Retail investors are highly reliant on markets that have been unable to participate in digital asset exchanges in the United States because there has historically been a lack of regulatory safeguards. Retail investors are regular people who want to have a chance to gain from the market. Dan Schatt and Domenic Carosa, co-founders of Earnity, warn the crypto community must accept the SEC’s regulatory framework to advance its sector into conventional financial institutions as the floodgates to these ordinary investors begin to open.
Crypto purists don’t like the idea that ordinary investors, or those the SEC considers less financially competent, deserve additional government protection. They claim that the policy creates an unequal power dynamic in which only the bigwigs may trade, making it all but impossible for the average person to get a foot in the digital marketplace. The whole point of cryptocurrency is to avoid this exact situation.
While the purist viewpoint is correct in emphasizing the importance of the retail investor, it ignores the risks an investor faces without regulatory protection, as evidenced by the unusually high number of ICO scams, “pump and dumps,” and other unregulated events that occurred during the 2017–2019 ICO market boom.
The United States needed a cohesive regulatory framework before it could open the doors of digital asset trading to the world’s average students, teachers, and engineers. Earnity founders Dan Schatt and Domenic Carosa feel that these regulations are intended to protect vulnerable investors.
The ideas that crypto purists hold are noble, and they have proved to spark innovation that will serve as the foundation for global financial enlightenment for many years to come. However, once principles leave the pages of textbooks and whitepapers, they must adjust to their new surroundings: the actual world. Crypto purists must move beyond their ideological purity, just as President Bush acknowledged the limitations of his favorite supply-side economics. The crypto business will only grow until they give up their struggle with the SEC, and when they do, the world of finance will be irrevocably changed.