The crypto world is currently freaking out as usual over a set of recently stated new guidelines by the Securities and Exchange Commission that will require cryptocurrency exchanges to register with the SEC. The recent statement made by the SEC appears to further mark crptocurrencies as a security in many instances, and also cautions crypto investors to only do business with exchanges that are registered, as to avoid the potential for fraud.
In light of the recent updates from the SEO, the wider crypto markets dropped, with Bitcoin losing 10% after the news was first published. But crypto investors shouldn't freak out over the news, as the SEC and U.S government have so far not made any signal that they intend to stamp out cryptocurrencies in the same fashion some foreign nations already have.
Its true that tightened regulations that label crypto a security do put up more red tape for exchanges, but the added regulations by the SEC only appear to be intended to stamp out the rampant fraud seen with fake ICO's.
The SEC's biggest concern appears to be crypto-traders calling themselves an "Exchange", in which the SEC states creates confusion as some investors assume these are legally registered entities, when often they are not.
What isn't clearly being stated by the SEC are what those guidelines for exchanges will entail. Part of the concern with crypto investors appears to be centered upon the possible requirements of the SEC and other foreign government financial watch dogs to de-anonymize crypto's like Bitcoin. Many are concerned that requiring investors to disclose their personal information to exchanges could have a negative effect on market prices.
The SEC states that any platform that trades securities and operates as an exchange, must register as a national securities exchange, otherwise receive an exemption. That being said, even those who are given a pass for exemption will still technically be required to register initially.
Other issues that appear to be having an impact on the current crypto market and Bitcoin have to do with potential phishing attacks on certain exchanges, such as the one noted by Binance. Although, it appears the attack was caught quickly and the damage appears to be fairly minimal.
It's true that bad actors in the crypt space have have made every effort to capitalize on would be investors with bogus coin offerings, and other sham crypto investments. As an example, we've banned over 500+ users for posting potentially fake ICO related posts in our Bitcoin and Cryptocurrency community on Google+ in less than 2 months.
Some were removed for making outright advertisements, which violates our guidelines. Others were removed after reviewing the claims being made. Moving forward, we're now actively working to stamp out potential fraud by requiring the marketers of ICO's to disclose additional information to be reviewed by us before allowing them to further promote their crypto related products and services.
More info from the SEC itself: Statement on Potentially Unlawful Online Platforms for Trading Digital Assets
More news from CNBC: Bitcoin just tanked below $10,000 after SEC says crypto exchanges must register with agency
Written and published by Daniel Imbellino.
You can check out my Crypto community here: https://plus.google.com/u/0/communities/116312962316485325190
Cool, following you. Whats your current favorite coin/token?
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My favorite is Steem/Steem Dollar. I see so much potential for the Steem currency because of the ways in which its used. Unlike other cryptocurrencies its actually tied to real social platforms like Steemit, DTube, DLive, and others; giving it more potential value because its used for so many more purposes than the traditional coin.
Just look at how far Steemit and its associated platforms like DTube have come! No doubt, cryptocurrenices are the future of what will eventually become a de-facto standard in incentivized social media. Traditional social platforms will fail in the sense they offer no real value to their contributors.
Oh, wow, you share tons of crypto news! Will be sure to follow as well :)
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I think the problem will be that if there's too much regulation, cryptocurrency wont be that different to fiat currency. At some point, people should be able to decide what they want to use as a currency without governments stopping them. I'd like to see a lot more self regulation. The coinmarketcap site has advertised Bitconnect and other Ponzi schemes. A lot of ICO's have no MVP and it's hard to tell if they're real or fake. There should be minimum requirements before the ICO's are advertised.
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Unfortunately, where there's a potential to earn money, fraud will always follow. This is the whole reason we have regulations in financial markets to begin with. But regulations don't have to be something that impedes business either. Its definitely more than possible to enact rules of engagement in business, without harming the abilities to conduct business.
The problem is, government agencies like the SEC have long had a bad habit of enacting more regulations while providing very little oversight to ensure businesses are acting within the best interests of the public.
Regulations should be more geared towards oversight and ensuring business entities are playing by the rules, rather than putting up red tape that hampers the open markets.
For instance, Bernie Madoff perpetrated his investment scams for decades because of lax oversight by the SEC and others who never bothered to scrutinize his business practices. In this case it wasn't a lack of regulations that was the issue, it was the lack of oversight.
I think this is part of the reason the SEC has tread so lightly on the cryptocurrency market until more recently, they don't want to impede on the public's ability to conduct business, that would be bad for our economy regardless of the currency involved.
It appears the SEC isn't so much looking to heavily regulate the crypto markets either, they just want the ability to have oversight to help ensure fraud doesn't get out of hand, and they want investors to have confidence int he investment choices they make.
If there's any real threat to the future of crypto it isn't from the U.S. government or the SEC, but rather from commercial banks and payment processors. Bank of America recently issued a statement stating its concerns for the rise of cryptocurrencies and how they feel it may negatively impact their business. Likewise, Poland's central bank recently launched a smearing campaign on crypto, even going as far as to enlist the help of well known Polish personalities on YouTube to help pull it off.
Banks are the ones who want to stamp crypto out! The biggest threat to crypto at present though, likely has to do with the failures of integration in payment processing. This is why Visa and Mastercard are holding off so heavily from allowing the further integration of crypto with their financial systems. That's a whole other story though.
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