Roads made of dust, good guys but also many bad guys, Indians confined to reserves, alcohol and violence, while riding through red and endless sunsets. For a long time, the historical landscape (and, above all, our imagination) has been populated with such elements when thinking of the Far West.
But how many of these elements also characterise the crypto world? Well, this world is made of wonderful views, of new ‘technological railways’ ready to connect the different ‘cities’ that populate our reality, just like the first American railway connected New York to San Francisco in the ancient West; but as in every Far West worthy of respect, thereare also saloon swindlers, unscrupulous bandits and the new sheriffs ready to catch them after long and bloody shoot-outs.
In the crypto world, the past year has seen criminal episodes such as the rug pull of the Squid Game (SQUID) token, which rallied 45,000% before collapsing, but, in this case, the only ones to ‘play Indian’ were the founders of the project, who probably disappeared into some crypto ‘reserve’. We also have some crypto exchanges, very similar to some saloons of the past, where improvident players seek economic returns from rather exotic blokchain projects; then, we have the digital gold diggers (i.e. bitcoin) who sometimes instead acquire, at best, brass, if not being directly torluped by the barkers of non-fungible tokens (yes, because many NFTs are just junk or examples of wash trading, while fine art requires decades of selection by critics and exposure in the world’s leading galleries to establish itself on the markets, as well as having to offer diversification and decorrelation from other assets...).).The Crypto Far West market is large and there is room for any fair: recall the recent multi-million dollar sponsorships of crypto operators to Italian football, which is increasingly in need of funds. In such cases, the adage crypto non olet is quite appropriate, especially when many of the sponsors have already been sanctioned in other jurisdictions for violations of anti-money laundering regulations and/or have patently violated the rules governing the provision of investment services and activities, or, in any case, have corporate structures of dubious Byzantine complexity and/or registered office in opaque jurisdictions. Recently, Arsenal Football Club was forced to stop marketing a fan token due to a lack of transparency in consumer information and Manchester City suspended its partnership with DeFi crypto company, 3Key, for failing to pass the minimum due diligence requirements of the club. Even with regard to Italian football teams and some of their famous crypto sponsors, more attention from our supervisory and judicial authorities would be necessary: I suspect a great deal of lack of clarity in the financial statements of these companies, in their commercial communications and, unfortunately, also regulatory arbitrage. Would it not be desirable for some of these companies to have their websites blocked by CONSOB, as was recently done, or are the Italian sheriffs not interested in the connection between the world of Italian football and the crypto world?
If we complain about a lack of sensitivity on the part of our sheriffs, the same cannot be said for those overseas. Perhaps a little quietly – as is often the case – and in a somewhat cryptic form for readers unfamiliar with the language of politics, but a crucial message addressed to crypto market participants has nevertheless been leaked by one of the best known, most feared, and most experienced sheriffs of the Crypto Far West, namely, the Chair of the U.S. Securities and Exchange Commission (SEC), Gary Gensler. In a recent statement, “Remarks before the Investor Advisory Committee“, recalling how the crypto market has reached considerable volumes, he pointed out that the American regulator is no longer willing to turn a blind eye to elusive/abusive conduct:
“For those who want to encourage innovations in crypto, I’d like to note that financial innovations throughout history don’t long thrive outside of our public policy frameworks. If this field is going to continue, or reach any of its potential to be a catalyst for change, we’d better bring it into public policy frameworks. ” It seems that the above diplomatic language, if uttered by a Wild West sheriff, might sound something like this: “Dear Cryptobandites and Co., we’re coming to get you inside the saloon, turn yourselves in first (and we’ll negotiate, eventually) or you’ll be hurt! By the Sheriff, Gary Gensler“.
Therefore, what emerges from the US SEC’s statement is that, as the crypto phenomenon grows in volume but also in social relevance, the most authoritative supervisory bodies are no longer willing to tolerate conduct at the limits of legality (or in its most patently disregard) on the part of some crypto market players. All players in the ecosystem who have so far assaulted stagecoaches, injured people and sought refuge in the wild valleys of the crypto world are invited to rethink their business models and commercial offers, in order to be innovators and credible interlocutors with the authorities, for the harmonious development of the crypto ecosystem.
On the other hand, it is worth mentioning – should it be necessary – that the crypto ecosystem boasts operators of undoubted value and reliability who, also in Italy, seek a constant dialogue with the authorities for the development of the sector in full compliance with the regulations; likewise, we have, however, representatives of traditional finance who have shown little transparency in their communications with the public on the subject of cryptocurrencies. It was well known in the crypto environment that, over the past few years, UniCredit Italia had terminated its contractual relationship with some of its account holders for repeatedly sending funds in fiat currencies to some exchanges to purchase cryptocurrencies, thereby limiting the operations of its customers. What was known – mostly to insiders or poor account holders who had seen their operations restricted – has now become public knowledge with an official tweet from UniCredit Italia in response to some criticism of it in a Twitter discussion. In a tweet dated 7 January, UniCredit Italia explained its conduct by replying to some angry customers that:
“[…] current Group policies prohibit relationships with counterparties that issue virtual currencies or act as trading platforms.”
Interestingly, in a subsequent tweet clarifying the tweet of 7 January, the Italian banking institution denied what it had previously stated:
“We confirm that UniCredit does not currently invest in cryptocurrencies. However, we would like to clarify that UniCredit does not inhibit its customers from trading in virtual currencies at all, without prejudice to our recommendations on the risks associated with these instruments. We apologise for any misunderstanding. For more information please see the link in the post. “
The second tweet seems to contradict UniCredit Italia’s policies: have they changed as a result of the recent media fuss? It would be good to know this more clearly or other customers may decide to leave UniCredit Italia. Let it be said that the whole affair sounds like a ‘spaghetti crypto western’!
While 2022 will be a year of regulation for the crypto world, it would be good to see some prestigious banking institutions reconsidering outdated corporate policiesand engaging in more dialogue with the more serious realities of the crypto world.
And, in the end, as in all stories, someone will say, one day, that there was once ‘The Wild‘ even in the Crypto Far West…
Article taken fron the author’s original translation
…TO BE CONTINUED…
