The Winklevoss twins, Cameron and Tyler, recently spoke at the SXSW Conference where they shared their thoughts about all things Bitcoin (BTC) and the importance of regulation in the crypto industry.
Elaborating on why crypto regulation is so important for the space, the billionaire brothers brought up 2 separate incidents in which substantial amounts of crypto were lost.
The first example was the infamous Mt. Gox exchange hack of 2014, in which about 740,000 bitcoins were lost, with only around 200,000 recovered since. The second incident was the QuadrigaCX debacle, in which a Canadian crypto exchange lost roughly $140 million worth of crypto after the death of its CEO, who had sole possession of the exchange’s private keys.
Regulatory Oversight Is Needed
According to Tyler Winklevoss, co-founder of leading cryptocurrency trading platform Gemini, a giant problem surrounding Bitcoin and the crypto industry is the lack of regulatory oversight and internal control of the businesses dealing with crypto.
Citing the Mt. Gox hack, Tyler blames this disastrous event on a lack of regulatory oversight and internal control. Adding to this, he stated that he and his brother want to introduce rules for companies who deal with people’s cryptocurrency, so that the losses experienced during the Mt. Gox hack and QuadrigaCX incident never occur again.
The Winklevoss twin then proclaimed that traditional financial markets succeed at building trust because regulatory oversight from governing bodies ensures that those enterprises play the roles they promised.
Adding to this, he said that regulatory oversight ensures enterprises have measures in place that safeguard consumer funds or assets from unjust or unlawful practices.
Furthermore, the billionaire twin boasted that the Gemini exchange is one of the most regulatory-compliant crypto exchanges, as it undergoes examination by the New York Department of Financial Services at least once a year.
According to Tyler, the process is similar to that of an audit, as it ensures there are layers of both checks and balances. Adding to this, he said:
“That’s what regulation brings and that’s worked really well in financial markets. And, the healthiest markets in the world today outside of crypto are the ones that are the most thoughtfully regulated like the US equities market.”
“Successful Markets Without Regulatory Oversight Don’t Exist”
Adding to what his brother said, Cameron stated that no markets can thrive without regulatory oversight. Expanding on this, he said that markets need rules, as successful unregulated markets simply do not exist.
Cameron then spoke about his and his brother’s first experience buying Bitcoin on the wild west crypto exchange Mt. Gox, and how they had to figure out a secure way to store it themselves. He said:
“We ended up buying a lot of Bitcoin on Mt. Gox. So we kind of grew up in the wild west of crypto, experienced it first hand, and we also have a store of crypto. and we basically took our private keys, cut them into pieces, and stored them in secure locations all over the country… but we’re like, most people aren’t gonna do that if they get into crypto.”
After their experience of buying and figuring out how to store crypto, Cameron proclaimed that this experience was what led them to create a product people can trust. He said:
“It was a scary time, and it kind of informed us like in order for this thing to grow, we’ve got to basically build trust. Gemini’s product is really trust, like trust is our product.”
Watch the Winklevoss twins’ full interview with at SXSW below.
Do you agree with the Winklevoss twins that the crypto markets must be regulated in order to thrive and succeed? Let us know what you think in the comment section below.
