After the explosive growth of cryptocurrency in 2017, regulators have increased their activity in the industry. US governing bodies such as the Securities and Exchange Commission, the Department of Justice, and the Commodity Futures Trading Commission use different types of enforcement.
Since December 2020, there have been larger regulations, including a proposal from the Financial Crimes Network to tighten oversight of portfolios. What are the players in the crypto industry currently thinking about regulation?
Dean Steinbeck, co-founder of Horizen Labs, told Cointelegraph that in fact, due to increased corporate commitment, “advertisements from organizations like the SEC, OCC, IRS and FinCEN are becoming more regular.” “In recent months, we have continued to see the growth of institutional adoption of bitcoin / cryptocurrency, and slowly but surely bridge the educational gap between conventional and decentralized financing,” he added.
The water regulation is still cloudy
During 2020, several of the largest companies and individuals, including MicroStrategy, MassMutual, Square and Paul Tudor Jones, announced their major purchases of Bitcoin. In 2019 and 2020, US regulators have increased their activity in this area, in terms of compliance and visibility.
“However, these notes and rules are often confusing and vague, which in turn make them meaningless and wrong in the eyes of the crypto community,” Steinbeck said, adding:
“What hinders the creation of transparent and fair systems? Those who set these rules do not interact with cryptocurrencies on a daily basis. If we can change the system in which these alerts, rules, and policies are created, then society may be more receptive to the introduction of the proposed rules.”
A number of regulatory measures have been taken in the past two years. The Foreign Exchange Office gave the green light to national banks to store cryptocurrency. Tax authorities have attempted to clarify the tax problem, although the agency’s efforts have added confusion to the process. Tax authorities have also added the issue of digital asset ownership into tax reporting forms.
Recently, CFTC and DoJ pursued the exchange of BitMEX derivatives, the SEC filed a lawsuit against Ripple, claiming that the XRP asset is safe, and FinCEN proposed a rule to track the flow of funds into self-stored cryptocurrencies between platforms.
“We’ve come a long way as an industry, but we’re just starting out in that spirit,” Konstantin Richter, founder and CEO of Blockdaemon, told Cointelegraph when asked about his thoughts on cryptocurrency today, adding, “Last year, it seems like crypto regulators are moving faster and demanding quality Better rather than simple questions themselves. ”
Richter noted the current opportunity to direct governing bodies in the study of industry. he added:
“I believe we are all able to do our best to encourage and inform regulators in the best way for them to collaborate in innovation with the cryptocurrency industry as a whole, as well as provide additional security measures and standards necessary to continue corporate activities. And at scale.”
In terms of educated government, the election of President Joe Biden as Chairman of the Securities and Exchange Commission, Gary Gensler, will likely bring a broad knowledge of cryptography to his position. Gensler taught a course on cryptocurrency and blockchain at the Massachusetts Institute of Technology’s Sloan School of Management. Recent reports from Cointelegraph show that Gensler has extensive knowledge of the industry.
Regulating digital property is not someone else’s concept
“Cryptocurrency regulation has always been an important topic because past news or even rumors have caused large fluctuations in prices,” Philip Salter, head of mining division at Genesis Mining, told Cointelegraph.
Regulations have intensified with the increase in cryptocurrency as an asset class. Part of the way out of the gray regulatory zone may involve sending comments from government agencies. For example, players in the industry recently flooded FinCEN with comments about the regulator’s proposed crypto regulation.
“Recently, we have seen a more open and informed debate about cryptocurrency regulation,” Salter said. “It seems like an important new topic is whether KYC is required for personal wallets and coins,” he explained, adding:
“It will have dire consequences and possibly cause panic if it is adopted in the US I think generally it is better not to worry too much about short-term rumors and rules, but instead, take a step back and admit that it will take years for us to reach a final conclusion about currency regulation.