Over the past few years, the cryptocurrency market has been making headlines, seemingly for the wrong reasons. After a real boom in crypto investing starting around 2017, came what some saw as a inevitable crash with the bankruptcies of well-known crypto platforms FTX, BlockFi and Voyager Digital. This upheaval in the crypto market has caused businesses and consumers to call for stricter regulations, not only to prevent the future collapse of similar platforms, but also to combat the scamcoin problem.
scam has been a problem among crypto investors since the emergence of cryptocurrency itself. As the name suggests, scamcoin is a fake cryptocurrency created to make quick money for developers, who then quickly disappear as consumers begin to realize they have been duped.
Since its advent, cryptocurrency has been akin to a “Wild West” approach to investing, with little (if any) oversight from federal regulators. Given recent issues in the crypto market and the ongoing scamcoin problem, many are calling for an end to the chaotic climate and intervention from regulatory agencies such as the state Securities and Exchange Commission (SEC). -United.
Support for aggressive surveillance
When asked to begin regulating the crypto market, the SEC responded with a strong push, taking 24 Cryptocurrency Enforcement Measures in the first half of 2023 alone. The agency supported these moves by saying that the regulations prevent future operators from fraud, market manipulation and scams by requiring crypto providers to disclose more detailed information about their crypto -currencies to consumers – and to the market in general.
For many, the stricter regulatory measures adopted by the SEC are long overdue, and perhaps long overdue. “Regulatory oversight is essential if consumers are to invest safely in cryptocurrencies,” says Singapore-based, US-based Shane Rodgers. PDX Global Pte. Ltd.. “From what we can see, few or no safeguards were in place, and this must change if the industry is to survive. »
Ethical crypto companies like PDX Global, which offers the PDX part digital currency project, support oversight from agencies such as the SEC. They argue that new regulations only serve to strengthen the crypto industry as a whole by working to weed out bad actors, scams, and misinformation that have weakened the entire crypto landscape.
In 2021, before the SEC stepped up its regulatory actions, crypto fraudsters set a record 14 billion dollars from consumers and investors. With so much hype surrounding the decentralized nature of the crypto market, many people saw others making significant gains in a less regulated area and wanted to get in on the action, no matter how insecure it was.
Today, however, many consumers have seen firsthand how risky decentralized finance can be without proper regulation in place. As a result, they are willing to consider oversight from a regulatory body to further secure their investments and actions in the crypto market.
What regulation means
With crypto markets being the “renegade rebels” of the financial industry, the mere thought of regulation can confuse – or even irritate – certain segments of the market. By defining what is meant by regulation, proponents of regulatory oversight can help steer the market and stakeholders in that direction.
“There is today a lot of confusion about the purpose of the regulations. Will the agency regulate the cryptoasset itself, or will it regulate the company that builds and manages the cryptoasset? Rodgers asked Financial technology time.
Agencies such as the SEC exist to regulate securities, which would therefore carry over into the regulation of companies that create and manage cryptocurrency assets. The SEC would also benefit from regulating any crypto asset attempting to prove that it can function as currency. Other companies that provide tokens with another purpose, such as utility coins, another regulator, such as the Commodity Futures Trading Commission (CFTC), for example, might be better equipped to provide oversight.
Whatever regulations are proposed and whichever body is chosen to provide oversight, it will be up to the crypto companies themselves to adhere to the guidelines to advance the crypto market. “At PDX, we are led by a mature and experienced management team, with a very conservative stance, particularly when it comes to regulation,” explains Rodgers. “We strongly believe that crypto regulation should be on par with, if not higher than, that of the securities and banking industries.”
by Rodgers notice is one that many people in the crypto world share, although they are wary of regulation being too “one size fits all.” The crypto industry’s favor seems to indicate reasonable regulation that would help consumers avoid the pitfalls of scams while keeping crypto accessible.
The future of regulation
“I know we need guardrails and real laws – black and white regulation from Congress. This is good for the industry because it accelerates financial growth and protects against fraud, tax evasion and money laundering,” Rodgers told FinTech Times.
What the future holds for cryptocurrency regulation largely depends on the governing bodies themselves. Nonetheless, it is clear that most in the industry agree that the time for such necessary regulation has already arrived.
Other European countries and Asia have found ways to regulate cryptocurrency through approaches that do not hinder industry innovation. In fact, in the case of Singapore – which many consider a model of regulatory oversight – there has been an increase in consumers adopting crypto as a means of currency.
Currently, as agencies like the SEC struggle to figure out how to police this new money market, regulation of the crypto space feels more like a patchwork of different ideas and approaches. With this confusion comes market volatility and people shy away from it out of fear. By building on other successful models, such as the approach used in Singapore, U.S. regulators can develop a more cohesive regulatory plan and put the crypto market on a bright path forward .