It appears cryptocurrency regulation is a lot closer than we think.
Will New Regulation Hit Us Soon?
According to a new report issued by cybersecurity firm Cipher Trace, the end of March 2019 brings about a whole new era for crypto. The report says that we can expect to see waves of new regulation hitting the arena before we even realize they’re here.
Dave Javans, the CEO of Cipher Trace, comments that cryptocurrency-based fraud, theft and other malicious activity is at an all-time high. The report details several cases of such fraud and theft occurring in just the first quarter of 2019 alone, all which account for more than $1 billion in total losses.
Discussing the report, Jevans explains:
Although this report punctuates some of the negative occurrences within the crypto ecosystem, it is important to view these illuminations as markers for improvement. This is the wake-up call crypto needs. Cryptocurrency is maturing, and that means having a few growing pains. Once we identify problems, we can find solutions. Cryptocurrency projects must grow up before they can move forward.
One of the biggest problems with the crypto industry as of late is the fact that it remains largely unmonitored. While the space has grown exponentially over the past few years, many legislators have been reluctant to view the space as legitimate. Users are subject to some rules, but there’s a lot of room for improvement, and many serious regulations one might find in the traditional financial arena cannot be found in the crypto industry.
This has proven to be troublesome for individuals such as institutional investors, many of whom have been reluctant to invest in the space out of fear that they could lose their funds just as easily as they invest them. If the space is still vulnerable to occurrences like Mt. Gox in 2014 and Coincheck in 2018, that’s a scary thought for both standard and professional investors alike.
The fact is that more rules are needed, but what kinds of rules can we expect, and when will they arrive? Jevans isn’t quite sure of what or when major change will occur, but he’s confident the time is closer than we’re anticipating.
So Many Problems to Fix
Many of the issues we’re noticing in the crypto world center around money-laundering techniques, according to Jevans. He says that several “new and innovative” schemes have emerged over just the last year alone that have allowed illicit members of the space to wash their funds clean through other enterprises. This, he says, has kept many regulators on edge and in need of creating new legislation designed to protect the space and its users.
One of the biggest “holes” in the regulation game, he states, is that when crypto transfers occur between U.S.-based wallets and exchanges and international platforms, the transfers fall “off the radar,” meaning that they cannot be seen or examined by lawmakers.