Michael Saylor: Many cryptocurrencies are “unregistered securities” and need regulation

Microstrategy CEO Michael Saylor has called on regulators to regulate the chaotic crypto market, saying many of the cryptocurrencies in the industry are “unregistered securities” and that immature, high-risk practices or “horrific practices” by some practitioners have dragged down the Bitcoin price.

Michael Saylor: Many cryptocurrencies are "unregistered securities" and need regulation

Speaking on a recent podcast with NorthmanTrader founder Sven Henrich, Saylor said that Bitcoin is caught in the “crossfire” of the collapsing crypto market, as it often serves as collateral for some altcoin margin loans. He believes that many of the cryptocurrencies currently in circulation must be considered “unregistered securities” and not be confused with commodities like bitcoin.

Saylor criticized unregulated banks and investment firms that traded unregistered securities akin to Wildcat banking in the United States from 1837-1865, when some of the nation’s emerging banks were chartered only by state law, without any federal supervision, this period is also known as the era of free banking.

Saylor argues that such a “wildcat” business is a “liability” to Bitcoin, and that ordinary cryptocurrencies and Bitcoin cannot be used interchangeably because they are two completely different things.

“What you’re looking at is a $400 billion mess of opaque, unregistered securities transactions, not fully and fairly disclosed, and they’re all cross-collateralized with bitcoin,” he said. Pretty much everything else is the exact opposite”.

Because many altcoins are unregistered securities, many traditional mainstream investors are reluctant to dabble in bitcoin, the MicroStrategy boss said.

Saylor urged the U.S. Securities and Exchange Commission (SEC) to keep records on which specific cryptocurrencies qualify as commodities in order to distinguish them from a plethora of unregistered securities. Saylor also lashed out at Tether (USDT), claiming it is an unregistered security “without any transparency.” He warned that the “never-ending Tether FUD” (fear, doubt, uncertainty) sentiment over whether it was truly solvent would not stop.

Bittweet previously reported that Saylor made his first foray into bitcoin in 2020 when he decided to start adding bitcoin to MicroStrategy’s balance sheet as part of a financial management strategy. As of March 31, MicroStrategy held 129,218 bitcoins at an average price of $30,700 per bitcoin, according to a public company filing.

Michael Saylor: Many cryptocurrencies are "unregistered securities" and need regulation

Bittui terminal data shows that as of press time, Bitcoin is trading at $20,173, and MicroStrategy’s total holdings are worth about $2.6 billion. This means that the company’s unrealized losses on Bitcoin holdings have exceeded $1.3 billion.

Investors fear the company will face what’s known as a “margin call,” in which more money must be invested to avoid increased trading losses from borrowed cash. In response, Saylor tweeted to reassure the market: “When MicroStrategy adopts a Bitcoin strategy, it has forecast volatility and structured its balance sheet so that it can continue to HODL (hold long) through adversity”.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/michael-saylor-many-cryptocurrencies-are-unregistered-securities-and-need-regulation/
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