Stifel’s CEO believes that rules are necessary to boost innovation within the cryptocurrency industry.
Cryptocurrency companies need to build trust with their users.
Customer protection should be at the heart of every cryptocurrency company.
Trust is needed in the cryptocurrency space
Ron Kruszewski, the chairman and CEO of Stifel, told PYMNTS in a recent interview that trust is needed within the cryptocurrency space. He made this comment while talking about the recent collapse of the FTX crypto exchange. He stated that
“Look, if I were running a crypto fund. I would be sitting in front of you saying we need to assure our customers that putting money in crypto is really no different than putting money in a bank, and that we welcome the regulation — how can you have a payment system if you don’t trust that your money will get where it’s meant to be going?”
Kruszewski added that cryptocurrency entrepreneurs need to ensure that people have confidence and trust in what they are building. He added that
“Let’s ask [these companies] the tough questions. These are the people building the ecosystem, they need to make sure everyone has confidence in it. I’d really like to see that.”
Regulation will promote innovation in the crypto industry
Kruszewski believes that regulation is important for innovation to continue in the cryptocurrency market. He told PYMNTS that;
“What I find amazing in all this is that I’ve yet to see crypto leaders go out and say ‘we segregate our clients’ funds and our clients’ securities.’ Until they can say ‘yes’ to that, the industry will not move forward. “Until we put rules [in place], we will not encourage good innovation. You can’t really have destructive technology in the financial system. The U.S. has the most sophisticated, deep and fair markets in the world because we put good rules and regulations in place, and we need to do that for crypto — and then crypto can flourish and [consumers can] enjoy its true business applications versus where it stands now, unregulated, just a casino.”
The Stifel CEO added that consumer protection should be an important factor to consider when building cryptocurrency products.
“The concept of the customer protection role at its heart means you will not co-mingle your customer funds, and importantly you will also have what we call possession and control — if you give me your money or securities, I will know where they are and know that they are yours,” Kruszewski told PYMNTS’ Karen Webster. “It should be clear the SEC has the jurisdiction to protect U.S. investors.”
Several CEOs in the crypto space have commented about the FTX fiasco. Earlier this week, Coinbase’s Brian Armstrong called the FTX collapse a massive fraud.
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