{"id":3477,"date":"2021-05-16T15:51:01","date_gmt":"2021-05-16T14:51:01","guid":{"rendered":"https:\/\/coinscreed.com\/staging\/?p=3477"},"modified":"2021-05-16T15:51:07","modified_gmt":"2021-05-16T14:51:07","slug":"new-regulators-are-coming-for-crypto-here-is-what-financial-investors-need-to-know","status":"publish","type":"post","link":"https:\/\/coinscreed.com\/staging\/new-regulators-are-coming-for-crypto-here-is-what-financial-investors-need-to-know\/","title":{"rendered":"New Regulators are Coming for Crypto: Here is What Financial Investors need to know"},"content":{"rendered":"\n
Progressively modern and valuable guideline of advanced resources advances development and assists economies with prospering.<\/h5>\n\n\n\n
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Simply this week, Ether (ETH\r\n \r\n \r\n \r\n <\/g>\r\n \r\n \r\n \r\n <\/clipPath>\r\n <\/defs><\/svg><\/span><\/a>) penetrated the $4,000 mark while Bitcoin (BTC<\/a>), the world's most well-known cryptocurrency, as of late hit one more unequaled high at more than $63,000. In the meantime, Dogecoin (DOGE) proceeds with its exciting ride after “Dogefather” Elon Musk's appearance on Saturday Night Live and news about computerized work of art bringing eye-watering costs as nonfungible tokens are everywhere on the wireless transmissions.<\/p>\n\n\n\n

Crypto is hot if you like it.<\/p>\n\n\n\n

Still, not everyone is convinced. Janet Yellen, the newly-minted United States secretary of the treasury, previously\u00a0questioned the legitimacy and stability\u00a0of cryptocurrency as a store of value. After all, it was only three years ago when we saw the last Bitcoin bubble burst. After a meteoric rise in 2017, which saw BTC\u00a0crest the $20,000 mark, a 2018 sell-off cratered the asset and attracted \u201cTulipmania\u201d comparisons.<\/p>\n\n\n\n

Bitcoiners have been called \u201ccultists\u201d due to their zealous backing of this new, volatile and arcane technology. But don\u2019t be confused: it\u2019s not just technophiles and eccentric billionaires like Elon Musk diving into cryptocurrency. From JPMorgan to PayPal, bona fide Wall Street bluebloods and Silicon Valley stalwarts have been\u00a0buying\u00a0Bitcoin in a big way.<\/p>\n\n\n\n

The amount of BTC in circulation is now worth over a trillion dollars. Most of the major financial institutions \u2014 including investment giants and payment firms \u2014 are now backing the cryptocurrency, and there is\u00a0growing interest from retail investors. Bitcoin is becoming an increasingly important part of the global financial system.<\/p>\n\n\n\n

At the same time, Bitcoin still exists in a regulatory gray area as different governing bodies have knit together a patchwork of cryptocurrency rules over the past 10 years. In many cases, this patchwork isn\u2019t enough to give mainstream investors confidence in the market, as some of the most basic principles about cryptocurrency governance are still up for debate. For example, are cryptocurrencies considered assets or securities? Well, that all depends on who you ask…<\/p>\n\n\n\n

What do investors need to know about crypto regulations?<\/h2>\n\n\n\n

One of the big misconceptions about Bitcoin \u2014 and cryptocurrencies in general \u2014 is that the market is some sort of \u201cWild West\u201d: outside the scope of regulators and rife with scammers, outlaws and crooks. That\u2019s simply not true.<\/p>\n\n\n\n

Any business that touches consumers in the U.S. and other jurisdictions is subject to some form of regulatory standards and rules, which also apply to digital assets. There may not be a framework created with cryptocurrencies in mind, given that we are at the frontier of a new, disruptive technology. But various rules regarding consumer protection, prevention of money laundering, anti-fraud and other fields apply to the different activities that take place. Crypto companies can work with law firms to interpret the rules in relation to their business and comply with them to the best of their ability.<\/p>\n\n\n\n

The current crypto rulebook has been cobbled together over the past 10 years as regulation has played catch-up to innovation. But that might soon change: The confirmation of\u00a0Gary Gensler\u00a0\u2014 a former head of the Commodity Futures Trading Commission, or CFTC, who has taught classes on blockchain technology and cryptocurrencies at the Massachusetts Institute of Technology \u2014 as the\u00a0new chairman of the Securities and Exchange Commission, or SEC, indicates that the current administration is going to treat digital assets seriously and attempt to provide comprehensive oversight and regulatory guidance for this nascent market.<\/p>\n\n\n\n

Gensler has\u00a0intimated\u00a0that he\u2019s awaiting the completion of Yellen's review of crypto before enacting a regulatory agenda on digital currencies. Meanwhile, Congress is also taking a hard look. Last month, lawmakers\u00a0introduced\u00a0a bill to create a working group composed of industry experts and representatives from the SEC and CFTC to evaluate the current legal and regulatory framework around digital assets.<\/p>\n\n\n\n

It is hard to predict what we will see in terms of regulations for cryptocurrency and the various business models in the industry in the near future. Still, we have observed regulators becoming increasingly sophisticated and constructive, as they recognize that they have a duty to actively protect consumers, promote innovation and create a positive economic environment.<\/p>\n\n\n\n

How can institutional investors trust crypto companies?<\/h2>\n\n\n\n

With a plethora of crypto firms cropping up against this confusing regulatory backdrop in recent years, it\u2019s important for institutional investors to understand what pitfalls to avoid when choosing a partner to entrust with their digital assets. It is crucial to know how the firm is regulated, information that should be publicly available on their website and verified on the regulator\u2019s website.<\/p>\n\n\n\n

In addition, it is worth understanding every business model, as not all firms are the same. The basic concept of paying yield may look the same, but the risk profile may be quite different. If a firm is not transparent in how it operates and creates yield, it should be a cause for concern, and if their rates are materially different from competitors, I think it\u2019s important to understand why. Always read the fine print!<\/p>\n\n\n\n

Some companies may opt to work in jurisdictions known for light regulation, but skirting oversight comes at the expense of building trust and long-term business. Any company worth working with will have a proactive and collaborative stance with regulators. It is a complex landscape to navigate, and it can be expensive for startup companies, but it is part of the cost of building long-term value.<\/p>\n\n\n\n

Cryptocurrency lenders who need to be at the front line of the digital revolution need to accept the administrative redesign that will undoubtedly come and welcome the exchange with controllers. Financial backers should look for organizations with firms that esteem straightforwardness, consistence, aptitude, and decency.<\/p>\n","protected":false},"excerpt":{"rendered":"

Progressively modern and valuable guideline of advanced resources advances development and assists economies with prospering. Simply this week, Ether (ETH ) penetrated the $4,000 mark while Bitcoin (BTC), the world’s most well-known cryptocurrency, as of late hit one more unequaled high at more than $63,000. In the meantime, Dogecoin (DOGE) proceeds with its exciting ride […]<\/p>\n","protected":false},"author":63,"featured_media":3478,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[238],"tags":[132,274],"class_list":["post-3477","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-opinion","tag-crypto","tag-regulators"],"jetpack_featured_media_url":"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2021\/05\/download-2.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/3477","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/users\/63"}],"replies":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/comments?post=3477"}],"version-history":[{"count":0,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/3477\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media\/3478"}],"wp:attachment":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media?parent=3477"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/categories?post=3477"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/tags?post=3477"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}