KPMG Canada favours new securities law for crypto

KPMG Canada’s director and co-leader of crypto assets and blockchain, Kunal Bhasin, has said in a recent interview with Kitco that he believes that the Howey Test might not be the right rule with which to decide whether a cryptocurrency was a security or not.

Bhasin spoke to Kitco on the sidelines of the Blockchain Futurist Conference in Toronto. He said that in his view, the crypto market correction was very necessary in order to flush out bad actors, and that it would gain maturity as a consequence.

Moves into crypto

The KPMG director explained why the company had taken what for it was a rather unusual measure, of adding bitcoin and ethereum to its corporate treasury:

“We added Bitcoin and Ether to our treasury because we wanted to be part of the community. We wanted to show the crypto community that we have skin in the game. Our leadership believes in the technology and all transformative ways it can be used in the community. KPMG is traditionally not in the business of investing in assets. This is probably the first time that something like this would’ve happened.”

The company even went to the extreme of purchasing digital art from the World of Women collection of NFTs. Bhasin said:

“The reason why we bought the WoW NFT is that we need a lot more women in crypto and women in tech in general. I feel the crypto industry could use a lot of that majority and sensibility that comes with a lot more women in the space and how they could contribute,”

Regulation

Bhasin gave the view that regulators in different countries should be learning from each other. One example is the spot crypto ETF that has been operating for the last two years. He said that the US could learn from its counterparts in Canada about it.

In relation to the current SEC regulatory spats with certain crypto companies over whether their token constitutes a security, Bhasin was doubtful as to whether the Howey Test was up to the job, saying:

“We need a new framework to assess these assets and not try to retrofit a test adopted when digital assets weren’t even a thing,” 

Future adoption

The KPMG Canada director was bullish on new institutional entrants into the crypto space, stating:

“Those institutions that have been looking to get into the space have been doing due diligence and research for several months or years. For many, the decision-making would not depend on where the market is. But for some, this is an opportunity because of where the prices are. If they didn’t want to come in when Bitcoin was at $60,000, the current $20,000-$24,000 range could be a good time for them to come in,”

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.