Galaxy Digital CEO Michael Novogratz called the lack of clarity on U.S. crypto regulation a “very nasty” political game, but didn’t see it as a permanent setback.
The cryptocurrency-focused company recorded a net profit of $134 million in the first quarter, even as the country’s policymakers and regulators remain underwhelming on the front.
Novogratz said during the company’s first-quarter earnings call on Tuesday that the U.S. needs a stablecoin bill, such as noting “national strategic interests.”
But a bill related to a dollar-pegged cryptocurrency may not pass, the Galaxy chief said, adding that Democrats were still “in shock” after the collapse of cryptocurrency exchange electronic FTX last November.
“I’ve met a lot of politicians in the past six weeks, and the advice from the smartest of them is that it will take a while for the stench to go away and for the wounds to heal.”
Meanwhile, Europe is preparing to implement a regulatory framework Market for Cryptoassets (MiCA) next year.
Galaxy has partnered with DWS – a group of funds based in Germany that managed 821 billion euros ($910 billion) in assets as of Dec. 31 – brought the ETP to European investors last month.
The CEO said that while some “innovation” and trading activity may move offshore, he expects the U.S. to gain cryptocurrency regulation in the long run.
Meanwhile, the SEC has taken enforcement action against companies in the division.
Speaking about clear regulation of cryptocurrencies in the U.S., Novogtratz shared:
“It’s probably going to be a couple of years. It might take a new SEC chair, and it’s going to take someone who is pro, not nay. I think it’s going to set us back, but I don’t think it’s going to be a permanent setback.”
Galaxy’s first-quarter net income was $134 million, breaking a net loss of $288 million in the final three months of 2022.
Gains were driven by digital asset gains and unrealized investment returns, according to the company’s stake.
Bitcoin and ether are up about 65% and 53%, respectively, so far this year.
Galaxy’s commerce business generated about $130 million in revenue in the first three months of 2023 — a 257% increase from the previous quarter, largely driven by net profits from digital assets and derivatives.
Novogratz said on Tuesday’s conference call that he expects the commercial business to be the company’s main earnings driver through 2023.
- Is it time to say no to AI?
- Galaxy Digital: Bitcoin NFTs have the potential to reach $4.5 billion by 2025
According to Blockworks