Bitcoin whale Michael Saylor urges governments to step in and regulate cryptocurrency’s ‘parade of horribles’

The world’s largest public holder of Bitcoin has urged regulators to finally deal with a list of risky and immature practices by the cryptocurrency industry, or “parade of horrible”, that are unfairly weighing on its asset price.

Microstrategy CEO Michael Saylor argues that the more than 19,000 cryptocurrencies and digital tokens in circulation should be seen as “unregistered securities” that cannot be compared to a hard commodity like Bitcoin – which has no issuer, management, employees. , product cycle and only a finite supply.

Speaking in a webcast with the founder of NorthmanTrader Sven HenrichSaylor said that Bitcoin was being caught in the crossfire of a collapsing cryptocurrency market, as it often served as collateral on margin loans for less-proven tokens.

“What you have is a $400 billion cloud of opaque, unregistered securities trading without full and fair disclosure, and they are all cross-guaranteed with Bitcoin,” he argued.

He added that major financial institutions generally do not touch an asset like Bitcoin “because of the sludge that enters the asset class of all unregistered securities.”

Nouriel Roubini, a respected economist and one of the few to have predicted the 2008 global financial crisis, called the cryptocurrency a collapsing ponzi scheme under its own weight on Saturday.

It’s attitudes like these that make Saylor, a critic of government intervention in the free market during the pandemic, believe that regulators should and eventually intervene to protect investors from the bad apples.

the parade of the horrible

“If I make a parade list of horribles,” Saylor said, “they’re all going to reverse reasonably in the next 10 years.”

He said even strong multinationals like Apple would see more volatility in their share prices if there were no regulations that, for example, prevent wash trading, a practice of artificially inflating prices when trading between two portfolios owned by the same party.

He cited cryptocurrency hedge funds like Three Arrows Capital, or 3AC, as a hindrance rather than an enabler to cryptocurrency adoption.

“The general public shouldn’t buy unregistered bonds from wild bankers that may or may not be there next Thursday,” said Saylor, whose company owns 129,218 Bitcoin at the end of March.

3AC is in danger of complete collapse, in part due to a failed bet on the value of Luna, the governance token that backed the failed TerraUSD stablecoin.

Last week, crypto lender Celsius froze all withdrawals and transfers amid a liquidity crisis, and speculation continues as to whether the ongoing bloodbath in the market will only claim this trio as victims or if more will emerge.

“Cryptocurrency exchanges, both offshore and onshore, are unregistered, unregulated and offer 20x leverage, do not have mature Chinese walls,” Saylor said, referring to a common practice of keeping multiple financial services separate to avoid conflicts of interest. inherent.

From buying the dip to ‘enjoy life’

Saylor himself is suffering when his company borrowed $205 million in March to buy more Bitcoin, pledging part of his existing holdings as collateral, and fears emerged last month that Silvergate Bank would demand more proof that his company was worthy of claim. credit.

Henrich did not ask him about the status of the loan or whether Microstrategy received a margin call from Silvergate.

In August 2020, Saylor turned his business software company into a bet on the Bitcoin futures price and is now facing charges of more than a billion dollars under US accounting rules after the price dropped below $18,000 in the US. last week.

Over the weekend, El Salvador’s President Nayib Bukele appeared to back away from a month-long speech that implicitly urged investors to buy the dip.

This weekend, the first man to make Bitcoin legal tender in his country simply urged enthusiasts to “enjoy life” instead of seeing the value of their investment plummet.

This story was originally featured on Fortune.com

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