Categories: Bitcoin Politics

Ex-SEC Chief: Bitcoin Companies Need Compliance To Succeed

Click here to view original web page at

Oct 30 - Arthur Levitt

The former Securities and Exchange Commission (SEC) chairman Arthur Levitt discussed the evolving regulatory landscape for bitcoin companies and the commission's ability to keep up with fast-paced technological changes in a wide-ranging interview on Bloomberg TV yesterday.

Levitt, who is the SEC's longest-serving chairman, became one of the highest-profile figures from the world of financial regulation to enter the cryptocurrency space when he announced that he was joining BitPay and Vaurum as an advisor two days ago.

In the Bloomberg TV interview, Levitt said he had been approached by six bitcoin companies before deciding to join BitPay and Vaurum. He said he had become "fascinated" by bitcoin as he learned about it and he highlighted the "irreverent" and "smart" entrepreneurs leading the bitcoin startups he's advising.

The former SEC supremo, whose eight-year tenure there began in 1993, underlined the importance of regulatory compliance for bitcoin companies as a legal framework developed around digital currencies in the US:

"I think the reason they approached me is because, I think, number one, they think having a former regulator probably looks good. But I also believe that a company that has transparency and passes regulatory scrutiny is going to do much better than a company that is fighting regulators ... So I don't buy the libertarian argument that we don't need any regulation."

Lawsky 'has right balance'

Levitt praised New York State's Superintendent of Financial Services, Ben Lawsky, for the way he has handled the BitLicense proposal.

Lawsky recently won a positive response from the bitcoin community after he declared software developers and miners generally exempt from the regulatory framework being devised in New York, although many still have doubts about some areas of the proposal.

Levitt pointed out that Lawsky's move, along with his call for public comments on the BitLicense, showed that he understood the "fine line" between protecting the investing public and allowing new technologies the time and space to flourish.

Levitt said:

"There are regulators and there are regulators. By that I mean a really good regulator is one who understands the balance between protecting the public and stifling an exciting and different new technology. I happen to think that Ben Lawsky has the balance right."

Levitt currently sits on the board of financial media heavyweight Bloomberg LP and online stock brokerage Motif Investing. He is also an advisor to top investment bank Goldman Sachs, trading giant Knight Capital and compliance firm Promontory Financial Group.

Benefits of bitcoin

The potential of bitcoin's block chain to reshape contracts and national currencies, as well as its ability to facilitate low-cost global transactions, was also given airtime by Levitt.

Levitt pointed to Argentina, which is experiencing a rapid devaluation of its peso in relation to the US dollar, as an example of a place where bitcoin could show its full potential.

He said:

"If you're in Argentina today and your currency is being devalued by the second, virtually, and you can't send money out of Argentina, you can use bitcoin electronically to transmit it over the web from Argentina to New York or to Berlin. So for third-world countries or countries with uncertain currencies, it's a tremendous opportunity for them."

The biggest risk for bitcoin's success, Levitt said, was its extremely high volatility. The former top financial regulator said mass adoption of bitcoin wouldn't happen while wild fluctuations in the price of a bitcoin remained.

"The greatest problem that bitcoin has today is its volatility. Unless they address that volatility, it's going to be difficult getting people to have trust, and that is essential to any good monetary system," he explained.

Regulators playing catch-up

Levitt also discussed the SEC's ability to stay on top of technological progress in general, in the wake of a new study from the University of Chicago that found certain institutional investors could obtain company filings before the general public.

Regulators would always be "slightly" behind "wrongdoers" or those seeking an advantage over other market participants, he said, and there is nothing alarming about that state of affairs. However, when the regulator is too far behind, that's when a serious problem has arisen.

Levitt said:

"You have to first assume that the wrongdoers or people who want an edge are always going to be slightly ahead of the regulators. When they're way ahead of the regulators, then the system is out of kilter. But things like this happen."

Over his eight years at the helm of the SEC, Levitt developed a reputation as a champion of the man on the street. As chairman, he warned of the possible problems arising from auditors who also did consulting duties for clients, and he was proved right by the collapse of Enron and Worldcom, according to Bloomberg Businessweek.

Levitt alluded to his interest in defending everyday investors when he described the problems the markets could face if the SEC didn't address the unfair technological advantage some investors held over others:

"The individual will think that the big guy, the big institution, has every advantage and we, the individual investor, have to take a backseat to everybody else. And that's bad. If we don't have markets that are trustworthy, we don't have markets."

Featured image: Bloomberg TV

Arthur LevittComplianceSEC

Levitt, who is the SEC’s longest-serving chairman, became one of the highest-profile figures from the world of financial regulation to enter the cryptocurrency space when he announced that he was joining BitPay and Vaurum […]


Illuminati, Mason, Anonymous I'll never tell. I can tell you this, global power is shifting and those who have the new intelligence are working to acquire this new force. You matter naught except to yourself, therefore prepare for the least expected and make your place in the new world order.

Disqus Comments Loading...
Published by

Recent Posts

Bitcoin Sheds $10,000 Support Again Ahead of Bakkt Launch

Ahead of the launch of Bakkt’s Bitcoin (BTC) futures, bears have continued to assert control over the cryptocurrency market. Ouch.As… Read More

55 mins ago

Bitcoin ‘Messiah’ Goes To War With The ‘Deep State’

One of bitcoin and crypto's oldest proponents, the founder and former chief executive of U.S. online retailer Overstock, Patrick Byrne,… Read More

56 mins ago

The Specs Behind Bitcoin’s Lightning Pass Their First ‘Formal’ Security Test

A pair of researchers have released the results of a formal verification of bitcoin’s lightning network.Lightning is new(ish), experimental, and… Read More

56 mins ago

Deja Vu 2000 Or Flashback 2007? (Part 2)

“The experience in Japan, Europe, or even the US, is that once you get into a near-zero interest-rate regime, it’s… Read More

7 hours ago

Blockchain Industry to Generate $16 Billion Revenue by 2024

Often considered as a nascent technology, blockchain was introduced about a decade ago. Although the technology has not been around… Read More

7 hours ago

Kate Winslet takes action against Bitcoin scammers who used her image

Kate Winslet has spoken out after her image was used to advertise a Bitcoin scam Movie star Kate Winslet is… Read More

7 hours ago

This website uses cookies. We use these cookies to collect data about your interaction with our website for the purpose of continuously improving your experience with our site. For more information we encourage you to read our privacy policy.

Read More