Erik Voorhees, CEO of cryptocurrency exchange Shapeshift, called on finance industry regulators to embrace cryptocurrencies as a competition to the existing financial system, instead of viewing the asset class as a threat to be controlled.
“Most Regulation is Superfluous”
In an interview with Bloomberg, Voorhees spoke on a range of issues within the cryptocurrency sector, including regulation, competition and the future of Switzerland-based Shapeshift AG.
Voorhees stated the existence of centrally-issued money is incongruous to the existing framework of a market-based economy. The entrepreneur compared the issuance of money to a manufacturer of shoes and noted if strict regulations forbid the latter from gaining a monopoly in the market, the same ideology must apply to fiat currencies.
According to Voorhees, money is the foremost good in a market-based economy and must be open to competition:
“Most regulation is superfluous at best, and a lot of it is quite harmful. Even if someone doesn’t buy into the idea that cryptos will overtake fiat, most people should at least be interested in the fact that competition is now happening. That’s generally seen as a good thing.”
“Focus on Preventing Fraud and Theft”
In Voorhees’ opinion, the current model of regulation creates problems instead of mitigating them. He added that rules are aimed at the wrong targets, and as a result, are hurting the economy by stifling innovation, breeding uncertainty and promoting cronyism.
Criticising American cryptocurrency regulations, he said:
“Regulation should focus on preventing fraud and theft. There is no need for thousands of pages of regulations to prevent fraud. Most of the regulations have nothing to do with preventing fraud. Consenting adults who are not cheating each other should be allowed to interact economically in any way they see fit.”
Voorhees believes that increased regulatory legislation has a positive correlation to “brain and capital flight” in the cryptocurrency industry, citing the example of the New York-based BitLicense.
The entrepreneur noted that since the launch of the four-year-old regulation, innovation in New York has died and most of the existing cryptocurrency companies have moved away from the city. Voorhees stated the new legislation had no positive economic impact except to corporate organizations – which he pointedly described as “cronyism.”
To end his interview, Voorhees provided insight into his company and specified the reason Shapeshift chose the traditional venture capital route to raise capital. Quite simply, the exchange places experience from seasoned investors over quick fundraising which ensures a legitimate execution of the intended business model.
However, Vorhees hinted at the SEC’s ambiguity over Initial Coin Offerings (ICOs) as another reason that contributes to Shapeshift’s reluctance to launch an ICO.