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Professor and renowned economist Nouriel Roubini, also known as Dr. Doom due to his gloomy predictions, penned down a long anti-crypto letter on July 16, calling on the U.S. financial regulators and other regulators to wake up from their slumber concerning crypto.
According to Roubini, every civilized country operates stringent financial laws for good reasons. Creating a means to circumvent these laws only allows for fraudulent acts at the detriment of investors. Despite the multitude of fraudulent cases erupting every now and again in the crypto market, he argues that the government and financial regulators are yet to combat the menace posed by the crypto space. “They are yet sleeping on the wheel,” he fired.
In his own opinion, Roubini believes stringent regulations such as know your customer (KYC), anti-money laundering (AML), registering of securities, licensing of money-service activities, etc., are highly crucial in maintaining a safe economy, which is why “every civilized country in the world tightly regulates its financial system.”
What happens in a country without law? Chaos! And that is what Dr. Doom believes is happening in the crypto industry. Only this time, the chaos is the growing number of criminals and illegal activities surrounding cryptocurrency.
Going After the Crypto Exchange BitMEX and its CEO Arthur Hayes
The professor supports his claims by calling out one of the widely known crypto exchange BitMEX. He argues that trading outside the domain of laid down regulations has given rise to criminals who not only hide in their safe corners but are also openly involved in “systematic illegality.”
Using BitMEX as an example, Professor Roubini asserts that most crypto exchanges are, without a doubt, fraudulent. He claims an insider told him that the crypto exchange is being used to fund illegal activities such as drug trafficking but BitMEX doesn’t care because it is making money from it too.
He went further to accuse the crypto exchange of front running its own client, stating that because there are no independent audits, BitMEX CEO Arthur Hayes was left unscathed when the accusation came to the public light. Shooting even harder, Roubini categorically states that BitMEX is unarguably skirting the AML/KYC regulations. And saying they do not extend their services to U.S. and U.K. investors shouldn’t get the digital asset exchange off the hook as it only takes a standard VPN for one to change his location.
Therefore, he is calling on financial regulators to be alert to the deteriorating state of the crypto market and swing into action before more investors fall prey to these alleged con men.
Dr. Doom even calls out the CEO of BitMEX for withholding the video of the altercation that went down between the two of them in Taipei earlier this month. According to him, Hayes, who reportedly secured exclusive rights to the video from conference organizers, refused to release the video to the public and only released a fraction depicting his own edited good performance after much troubles.
“I suppose this is par for the course among crypto scammers, but it is ironic that someone who claims to represent the ‘resistance’ against censorship has become the father of all censors now that his con has been exposed.”
Citing a study which claims that 95% of all Bitcoin transactions are fake and another study showed that 80% of the ICOs in 2017 were fake, Professor Roubini calls on financial regulators to not only find a way to regulate the crypto market but to also investigate “Hayes and all the others overseeing similar rackets from offshore safe havens … before millions more retail investors get scammed into financial ruin.”