Watch out cryptocurrency innovators and investors, because regulation might be hitting your neck of the woods very soon if compliance officers get their way of taming the wild west of crypto.
A recent piece at Reuters discussed the growing cryptocurrency exchange industry, where the scope and the profits have been booming since cryptocurrencies such as Bitcoin and the revolutionary technology brought about by the Blockchain came into vogue this decade. This often misunderstood section of the market space has some opposition in the United States, however, with the lead in anti-crypto legislation coming historically from New York City after Senator Chuck Schumer began to target altcoins such as Bitcoin after the black web-based Silk Road drug exchange was uncovered several years back.
The article explains that in “September the New York Attorney General’s Office said several cryptocurrency exchanges faced conflicts of interest, were vulnerable to market manipulation and put customer funds at risk.” Across the pond in the United Kingdom, lawmakers in parliament sought to bring an end to the “wild west” of crypto by enacting legislation domestically while proposing policies to the EU (pre-official Brexit) to bring that part of cyberspace under some form of subordinate to regulators.
The attitude towards regulating crypto is mixed among the major traders and exchanges in the cryptocurrency industry. Reuters states “Some cryptocurrency industry bodies, such as Britain’s CryptoUK, have welcomed calls for regulation, urging a balance between rules to shield consumers and nurturing innovation. Others, like Global Digital Finance, have looked to establish industry-wide international standards.”
Meanwhile in the United States, apart from New York, some states are welcoming crypto-investors and innovators such as Colorado, which just signed the Digital Token Act into law which restricts what the state government can implement on the consumption of altcoins while also setting standards for fair practice regarding traders and speculators in the state. This seems to be the only piece of crypto-focused legislation currently in either North America and Europe which places limits on regulators, and not the other way around.
Regardless as for the the opinions of many experts, what has been universally agreed upon is that more regulation in some shape or form in the near future. “The people that can do that are the ones that have dealt with regulation for highly regulated institutions,” says general counsel for global sales and institutional business at the Huobi, an exchange based in Singapore.
Sources: Reuters, CCN