Since the advent of cryptocurrency in 2017, regulators have stepped up their activities in the industry. US governing bodies such as the Securities and Exchange Commission, the Department of Justice, and the Commodity Futures Trading Commission apply different types of law enforcement measures.
As of December 2020, regulatory pressure has intensified, including a proposal by the Financial Crimes Network to strengthen oversight of cryptocurrencies. What are the players in the crypto industry currently thinking about regulation?
Dean Steinbeck, co-founder of Horizen Labs, told Cointelegraph that in fact, in the context of the increased institutional engagement, “communications from organizations such as the SEC, OCC, IRS and FinCEN are becoming more regular.” “In recent months, we continue to see an increase in the institutional adoption of bitcoin / cryptocurrency, but we are gradually closing the educational gap between the traditional and decentralized economies,” he added.
Regulatory water remains cloudy
During 2020, a number of major businesses and individuals, including MicroStrategy, MassMutual, Square and Paul Tudor Jones, announced their major Bitcoin acquisitions. In 2019 and 2020, US regulators stepped up their activities in space in terms of enforcement and visibility.
“However, these notes and rules are complex and unclear, which in turn makes them meaningless and misleading in the eyes of the crypto community,” Steinbeck said, adding:
“What prevents the creation of transparent and fair systems?” Those who draw up these rules do not interact with cryptocurrencies on a daily basis. If we can change the system by which these comments, rules and instructions are created, the community may be more receptive to the proposed rules that are being created. Put it down. ”
A number of regulatory measures have been introduced over the past two years. The Office of the Currency Comptroller has given national banks a clear signal to monitor cryptocurrencies. The IRS has tried to clarify taxes, although the agency’s efforts have caused confusion in the process. The tax authorities have also added digital asset ownership to their tax reporting forms.
Recently, the CFTC and DoJ pursued BitMEX to exchange cryptocurrencies, the Securities and Exchange Commission (SEC) filed a lawsuit against Ripple and demanded XRP assets as collateral, and FinCEN proposed a rule to track the flow of money into self-funded cryptocurrencies. … Between platforms.
“We’ve come a long way as an industry, but similarly, we’re just getting started,” said Konstantin Richter, founder and CEO of Blockdaemon, when asked about his thoughts on the current crypto regulatory landscape. “Over the past year, cryptocurrencies seem to be developing faster and asking better questions, rather than simple questions in and of themselves.”
Richter noted that there is now an opportunity to send governing bodies to familiarize themselves with the industry. he added:
“I think that in general we can do our best to encourage regulators and educate them on how best to engage in innovation in the cryptocurrency industry as a whole, and to adopt the many guarantees and standards necessary to continue institutional and regular adoption. . ”
In terms of educated government, the election of President Joe Biden as SEC Chairman Gary Gensler is likely to bring tremendous knowledge of crypto to the office. Gensler taught a course on cryptography and blockchain at the Massachusetts Institute of Technology at the Sloan School of Management. Recent reports from Cointelegraph show that Gensler is well versed in the industry.
Digital property regulation is not someone else’s concept
“Cryptocurrency regulation has always been an important issue as news or even rumors have led to large price swings in the past,” Philip Salter, head of Genesis Mining, told Cointelegraph.
Regulation has increased along with the rise of cryptocurrency as an asset class. Part of the way out of the gray regulatory zone could include government agencies commenting on the sector. For example, industry players recently inundated FinCEN with comments about cryptographic rules proposed by the board of directors.
“We’ve seen much more open and knowledgeable discussions about cryptocurrency regulation lately,” Salter said. “It looks like a big new topic will be the question of whether KYC is needed for personal wallets and coins,” he explained, adding:
“It would have serious consequences and possibly lead to some panic if it were adopted in the US. Overall, I think it’s best not to worry too much about short-term rumors and rules, but instead take a step back and admit that it will take years. The final result of cryptocurrency regulation. We are talking about an economic revolution, and there will certainly be conflicts. “