Nasdaq, Bank of America: Cryptocurrencies Pose a Threat and Should be Regulated
The CEOs of Nasdaq Inc. and Bank of America Corp. have said that cryptocurrencies pose a threat and that they should be regulated.
Adena Friedman, CEO of Nasdaq, and Brian Moynihan, CEO of Bank of America, were both speaking at a conference in New York hosted by the MIT Sloan School of Management on Friday, reports Bloomberg.
According to Friedman, initial coin offerings (ICOs) should be subjected to securities laws, an argument that has been heard from Jay Clayton, chair of the U.S. Securities and Exchange Commission (SEC). As a result, the agency has issued several subpoenas to companies in order to determine how ICOs are presented to potential customers. The agency has also warned of pump-and-dump schemes involving them.
During the conference, Friedman stated that retail investors deserved protection if they were going to put their money into a product, whereas Moynihan argued that cryptocurrencies could be used for illegal reasons.
"The idea of anonymous currencies just never turned out to be a good thing,” Moynihan told the conference. “You have a real potential risk."
He added that the use of digital currencies could fill a gap to move large sums of illicit money, which fiat money can’t do because high denomination bills don’t exist, and because of the anonymity that some cryptocurrencies present.
Interestingly, these comments from Friedman come at a time when the CEO said earlier this week that the stock exchange would be open to becoming a cryptocurrency exchange once the industry has matured. In an interview with CNBC, she said: ‘I believe that digital currencies will continue to persist it’s just a matter of how long it will take for that space to mature.’ Nasdaq is also teaming up with Gemini, the digital currency exchange founded by Cameron and Tyler Winklevoss, to use its SMARTS technology to monitor trading manipulation.
However, while the Bank of America claimed in its annual filing in February, to the SEC, that the cryptocurrency market is a risk to its business, its competitors have been showing increasing interest in the industry. Earlier this week, it was reported that Goldman Sachs had made its first hire in its cryptocurrency markets unit, signalling its seriousness in helping clients to invest in digital currencies.
Since December, the Wall Street bank has been hinting at setting up a trading desk dealing with digital currencies. The bank is aiming to have its platform up and running by the summer of 2018, at the latest.