Ethereum

Cryptocurrency

Gary

April

The cryptocurrency industry is undergoing a regulatory shift, with recent events showing that regulators are taking a closer look at the market. The collapse of FTX and the SEC’s charges against Bittrex and its co-founder serve as a wake-up call for the industry to start taking regulatory compliance seriously. Cryptocurrency exchanges must understand that having a license does not give them free rein, and responding to regulators in public through social media is unproductive. Only by playing by the rule book and being willing to compromise can companies build confidence and stability within the industry. 
<h2 id="h-the-changing-regulatory-landscape-of-the-cryptocurrency-industry">The changing regulatory landscape of the cryptocurrency industry</h2> 
The collapse of FTX sent shockwaves through the industry, signaling a changing tide in the regulatory landscape. While some may have celebrated the downfall of FTX and made light of its founder’s misfortunes, the reality is that regulators are no longer turning a blind eye to the crypto market. As the industry continues to grow, with both good and bad actors, and the technology proves itself and scales up, more strict rules will come into play. 
Regulatory compliance is crucial for any cryptocurrency exchange to gain legitimacy and build trust among its users. Having a license doesn’t mean a company can create any product it desires but only approved products. Similarly, the crypto industry needs to understand that having a license does not give them free rein. 
<h2 id="strong-the-response-of-different-cryptocurrency-exchanges-to-regulatory-challenges-strong">The response of different cryptocurrency exchanges to regulatory challenges</h2> 
Different exchanges have responded to regulatory challenges differently. Coinbase threatened to leave the US if regulatory clarity doesn’t emerge and immediately went earlier on the offensive on social media when it received a Wells Notice from the SEC enforcement staff. 
In contrast, Kraken immediately agreed to cease offering or selling securities through its programs and paid $30 million to settle the charges. 
<h2 id="strong-the-investigation-into-binance-and-concerns-about-its-past-practices-strong">The investigation into Binance and concerns about its past practices</h2> 
Then there’s Binance, the biggest exchange in the industry with a market dominance above 53%. The crypto giant has been accused of facilitating at least $10 billion in money laundering and sanctions evasions for criminals and rogue states. Senators Elizabeth Warren, Chris Van Hollen, and Roger Marshall have placed Binance under investigation for potential sanctions evasion, money laundering, and unlicensed money transmission. 
Binance CEO Changpeng Zhao has not commented on the investigation, instead leaving the matter to his legal counsel. While Binance has a large team of lawyers and compliance professionals, there are concerns that the exchange engaged in many shady businesses and wrongdoings prior to its decision to start applying for licenses with regulators around the globe. 
It’s essential to recognize that regulators are not to blame for cracking down on crypto exchanges. While they may be tough, they are willing to compromise and discuss. Companies must accept that mistakes and wrongdoing took place before the regulation era and work based on the existing rules while lobbying for better ones. Responding to regulators in public through social media is unproductive and risks damaging the industry’s reputation further. Only by paying for their mistakes, being modest, and playing by the rule book can companies build confidence and stability within the industry. 
<h2 id="strong-the-future-of-regulatory-clarity-for-the-digital-asset-industry-in-the-us-strong">The future of regulatory clarity for the digital asset industry in the US</h2> 
From another end, the system in US will correct itself, though we agree that SEC &amp; CFTC have been harsh and did not offer a lot of clarity on the laws, but somehow this wont continue forever, as we saw during the congress hearing on April 18, when The chairman of the US Securities and Exchange Commission was&nbsp;called before Congress . Specifically, the hearing was centered around action taken by the regulator regarding the digital asset industry. 
Within that hearing, SEC Chair Gary Gensler refused to say if Ethereum (ETH) is a commodity or a security. Indeed, Gensler faced questions from House Committee Chairman Patrick McHenry. Subsequently, in answering the question regarding this, Gensler replied, “It depends on the facts of the law.”&nbsp; 
Amidst the hearing, Chairman McHenry noted that the SEC took 50 different enforcement actions against the digital asset industry. Furthermore, they did so without laying out clear rules of operation for stakeholders. 
McHerny stated, “Punishing crypto market companies when not clearly mentioning rules as to how they should comply is not ideal. Regulation by enforcement is not sustainable. 
The post <a rel="nofollow" href="https://www.unlock-bc.com/100519/regulatory-wake-up-call-how-cryptocurrency-exchanges-are-responding-to-increasing-scrutiny/">Regulatory Wake-Up Call: How Cryptocurrency Exchanges Are Responding to Increasing Scrutiny</a> appeared first on <a rel="nofollow" href="https://www.unlock-bc.com">UNLOCK Blockchain</a>.

Regulatory Wake-Up Call: How Cryptocurrency Exchanges Are Responding to Increasing Scrutiny

Table of Contents

UNLOCK_ENG

Other articles published on Apr 19, 2023

Square Enix Strengthens Commitment to Web3 Gaming with New Partnership

Unlocking the Secrets of Crypto Wealth: Proven 7 Strategies for Long-Term Investment Success

MetaMask Addresses Accusations of Involvement in $10M Hack

Bybit Opens Dubai Headquarters, Crypto Daily TV 19/4/2023

Copia pauses Uganda operations due to economic challenges

Hong Kong-based crypto exchange LBank to list NEWS token

Join our free newsletter for daily crypto updates!