The regularization of cryptocurrency will not be long

As the global craze for cryptocurrency flourishes and ICOs shift at a relatively rapid pace, it is inevitable that government regulators around the world will begin to feel the need for a closer look at what has happened. been so far a commercial environment. In addition, financial institutions continue to think about the most lucrative ways in which they can take advantage of what was once a community initiative, but their own internal regulatory services recommend caution until the asset environment is better monitored.

On the one hand, this is good news because it means governments, central banks and institutional investors are finally taking digital currencies seriously. On the other hand, regulatory initiatives generally mean that investors may need protection.

Indeed, it is possible that new legislation will soon be introduced in Europe and the United Kingdom to combat criminal activities surrounding trade and increase transparency by aligning digital currencies with existing legislation on tax evasion, money laundering and counter-terrorism financing. The changes could include forcing traders to disclose their identities and requiring cryptocurrency exchanges to perform due diligence on customers and report suspicious transactions.

South Korea's recent regulatory announcements, which would have said that stock market closures are possible, have had a strong negative effect on Bitcoin. This news lowered the price of the BTC on December 28th.

According to Australian daily Sydney Morning Herald, crypto investors claim that some major Australian banks, including National Australia Bank, ANZ and Westpac, are freezing customer accounts and transfers to four different Bitcoin exchanges: CoinJar, CoinSpot, CoinBase and BTC Markets. In response, CoinSpot announced "a temporary restriction on all forms of Australian dollar deposits".

Massive disruption of crypto-currencies

The International Monetary Fund (IMF), headquartered in Washington DC, is composed of "189 countries working for global monetary cooperation [to ensure financial stability"]. IMF Managing Director Christine Lagarde has recognized the growing popularity of cryptocurrencies and the dangerous situation in the stock markets. She warned that "we are about to experience massive disruption" related to this new financial technology. Some crypto enthusiasts believe that any attempt to crack down on digital currencies is simply an effort to protect the big banks.

Susan Zhou, COO and co-founder of Qlink, the decentralized telecommunications network, explains that digital currencies and their individual ecosystems are still in their initial exploration phase:

"We have seen highs and lows in 2017, and we expect 2018 to see a healthy and sound development. Regulation is one of the aspects that is forming and maturing with industry, while the use of crypto currency is clarifying, a consensus on regulation will also be in place. "

Some countries, such as the Republic of Belarus (formerly known as Byelorussia), favor the adaptation of digital currencies and prefer to encourage the development and use of assets in Eastern European countries. Belarus has recently passed laws offering significant tax incentives to blockchain and crypto businesses.

Zhou's answer:

"Some relatively small regulations in some jurisdictions undoubtedly protect investors, but at the same time they have missed the opportunity to lead the growth of the industry. As a double-edged sword, the relevant benefits during the next wave of technological evolution have disappeared.

2018 will be the year to align industry, the best projects will remain with strong capital and talent support, and at the same time, will provide examples of best compliance practices. "

Sergei Vasin, COO of Blackmoon Crypto, part of Blackmoon Financial Group, explains that cryptocurrency investments do not differ much from those of other asset classes. Crypto investment requires due diligence on the part of the investor, the bidder and the organizations responsible for monitoring. Similarly, coherence and clearly articulated policies are a necessity. He says :

"Admittedly, investors should watch the regulation and in particular taxation. When buying tokens that appear to be securities, investors should diligently check whether the team behind this token has taken the necessary steps to ensure legal compliance. Of course, diversification is a must. And for those looking to invest in traditional assets via crypto, the legal compliance argument mentioned above is of paramount importance. Few teams give due attention to this problem because of its complexity, but this effort is worth undertaking. "

The most notable announcement to date on digital currencies and OICs came last July from the United States, when the Securities and Exchange Commission (SEC) investigated the "Wild West" environment surrounding sales. and the crypto trade. At that time, they cautioned that virtual tokens are subject to federal securities laws.

Trace Schmeltz, a partner at the Barnes & Thornburg law firm, points out that the three major US financial regulators - the SEC, the Commodity Futures Trading Commission and the Financial Crimes Enforcement Network, part of the Treasury Department - have defined their territory of cryptocurrency in 2017:

"By 2018, we can expect each of them to define the parameters of their respective jurisdictions with a larger number of enforcement measures. For cryptocurrency issuers or fund managers, this activity will require time and money. In the rest of the world, 2018 will see a significant and ongoing challenge from many national governments in the face of cryptocurrencies. Whether due to concerns about fraud or simply to control capital, these government cryptocurrency challenges will grow stronger. "

In 2017, other countries have also begun to take a closer look at crypto trading and / or regulation including China, Russia and, more recently, Israel. Of course, nobody really knows what is waiting for this asset class in 2018. But as the frenzy of interest and adaptation grows, know that regulators could - and probably will - crack down on assets digital, creating additional volatility.