Satoshi Nakamoto was most likely not a Russian money launderer, but that theory was briefly proposed during a meeting hosted by the Commodity Futures Trading Commission (CFTC) on Friday.
CFTC commissioner Brian Quintenz opened the meeting with a brief overview of the subcommittee, which was formed in February, explaining that the session "should spur further discussion about how the CFTC, other regulators, spot platforms, and market participants can all contribute to enhancing this market's credibility and safety."
As Andre McGregor of TLDR Capital pointed out, billions of dollars worth of bitcoin has been stolen over the last decade from crypto exchanges.
"Consumers blindly trust hot wallets," he explained, and while some investors set up hardware wallets and take other actions to protect their holdings, many do not.
Richard Gorelick, the head of market structure at trading firm DRW Holdings, told the meeting that "smart regulation" may be able to help the industry develop better practices to protect investors.
But this would only form one part of any wider potential solution, he said.
"One of the points we raised on the subcommittee was that there is an opportunity for industry organized efforts to help fill some of these gaps," he said, adding:
Two Sigma Investments managing director Alexander Stein added that improving exchange security would aid regulators and investors as well.
"The Achilles heel [of bitcoin] is ... [the] unregulated world of exchanges where the exchange may or may this not be employing AML/KYC and if I can deposit bitcoin into some exchange outside of the United States, [that's game]," he said.
TAC panel image via CFTC
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.