The National Law Journal spoke to Partner Michael P. Canty about the challenge of cryptocurrency regulation and the need for risk mitigation.

As regulators and a divided Congress move into 2023, the big question remains how to regulate digital assets without stifling innovation.  How will U.S. Securities and Exchange Commission chair Gary Gensler use his “ammunition” to move forward in light of an “utter failure of corporate controls at every level of an organization,” as John J. Ray III, CEO of FTX Debtors, recently told the House Financial Services Committee.  Ray, who previously handled the restructuring of the Enron bankruptcy case, speaks of “a complete failure of any internal controls or governance whatsoever.”

With a split Congress, finding the right balance between consumer protection without inhibiting blockchain innovation will likely be a challenge.  “We need regulations that don’t stifle innovation of a growth industry,” Canty said.