There is always a choice. The cryptocurrency industry has been built by the community of freedom-loving, tech-savvy people who wanted to make a huge impact on payments since the inception of the banking system. And they nailed it. The implementation of blockchain has made it possible to initiate advances that go even beyond traditional finance, and many global companies are benefiting from it for their operations.
After a decade of development, filled with hope, despair and the emergence of new directions, the world has been divided into two camps. One has always fought for freedom while another was very proud of what has become for some a surveillance regime.
How to acquire the most accurate and truthful assessment? Let’s analyze the pros and cons of regulation to get an overview.
The binary world
In time immemorial, when Bitcoin was a dubious invention, people used thousands of people to buy a a few slices of pizza or even buy a used car, no one thought he could ever grow up in a an industry worth a trillion.
Well, things are different now. Early adopters became billionaires, later ones – millionaires, and even casual investors enjoyed skyrocketing investment returns as even stimulus checks from 2020 made some people rich. And we do know – where the money is, there is fraud and a set of laws to protect people from it.
Last month, when BTC hit its new high, Coinbase CEO Brian Armstrong Told CNBC that regulation is one of the biggest threats to crypto. The CEO of Coinbase explained that with the advent of the Internet, many countries also fear its development and try to control the flow of information. China has gone to great lengths in this regard, always trying to monitor the Internet to the best of its ability.
In fact, cryptocurrencies have spawned a new industry direction in financial markets. In 2017, the capitalization of the global securities market peaked at $ 40 trillion. Thanks to the advent of computers and the Internet, capitalization in this field has increased considerably in 15 years, ie 10 times more!
The rising star of Bitcoin has helped popularize these assets to a large audience. Among the earliest cryptocurrency exchanges was the Kraken exchange, founded in 2011 in San Francisco. Earlier in 2011, Mt. Gox (Mount Gox), a giant player at the time, began operating with a share of almost half of the trading volume in the Bitcoin network. Cryptocurrency exchanges differ in their principles from exchanges, but they have the same essence – to provide services for trading assets.
Today, exchanges are superior to cryptocurrency platforms when it comes to insuring the accounts of investors and brokerage firms. However, compared to the stock market and forex, cryptocurrency exchanges have a clear advantage in the form of data access, high volatility, and easy accessibility to trading. However, as such exchanges are by no means regulated during a deposit, there is a risk of its total loss!
Companies registered in the European Union or the United States provide insurance for customers’ deposits worth tens of thousands of dollars in the event of organization bankruptcy and other unforeseen circumstances. Therefore, the state, not the company, is responsible for the security of funds. Cryptocurrency exchanges cannot offer this until now. Hacker attacks, unscrupulous employees and sweepstakes are issues that have arisen before, and the risk is still great.
There are countless examples of the downfall when it comes to loss financing in crypto. Mount Gox and Quadriga CX are just the tip of this iceberg of fallen investor expectations. At the same time, in the absence of regulations, becoming a customer of such an exchange is possible simply by having only one email. To trade on the stock market or on the forex, you will need to confirm your identity and place of residence by providing several documents. Of course, government regulators must adhere to such procedures, which to some extent creates a disadvantage. The profession of trader is full of risk that a trader tries to minimize losses if trading is his main source of income. Therefore, investors are unlikely to actively invest in a new area before providing collateral.
Volatility is always on the side of cryptocurrencies. Every day new coins appear on the market and experience a level of growth that did not exist at all on the stock exchange or forex. The token market has low liquidity compared to the stock market and forex, where capitalization is measured in the trillions of dollars, which is ten times greater than the capitalization of cryptocurrencies. Consequently, as long as such regulation does not exist in this market, liquidity will therefore be at a low level, which will allow the price to jump sharply.
Stay on the right side
The cryptocurrency industry is booming globally, but acceptance and regulation is different in parts of the world. Why is it crucial for the EU to have regulation for crypto at the supranational level?
It is undeniable that the European Union is very strict and conservative with regard to innovations. Some views, such as those expressed by Eurobank director Christine Lagarde, mentioning that the ECB will not issue a digital euro in less than five years, prove that the state is lagging behind in adoption. of cryptocurrency.
On the other hand, scammers are less likely to have their illicit schemes work and cheat customers. By creating new AMLD frameworks every few years, EU watchdogs aim to make the continent the safest port for digital asset customers.
One of the most successful players in the European league is currently STEX, a fully compliant spot crypto exchange supporting all European AML standards. This platform offers practical solutions and extensive trading pairs to provide an unparalleled trading experience. STEX currently supports over 400 different cryptocurrencies and users can purchase digital assets using Visa and MasterCard and SEPA, Bancontact iDEAL payment systems. The platform operates under the Licence of the Estonian regulator and conform with KYC / AML procedures.
“The world has seen far too many examples of extremely devastating activity on unregulated platforms. The emerging industry needed regulation in order to mature and attract more customers: traditional users as well as financial heavyweights will be more willing to step in knowing their funds and privacy are better protected “, – the CEO and founder of the platforms Vadym Kurylovych commented on the evolution of legal frameworks in the EU.
VK also cautions that due to the fact that many exchanges are in no way regulated when making a deposit, there is a risk of total loss, while there is no insurance.
The latest examples of the obstacles in the crypto world make it perfectly clear that there is less room for cybercriminals in the modern world. The importance of regulation will grow as this activity aims to protect customers from various growing cases of fraud. Everyone wants safety when it comes to the tipping point and there is only one way to get there. Either way, the industry fines have already chosen their way, and no further variations will emerge over time. Do your best for yourself and make the right choice. Stay on the side of the light.