Sunday, December 26, 2021

Erik Voorhees Criticizes Crypto Exchange Gemini’s Pro-KYC and Rules Ad

Gemini, a major crypto exchange based in New York, has received mixed reviews of its advertisements spread across the city.

On January 4, a former Coinbase employee and cryptocurrency enthusiast Nick Foley released a photograph of Gemini’s advertisement placed on East 46 Street in Brooklyn, New York, which read “Crypto Needs Rules.”

Erik Voorhees Not Happy, Crypto Doesn’t Need Rules

The advertisement was criticized by ShapeShift founder and CEO Erik Voorhees, who stated that cryptocurrency trading platforms do not need to abide by more rules to function efficiently and securely.

Voorhees argued that crypto in itself is already governed by a set of rules implemented by an open-source community of developers, miners, node operators, and users and that no additional policies are required to govern it.

Erik Voorhees Criticizes Crypto Exchange Gemini’s Pro-KYC and Rules Ad

“Hey, Gemini… crypto has lots of rules already. Crypto is the rule. These rules are stricter than any political inscriptions; they are objective, open, and knowable to all parties, they transcend borders, and they are enforced by mathematics. Crypto is a system of laws and not men,” noted Voorhees.

As a paper from the central bank of Finland explained in July 2017, Bitcoin cannot and does not need to be regulated because it is run by a protocol with rules enforced by mathematics.

Most decentralized cryptocurrencies, including Bitcoin, have strict rules that prohibit bad actors from negatively affecting the ecosystem and prevent the centralization of authority within the open-source ecosystem.

Erik Voorhees Criticizes Crypto Exchange Gemini’s Pro-KYC and Rules Ad

Economists at the Bank of Finland said that considering Bitcoin is a monopoly run by a protocol; it does not need rules or policies enforced by the government or central entities. Data is processed, oftentimes in the form of a transaction or a payment, in a peer-to-peer manner through miners and node operators.

“Bitcoin is not regulated. It cannot be regulated. There is no need to regulate it because, as a system, it is committed to the protocol as is, and the transaction fees it charges the users are determined by the users independently of the miners’ efforts. Bitcoin’s design as an economic system is revolutionary and, therefore, would merit an economist’s attention and scrutiny even if it had not been functional. Its apparent functionality and usefulness should further encourage economists to study this marvelous structure,” the paper read.

Where Gemini Gets it Wrong

Gemini, as one of the most strictly regulated cryptocurrency exchanges in the global market, has made significant progress in improving the infrastructure supporting crypto assets and educating regulators, especially in the U.S.

Erik Voorhees Criticizes Crypto Exchange Gemini’s Pro-KYC and Rules Ad

With the G20 calling for the regulation of the cryptocurrency sector, in the long run, cryptocurrency exchanges will likely be subject to additional policies and tightened regulatory frameworks, regulated in a similar way to banks.

But, cryptocurrency like Bitcoin is not in need of more rules outside of the policies integrated into the decentralized protocol because it has successfully operated for over ten years since 2009.

Businesses that support and integrate Bitcoin may be required by the government to comply with newly approved laws in the long-term, like the new bi-partisan cryptocurrency legislation that is currently being prepared.

“Rules for trading on a platform should be…. up to the platform. If you don’t like the particular rules of a platform, go to someone else. And again, if there’s a fraud, that’s already illegal and doesn’t require some new law,” Voorhees added.

Many investors in the cryptocurrency community have also responded positively to its other advertisements placed in New York subways and taxis, stating that the increase in awareness of leading cryptocurrency trading platforms or fiat on-ramps is crucial for the mainstream adoption of crypto.

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