“A lot of people have losses who didn't understand the risks they were taking,” former CFTC Chairman Timothy Massad said on CoinDesk TV’s “First Mover,” referring to the freezing of withdrawals on CelsiusNetwork. _franvela reports
dollars to Celsius. When asked if any securities laws were violated on the latter transaction, Massad said that “it’s hard to make a judgment,” citing Tether’s lack of transparency.“There is the possibility that this was an unregistered investment fund,” he said. “There is the possibility it was making unregistered offers and sales of securities.”
More broadly, Massad adds that for the stablecoin industry, there is a role for stablecoins that are backed by high liquid assets, such as cash and Treasurys, but a regulatory framework is needed.“I think one can be created under existing law,” Massad said, who also told CoinDesk he is working on a paper with a Harvard Law School professor on the topic. “I don’t think we need to wait for legislation.
Moreover, Massad said, resources are needed to create a framework of regulation that would impose the same standards that are in place for securities markets that could be used for crypto as well. “You simply say, any platform that is trading even one instrument, which is a security or a commodity, has to basically comply with some core principles, some basic standards for everything that’s traded,” he said.“We need a framework of reasonable regulation for crypto that can support innovation and that gives people confidence that they know what they're investing in if they choose to invest,” he said. “It’ll help ferret out the meaningful, sensible innovations from the scams.