Waves founder proposes crypto regulations to control market manipulation
As the crypto market has faced a prolonged winter and the Fed adds fuel to the fire with its hawkish approach to fight inflation and protect users, global tech tycoons and industry experts have voiced their opinions on the situation.
Similarly, Sasha Ivanov, founder of Wave, a blockchain company that allows users to launch custom tokens, said in an interview that governments need to regulate the crypto industry to deal with market manipulation and prevent investors from rowdy projects.
Related reading: Why Japan could ease crypto regulations to revitalize economy
The CEO had a public spat with FTX founder Sam Bankman-Fried earlier, and he accused him of illegally manipulating the prices of his project, WAVES. In response to the interviewer’s question about how the problem was solved, Ivanov noted;
“Crypto market manipulation is a sign of the times; as much as we in space wish it weren’t, it’s still there. People with large balances and high intelligence levels can profit at the expense of retail traders. Our resolution is regulation, which is on its way. In the meantime, we have been working on our own solutions, such as the upcoming launch of PowerDAO to help us regulate our own ecosystem.”
The WAVES-backed stablecoin USDN lost its peg to the US dollar many times in 2022. Finally, it failed to defend its peg to the US dollar and fell to $0.90 on August 26.
While talking about how he solved the problem and took control of the situation in April when USDN’s value plunged to $0.80, Ivanov explained that April’s dumping happened because the six whale accounts borrowed Vires Finance’s liquidity too much. As the interest rate continued to rise, it became impossible for surrendered whales to repay the loan. As a result, it disrupted the prices of every cryptocurrency and probably of WAVES. He further added;
“This is when I had to step in to take about $500 million worth of this bad debt into my own wallet to gradually repay it. If you didn’t, those accounts would be liquidated, creating more selling pressure due to the amount of USDN being sold.”
Ivanov points Crypto regulation as the only way to protect users
Waves’ CEO has expressed his concerns over the Tornado cash ban, which has put stablecoins like USDC and USDN under the radar, pointing to the regulation to maintain transparency and ensure user protection. He said;
“Although this may not be the most popular opinion, I believe we need regulation to protect users. As such, we are certainly positive to find some real and effective solutions through intelligent conversations with regulators. That said, we must respect the values of immutability, resistance to censorship and decentralization when we regulate – there has to be some agreement here or the core values of crypto will be compromised.”
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Alongside supporting the vision of regulation, Ivanov also criticized the regulator’s move to place a blanket ban on Tornado cash and arrest the developer. He pointed out that the government abused its enforcement actions in this case and said that it is like giving jail time to the inventor of a knife because he created it and criminals used it is his fault.
Featured image from Pixabay and chart from TradingView.com
