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Cryptocurrency Regulation | Is this what We Need to See Market Growth?

We’ve all heard the saying that “ignorance is bliss” at some point in our lives, but this term most certainly does not apply to the financial world.

In the financial sphere, ignorance is risk, not bliss.

It’s for this very reason that traditional financial markets are regulated. The US markets are more than happy to see reasonable regulation, as it ensures a suitable level of transparency and fairness.

When it comes to stocks, we see regulation by the Commodity Futures Trading Commission (CFTC), and government-issued currency is overseen by the Department of the Treasury and the Federal Reserve.

A Lack of Trust

However, we’ve recently seen the emergence of another asset class, known as cryptocurrencies, and for the time being there is no single cryptocurrency regulator overseeing matters.

This had lead to uncertainty and a lack of trust from the more established financial players.

While we’ve seen the Securities and Exchange Commission (SEC) announce the appointment of a “crypto czar” in Valerie Szczepanik in June, with the task of working out how to apply the application of US financial regulations and laws to cryptocurrencies, it’s fair to say that this is still very much a work in progress.

Until such a point is reached where the various governments can step in and get a handle on matters, we just have to accept that the cryptocurrencies world is a modern equivalent of the Wild West, right?

Well, maybe not.

Ensuring Full Compliance

As mentioned, the lack of cryptocurrency regulation isn’t something that reputable players in the industry are happy about, and with that in mind, we’ve seen some platforms and exchanges take matters into their own hands and look to bring a level of self-regulation into their business.

One such company is London-based Archax, who has only recently announced a partnership with Aquis technologies, which is the financial and regulatory technologies service arm of Aquis Exchange.

Archax has unveiled their new trading platform targeted at institutional investors.

The type of investors who are used to operating in a “regulated manner” and who have perhaps previously viewed digital assets as being volatile and unreliable.

We’ve seen a similar approach taken by Liechtenstein-based exchange ETERBASE, which has headed up a leadership team that boasts many years of experience at the highest level of the traditional finance world.

Only recently ETERBASE obtained regulatory assessment in Liechtenstein and was quick to comply with the EU General Data Protection Regulations (GDPR) to ensure full compliance.

So, while there’s no official government stance on crypto regulation at this time, it is comforting to know that there are exchanges out there who are holding themselves accountable rather than taking advantage of a lack of rules and regulations.

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Crypto Second Half of 2018

Crypto Second Half of 2018: Investors were not pleased with the first half of 2018. While some focused on the S&P 500 (it’s up 1% YTD, instead of the usual 3.5%), others focused on cryptocurrencies.

In particular, investors watched Bitcoin, which notched up a 16- fold increase in 2017, only to drop by 55% between the start of 2018 and June 27th. 

Now, as of July 1, we are in the second half of 2018. Which means if things are going to change, now is the time to get going. But what if things change for the worse? Some speculate this might happen in the cryptocurrency industry. 

Crypto Second Half of 2018: Placing Bets 

A number of predictions have been made for crypto in the second half of 2018. From more regulation to more comments from Wall Street veterans, there is a lot of stuff up in the air about crypto Q2 2018. 

In this article, we’ll look at 3 specific crypto second half of 2018 predictions.

1: More Crypto Regulation 

Crypto regulation has been discussed on multiple occasions, and even though progress has been made, more needs to be done.

As a result, we should expect to see the Department of Justice (DOJ) increase its crackdown on illegal activity. 

2: More Guidance from the SEC

Moreover, the SEC is expected to provide more guidance on initial coin offerings (ICOs). This is important, as ICOs continue to garner more mainstream attention.

The reason we need more information is that many remain unclear about ICOs. Are they revolutionary, like some have said? Or, are they just another Ponzi Scheme, which has also been claimed? 

Others expect the SEC to answer the burning question of whether all ICOs are classified as securities in the second half of the year. If the SEC makes this announcement, we should expect to see fundraising slow down considerably.

>> Difference Between an ICO and a Cryptocurrency  

3: More Adoption on Wall Street 

In order for there to be wider Wall Street adoption of cryptocurrencies, the first two predictions on this list need to come true.

Large financial institutions will continue to stay away from cryptocurrencies and ICOs until the SEC clearly communicates its rulings on digital currencies. 

Take the example of Coinbase and Ripple (XRP). Sure, it makes sense for Ripple (XRP) to be listed on Coinbase, but the crypto startup has said publicly that it will never list XRP until the SEC has made its decision on the virtual currency. 

Additionally, regulators need to show that they can remove the criminal activity from the crypto industry. If these requirements are met, more traditional financial firms will enter the crypto space. 

>> Financial Institutions Already Involved in Crypto

Crypto Second Half of 2018: The Takeaway

Continued market volatility is also expected for the crypto industry, but this seems like a given. After all, even the most successful of stocks experience volatility from time to time. 

Do you have any more predictions for crypto? We’d love to hear them! Let us know in the comments below. 

Featured Image: Depositphotos/Konstantinp

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