The cryptocurrency industry appears to have a narrative problem. The story it tells is about speed, innovation and a financial system rebuilt from scratch, but it hasn’t figured out what happens when an ordinary person makes an ordinary mistake and there’s no one to call. Andrew Balthazor, associate and co-lead of the crypto asset disputes team at Holland & Knight LLP, argued on the From the Block podcast that the gap between digital assets and the mainstream lies in people and protections, not just technology.
He described a scenario where a user types a wrong destination address and sends a payment stablecoin to an inaccessible wallet—no scam, just a typo with money gone and limited recourse. The GENIUS Act requires issuers to freeze tokens, but freezing is not the same as fixing, and there is no clear remedy for misdirected transfers under the act. GENIUS is a start but narrowly defined, covering only payment stablecoins and leaving the majority of crypto assets outside its scope, creating regulatory uncertainty for institutions. Firms should become conversant, designate people internally to learn the space well, watch what peers are doing and explore pilots as rules crystallize.
The yield question is a design problem that thoughtful regulation could help solve, with criteria and disclosures that give consumers clarity on what they’re holding and perhaps provisions that push traditional financial institutions to sharpen their own competitive offers. Many crypto companies remain on the sidelines, worried about the durability of future rules and potential shifts in policy with changing administrations. If lawmakers want a viable path forward, they should engage a broad set of stakeholders and craft even-handed legislation, since enforcement actions and formal rulemaking provide clarity in different ways.
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