Regulatory Battleground: Every Authority Wants a Piece of the Crypto Pie
Just about everything tends to move at lightning speed in the world of cryptocurrency. Coin valuations rise and fall as whimsically as breezes change their direction; new coins are born and others die nearly every day. Stories of huge fortunes made and destroyed in the cryptosphere are practically commonplace.
Therefore, it’s not surprising that the cryptosphere has been difficult to regulate. For one thing, democratic governments around the world are designed to have due process–in other words, things take time. For some regulators, this has been a frustrating factor; citizens have gone without protections, and governments haven’t been able to efficiently collect taxes on revenues made from ICOs or crypto trading.
Some governments have gone the way of the iron fist–in a sweeping set of bans starting in Q3 of last year, China ultimately outlawed both the practice of holding ICOs and domestic cryptocurrency exchanges. Other countries, like the United States, have taken a rather slow-and-steady approach toward crypto regulation–perhaps, until now.
Crypto Confusion: Regulation From All Angles Leaves Some Things Unclear
Over the past several weeks, various branches of the United States federal government have begun to take increasingly public actions regarding the regulation of cryptocurrencies. However, a lack of coordination amongst these various branches has left industry participants scratching their heads, as Managing Partner at MultiCoinCap Kyle Samani pointed out on Twitter:
David Woliner explained that on a global scale, the “short term” of regulatory action surrounding cryptocurrency is likely to focus on enforcement, “especially with regards to ICOs.”
This is because “some of the practices in the ICO world are such that regulators cannot disregard and require immediate action. This will likely affect the number of ICOs conducted, but not necessarily the amounts raised through ICOs. It is all about acknowledging that there are some basic rules you must adhere to.”
In a longer-term sense, however, “we will see, hopefully, a mature industry evolving within the regulatory frameworks which will be tailored and applied to its characteristics, resulting from the sandbox programs launched by many regulators around the world.”
“Regulators are likely to mature and evolve alongside the industry, but a keystone to achieving that is through a constant and open-minded dialogue between regulators and industry players,” Woliner added.
Regulation Has the Power to Strengthen and Legitimize the Cryptocurrency Industry
Despite the impending difficulty for industry participants that may come as a result of new regulations on cryptocurrency inside and outside of the United States, the industry could stand to be improved by a healthy set of regulations.
This is evident in Japan’s Virtual Currency Act, a piece of legislation that legitimized Bitcoin and Ethereum as legal forms of payment in April last year. Many credit the VCA with much of the astronomical rise of both coins throughout May and June of 2017 (and beyond.)
Indeed, Commodity Futures Trading Commissioner Brian Quintenz told CNBC’s ‘Closing Bell’ that “regulation can add to credibility.”
“I think the participants in this market want a credible marketplace,” he added.
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