Crypto regulations are coming
It’s pretty much the modern day equivalent of the Great Glass Ceiling: a looming regulatory wall that will keep crypto safe from hackers and other outside threats. But as is the case with any regulatory overhaul, there are tweaks and new rules to be added before we get to our untapped potential, especially after the FTX collapse. That being said, one thing is for certain: regulatory changes won’t completely eliminate cryptocurrency. And while they may make it less accessible to an untrained eye, they may also ease the way for more institutional investors and developers alike. We’ll discuss what those implications are below, but first let’s take a look at some of the most recent developments around cryptocurrency regulation in the U.S. We’ll also highlight where you can help fight back against these new regulations by developing your own — or already have one on hand.
What is Crypto Regulation in the U.S.?
The National Security and Immunities Act of 1952 started the modern era of cryptocurrency regulation in the U.S., when it was passed alongside the National Defense Authorization Act. The act established a formal regulatory framework for digital assets and Issuer Protection Laws, which established standards for who can own and operate digital assets and what those assets can do. It’s important to keep in mind that the National Security and Immuneities Act was passed during a period when crypto wasn’t yet a widely recognized form of money. Therefore, the act included only limited regulations on use and ownership of virtual currencies. It was the first major international regulatory change that focused on cryptocurrency and it’s immediate successors.
Crypto regulations in the U.S?
The following are the major regulations and uses of crypto in the U.S. today:
- Investment. Any investment in virtual currencies requires an investor to obtain legal permission from the government before implementing any significant amount of capital.
- Investment in banks and financial institutions.
- Investment in financial products.
- Investment in the savings and investment systems of other countries. - Investment in exchange rate systems.
- Investment in know-your-customer (KYC) programs.
- Investment in KnowYourExternalities (KYC-based) programs.
- Investment in Blockchain technology.
- Investment in Blockchain and software security.
But it does not prevent the fall of FTX US.
What Happens when a Regulatory Tackles Cryptocurrency?
Cryptocurrency was first developed in 2004 as an alternative payment system to the traditional financial system. It is a decentralized, digital money that is susceptible to peer-to-peer and other computer-to-computer transactions. Currently, the U.S. Securities and Exchange Commission (SEC) regulates cryptocurrencies as an investment and doesn’t regulate the market price or value of cryptocurrencies as an investment. There is main challenges with the current regulatory environment that requires crypto to become an investment asset under compliance with the law. There is a clear opportunity in the blockchain and cryptocurrency space. The blockchain is a decentralized computer network that is decentralized from centralized computers. It’s not controlled by any central authority and provides transparency and trustworthy data. The blockchain is also digital and offers incredible scalability, making it ideal for growing industries such as healthcare, education, and government.But the SEC also has an ongoing fraud investigation into the apparent misappropriation of funds. This is the first time that such a scandal has been detailed in full in the same report. The SEC also has a plan to implement oversight of blockchain and cryptocurrency companies. The agency has committed to creating a “comprehensive, uniform, and integrated blockchain and cryptocurrency oversight program.” But how about the CEX regulations that possibly will prevent another collapse in FTX is coming to reveal in years.
Bottom line
The U.S. Securities and Exchange Commission (SEC) has been regulating cryptocurrencies as an investment since December of last year and has committed to implementing updates to the rules for the next few years. The agency will also conduct market analysis of recent prices to identify emerging trends and provide updates as warranted. What’s important to remember is that the regulatory landscape in the U.S. is slowly moving in the right direction and cryptocurrency is only the latest regulatory change to consider. As more industries start to adopt blockchain and cryptocurrencies as an alternative payment system, the landscape will become more flexible and welcoming to new players. With that, there is a strong potential for the industry to grow in the future. But how about decentralization that people focus to work and develop on?! Will FTX collapse drag entire industry down into heavy regulations is a question that is going to reveal soon.
