The Rise of Decentralized Exchanges after the latest US Government Crackdown of BTC-e

Overview
A lot of confusion and panic has been going around in the crypto markets lately based on the latest SEC Investigative Report involving Initial Coin Offerings (ICO’s) and most importantly the latest takedown of the BTC-e exchange which was fined $110 Million after the creator was suspected of money laundering. According to coindesk.com: Vinnik, the BTC-e creator, was also charged with one count of operating an unlawful money services business. While some of us believe that government regulation may be a good thing, it may be important to take a look at the overall effect that the Security Exchange Commission laws could potentially have on the overall centralized exchange market. Poloniex and Bittrex are the two largest centralized exchanges that most of us use on daily basis. Because they are centralized, they are convenient, simple to use, and make deposits and withdrawals quick and painless. On the flip side, centralized exchanges also come with an increased risk of security as we have seen with Mt. Gox and other exchanges which have been hacked resulting in millions of dollars’ worth of coins being stolen.

Centralized exchanges
One of the most popular and trusted exchanges, Bittrex, a US based company must now work closely with the U.S. government in order to ensure compliance with potentially brand new laws and regulations. As a Bittrex customer, this could potentially mean more fees as a customer or possibly more investor information that must be handed over to the government. As the U.S. government continues to iron out the details of bitcoin law, this could potentially create a rush of investors flocking over to the decentralized exchanges.

Decentralized exchanges
Why decentralized exchanges, you ask? Because investors can buy and sell directly to each other without having to transfer funds directly over to the exchange. As a result, you keep your transactions more secure and private, which also means almost no liability and government regulation for the exchange. If you are new to decentralized exchanges, they tend to be a little less user friendly but overall offer the greatest control over your cryptocurrency.

What might this mean for investors?
Like most of us that believe that cryptocurrency is the future, we utmost value our privacy and the security which alone should create more interest in decentralized exchanges. If you prefer to minimize the role of government snooping, decentralized exchanges are going to be the best way to protect investors. Cryptocurrency must always remain an alternative source to protect against a government fiat money crisis. It must also remain universally accessible to everyone around the world. If regulators decide to over enforce government on the crypto market, we could potentially kill innovation and investment opportunities in America.

Please check out some of the following decentralized exchanges to learn more:
• https://bitsquare.io/
• https://bitshares.org/
• http://wavesplatform.com
• https://etherdelta.github.io/#PLU-ETH