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SEC and CFTC May Combine Efforts to Regulate Cryptocurrencies

Bitcoin ETFs are a hot topic with the US regulators. The Securities and Exchange Commission, in particular, has been expected to approve some of the applications for some time now, but it looks like they are trying to avoid it at all costs. Furthermore, most of the applications have been either denied or completely ignored without even the slightest hint of feedback. The applications are long overdue, and the applicants are starting to become restless.

However, the SEC had a ‘meeting’ with the other US regulator called the CFTC (Commodity Futures Trading Commission), it has been reported that the two regulators have shared their opinions about the matter and are ready to partner up to tackle cryptocurrencies.

Comments about the Industry

The ‘Crypto Mom’ (Hester Peirce) herself explained the SEC’s stance towards Bitcoin ETFs. She noted that they have been rather reluctant to sign off on the Bitcoin ETF applications they have been receiving. Although it is not the best type of feedback, it is still better than nothing. So now we know that the applications could be far away from approvals.

>> ICO Scams: FBI Seeks to Educate Investors with Red Flags for ICO Fraud

There is one contradiction about the announcements, however. Peirce noted that there are numerous markets that are not regulated by the SEC, but products are still being developed within them. She also noted that the Bitcoin ETF approach seemed a bit merit-based, which was dangerous. However, it is hard to connect the two statements together. If it is as dangerous as any other unregulated industry, then why are other industries still able to operate but cryptocurrencies are kept lagging behind? These are the questions that most Bitcoin ETF applicants are willing to find an answer for.

The CFTC Commissioner, Brian Quintenz, noted on top of Crypto Mom’s announcement that the CFTC has a pattern when dealing with such a predicament. For example, if there is a side that had an application with the CFTC, the regulator has a specified amount of time to reply with either “Yes, we agree, let’s do it,” or with “No, we disagree and here’s why.” If the CFTC fails to make any of these two answers, then the applicant will have the chance to self-certify, meaning that there will be no involvement from the side of the regulator.

Clashing Ideals

Although both of the institutions are trying to regulate crypto assets, they still have a division in the way they look at them. For example, the CFTC is responsible for Bitcoin and Ethereum directly, and the SEC is more in-tune with the ICO (Initial Coin Offering) market. These two are practically inseparable, that’s just basics of cryptocurrency, meaning that no matter what, if a full regulatory framework is introduced from both sides, a joint effort will be required at some point.

>> Cryptocurrency Bull Run: An Improving Economy Encourages Gains

Crypto Mom even mentioned the fact that she and Brian Quintenz are interested in combining their efforts in tackling this “confusing” market. Whether or not a joint effort is announced remains to be seen, but nothing can be certain. If there indeed is a partnership to come, then Bitcoin ETFs can have two options. Either be completely forgotten by the SEC or be more quickly adapted thanks to the CFTC’s ideals.

Featured image: DepositPhotos © hello.artmagination.com

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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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