Why the cryptocurrency industry needs regulation to achieve broader adoption

Regulation is always an intriguing topic in the cryptocurrency world. Many people don’t see the benefit of applying strict rules to a decentralized form of money. Some recent incidents in the industry confirm there is a need for some protection and intervention, however. 

The recent BitMEX kerfuffle

People who have followed the cryptocurrency industry for some time will recall the recent incidents involving BitMEX. Despite being a popular futures trading platform for Bitcoin, its founders have been in the US government’s crosshairs. One of its founders, Ben Delo, surrendered to US authorities on March 16, 2021. Delo currently faces charges of violating the Bank Secrecy Act. Although Delo was released on a $20 million bail bond, this may only be the beginning of what shapes up to be a lengthy investigation. 

Along with BitMEX co-founders Arthur Hayes and Samuel Reed, Delo is part of an investigation by the US Department of Justice and Commodity Futures Trading Commission. Current regulatory measures force financial institutions to provide documentation for all transactions above $10,000 in value to prevent money laundering activities. According to the charges, BitMEX’s co-founders have violated this requirement, although the investigation is still ongoing. 

One lesson to learn from this incident is how there needs to be a certain degree of regulation in the cryptocurrency industry. Companies willingly ignoring these requirements will run into trouble sooner or later. Rather than oppose these strict requirements, all trading platforms and exchanges need to comply with the guidelines. Some crypto companies are more forward-thinking in this regard than others.

The benefits of crypto regulation

Exchanges need to provide onramps for fiat currencies to make cryptocurrencies as appealing and accessible as possible. Doing so requires complying with regulatory measures, as it is impossible to perform these tasks without adhering to strict rules. Having the ability to convert between fiat currency and cryptocurrencies will allow for much broader adoption of crypto-assets in the future.

As is to be expected, these on-ramps are regulated by governments and financial institutions. While there is no unified guideline worldwide, rules and requirements are being updated to accommodate the cryptocurrency industry. Providers of on-ramps need to remain ahead of these changes by implementing Know-Your-Customer and Anti-Money Laundering policies and updating those accordingly. Any cryptocurrency exchange or OTC provider benefits from focusing on this aspect, as maintaining a healthy relationship with regulators and policymakers will prove essential in the long run. 

The CoinZoom example

Speaking of a cryptocurrency company paying extra attention to regulations and guidelines, CoinZoom sets a notable example. As a B2C and B2B brokerage firm with a strong focus on digital assets, the company prioritizes compliance with regulatory guidelines. Doing so allows coinZoom to position itself as an institutional-grade digital currency trading platform currently pursuing a BitLicense. Assuming their request gets approved, they will be the third US exchange to acquire this crucial license.

Furthermore, CoinZoom is a registered exchange in the US with Money Services Business license across all 50 states and territories. As a Money Transmitter, the company can operate in 48 states. Internationally, the firm holds a Digital Currency Exchange registration license in Australia and aims to acquire its E-Money License in the European Union. 

Focusing on the regulatory requirements allows CoinZoom to offer services other providers cannot. Its Visa card supports top digital currency pairs for buying, selling, and trading in the United States. Additionally, the ZoomMe peer-to-peer remittance solution lets users send USD or crypto internationally to their friends and family at no extra cost. 

Closing thoughts

As more international players begin paying attention to Bitcoin and other cryptocurrencies, they will flock to companies capable of providing the best service package. Regulatory compliance will play a big role in this process, as institutional clients are less likely to trust platforms not meeting their standards or expectations. 

Despite exchanges and trading platforms popping up worldwide,  there will always be a difference between compliant and non-compliant platforms. Achieving regulatory compliance will provide a competitive edge to the companies pursuing this option and acquiring the necessary licenses. CoinZoom is on the same playing level as Kraken, Coinbase, and Gemini in this regard. 

Der Beitrag Why the cryptocurrency industry needs regulation to achieve broader adoption erschien zuerst auf Crypto News Flash.

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