The Financial Industry Regulatory Authority (FINRA), one of Wall Street’s foremost regulators, is seeking to have a larger footprint in the digital asset industry. As a first step, FINRA is seeking to boost its workforce, and it believes it can offer a new home for the thousands of employees laid off by digital asset and blockchain firms as mass layoffs continue.
During a trading industry conference, FINRA chief executive Robert Cook revealed that becoming more digital asset-ready has become critical for the organizations as many of its members continue to engage in the industry.
“We are already having to be engaged in the space and we think that as a result it’s appropriate for us to bulk up our capabilities there,” Cook stated, as reported by Reuters.
FINRA is a private corporation that acts as a self-regulator for brokerage firms and exchange markets, boasting 3,435 members as of 2020. As Cook revealed, it has several dozen members who are already licensed to trade digital assets, while others allow users to access such products.
In addition, FINRA is working on digital asset verification techniques, and it’s also exploring cross-market surveillance on several blockchain networks. These engagements, and many more, have been pushing the regulator to onboard more blockchain experts, and as Cook noted, who else knows more about the industry than the people who have, until recently, been building it?
“We’re going to need to be engaged and prepared to have the resources to do that, so anybody who is getting laid off from a crypto platform and wants to work for FINRA, give me a call,” he stated.
Over the past few years, a number of U.S. regulators have been fighting to become the watchdogs of the lucrative digital asset sector, most notably the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The SEC has been the de facto regulator so far, although this could all change depending on the outcome of the SEC vs Ripple case.
Cook understands that every regulator wants a piece of the sector. However, he told the conference that regardless of who is designated to oversee the sector, he believes that FINRA will have a role to play as it regulates some of the most important players in the industry.
Coinbase, Crypto.com, BlockFi, Genesis, and more lay off thousands
While FINRA may absorb some of those that have lost their jobs of late, it certainly wouldn’t be able to accommodate the thousands that have faced the cut from digital asset firms this year.
Just this week, Coinbase CEO Brian Armstrong announced that the Nasdaq-listed exchange was giving the pink slip to 1,100 employees (or 18% of its staff), the biggest layoff by a digital asset company this year. Armstrong said that the layoffs were due to the ‘crypto winter’ that he says could last for years.
The controversial Coinbase (NASDAQ: COIN) layoffs are not unique. Several other digital asset firms have laid off their staff after three years of aggressive growth and hiring as the price of most digital currencies shot up to record levels. Coinbase, for instance, had indicated earlier this year that it would triple its workforce, a plan that Armstrong said had been shelved until market conditions improve.
Gemini exchange cut off nearly 10% of its staff, South America’s second-largest exchange Bitso laid off 80 workers, BlockFi has let 20% of its workforce go and even Crypto.com, which paid $700 million for naming rights to the Staples Center, laid off 260 workers.
The cutoffs all point to the same critical issue, which has plagued the industry for years: an overwhelming majority of projects have been built on hype, false promises, the hunt for quick bucks, and a zero-sum game mentality.
Many projects have attracted millions of dollars and grown to become worth billions without having any viable product that has any utility in real life. NFTs are a prime example, with projects like Bored Ape Yacht Club and its Otherside offshoot notching billions in trading volume purely based on the greater fool theory.
Utility, which BSV undoubtedly leads in, will always win in the long term, and companies that are solving real-world challenges will withstand the price upheavals. The others, built on hype and great marketing, are already beginning their downfall.
Charlie Silver, the CEO of Web 3 advertising platform Permission.io best summed it up, stating:
“The bear market will not affect the real builders. Price action should not be meaningful to the companies that are building useful applications and are creating valuable infrastructure.”
Watch: The BSV Global Blockchain Convention panel, Blockchain Venture Investments: Driving Utility for a Better World
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