Ken Yagami was a successful securities trader for over 20 years…I know this because we worked together in Tokyo at Morgan Stanley and stayed in touch for most of that time. Ken has now moved into the Crypto space and is currently the Japan Country Manager for SwissBorg. Ken writes about Crypto and in this case is writing about regulation and what he learned from his time on ‘Wall Street…’
Security wise, as powerful as the blockchain may be, the removal of a central “middle man”, or decentralization, places great responsibility on the users themselves. The utmost care has to be taken in terms of computer security to the point where it sometimes defeats the very purpose of this technology. For example, printing your private key on physical paper and storing it in a safe seams to offset the fact that the Blockchain is an immutable architecture. If you are a business taking custody of customer private keys, the responsibility is even greater. Regulation is another constant concern. The only difference with cyber security is that there there are no firmly established and accepted standards. Businesses are fully exposed to the risk that a jurisdiction that they are operating in may close its doors without warning or that a legal grey zone suddenly turns pitch black.
Ken makes some very good points about regulatory approaches and without being prescriptive, notes some of the potential alternatives.
Having no regulatory oversight leaves the door wide open for people and businesses to operate in total disregard of accountability giving birth to such things as ICO scams. This situation is clearly not ideal, regulation is necessary. Though in some cases, bad regulation can even be worse than no regulation.