake legally, which is even worse for decentralization.
Nic Carter
Others in the crypto sector share Malekan’s fears. Market players point out that the restriction would require users to use centralized staking pools, which is far scarier than self-staking, and not everyone has the resources.
Gary Gensler, the SEC Chair, stressed in a statement the need for crypto intermediaries to provide the relevant disclosures and safeguards required by securities laws when offering investment contracts in exchange for investors’ tokens.
Whether it’s through staking-as-a-service, lending, or other means, crypto intermediaries, when offering investment contracts in exchange for investors’ tokens, need to provide the proper disclosures and safeguards required by our securities laws.
Gary Gensler
