Under-Regulated Cryptocurrency Era to Come to an End Soon as Regulators Speeden Crypto-Legislation
Although the cryptocurrency industry currently lacks robust regulations, this will quickly change as the industry matures over time. According to an Asia Times article published on October 4, 2018, regulations surrounding cryptocurrencies will grow at a significantly fast rate as regulators attempt to place old frameworks on new and emerging technologies.
Regulations Will Increase As The Industry Grows
Julie Myers Wood, the chief executive officer of Guidepost Solutions, a company that provides global security, investigation, and technology consulting solutions believes that the current under-regulatory period will quickly come to an end as the cryptocurrency industry grows.
A clear example of this growth is the increase in suspicious activities concerning cryptocurrencies. According to the United States Department of the Treasury’s Financial Crime Enforcement Network (FinCEN), there are 1,500 reports lodged on a monthly basis. The large and growing number of suspicious activities is a concerning matter, a pressing issue that regulators need to address.
Although the reports were designed to resolve these problems, cryptocurrencies are new and emerging technologies, which make the reports hard to navigate and decipher. Furthermore, the constantly changing regulations and laws on the cryptocurrency sector make the already tough situation, even harder on regulators, investors, and buyers.
Changing Old Systems For New Technologies
While it’s uncertain what future regulations will look like, the industry may become a safer place for retail investors. Wood believes that many cryptocurrencies, especially those with greater compliance risks will cease to exist in the market, especially when institutional investors join the cryptocurrency industry, and government agencies implement stricter regulations.
Wood noted that when institutional investors enter the market, “some experts have claimed that the currencies will centralize towards a key leader, while others predict that diversity in the market will continue absent systematic market manipulation.”
Regardless of how the cryptocurrency market pans out, the regulatory process of changing old systems for new technology will be a complicated process. There would be a lot of questions concerning crucial definitions, many disagreements and debates, and multiple jurisdictions that will be brought forward in court.
Although it is unclear which countries will be prepared for change when the cryptocurrency industry grows, countries with less-developed regulatory frameworks are at a disadvantage. The U.S. Government will, however, remain a source of guidance for countries around the world.