Abstract
Early 2024 produced a dramatic rebound in cryptocurrency markets as Bitcoin hit an all-time high price in March 2024. This surge was fueled in large part by judicial and regulatory action. After years of denials and a high-profile defeat in court, the U.S. Securities and Exchange Commission (SEC) finally approved the first exchange-traded funds (ETFs) for Bitcoin in January 2024. Many believe that these approvals will lead to a greater shift of investment funds into crypto. Crypto regulation is not, however, ready for this shift. While ETFs have clear treatment under current law, other institutions lack the same clarity or simply operate outside of regulation. These regulatory gaps produced the failures and scandals of recent years, such as Voyager and FTX, which inflicted large losses on investors. Policymakers should fill these gaps by treating crypto like a subspecialty of financial regulation, which supports the safety and operation of intermediaries like mutual funds and banks. Intermediaries, like crypto exchanges, should be required to hold appropriate assets to secure customers’ claims. These reserves must also be segregated to guard against self-dealing and insolvency. Ultimately, the goal should not be to make cryptocurrency safe. Rather, regulation should focus on the soundness of institutions (like FTX) that offer crypto to investors.
Repository Citation
Eric D. Chason,
Regulating Crypto Intermediaries,
108 Marq. L. Rev. 187
(2025).
Available at: https://scholarship.law.marquette.edu/mulr/vol108/iss1/6