Cryptocurrencies pose a threat, must be regulated, CEOs say

crypto

New York: Nasdaq Inc chief executive officer Adena Friedman and Bank of America Corp. CEO Brian Moynihan rang alarm bells about the nascent cryptocurrency market, calling for regulation of certain trading and warning about the potential to abet criminal behavior.

Initial coin offerings should be subject to securities laws, Friedman said Friday at a conference in New York hosted by the MIT Sloan School of Management. She said retail buyers deserve protection if they are to invest in the products. Moynihan warned that digital currencies could be used illicitly.

“The idea of anonymous currencies just never turned out to be a good thing,” Moynihan told the conference. “You have a real potential risk.” Higher-denomination bills don’t exist partly because of concern they could be used to move large sums of illicit money, he said. Yet digital currencies could fill that gap if they offer their users anonymity.

Wall Street leaders have diverged over whether to embrace cryptocurrencies as innovations or rein them in as threats to the global financial system. While Bank of America has largely eschewed bitcoin, declining earlier this year to assist with certain investments for customers, competitors such as Goldman Sachs Group Inc. have shown an interest in handling client trades.

Initial coin offerings, in which ventures sell their own tokens to fund or facilitate their business, have prompted repeated warnings by US regulators that many tokens may amount to unregistered securities and could burn buyers. Securities and exchange commission chairman Jay Clayton has said he’s been shocked to see how much fraud is occurring in that space. Bloomberg

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