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Modern Economic Nonsense — Global crypto ...

Modern Economic Nonsense — Global crypto regulations are coming

Jul 11, 2022

Cryptocurrencies aren’t going away anytime soon. That much is certain. According to a report by CryptoCoinsNews, the number of existing digital currencies has surpassed 1,500, which is only expected to increase in the following years. However, the latest news from authorities regarding cryptocurrencies and their impact on society is mixed. Governments are still trying to determine what exactly cryptocurrencies are and how to regulate them appropriately so that investors don’t lose money after buying into them. Many governments have already created their own cryptocurrency regulations. Still, there is growing pressure for other countries to follow suit with their rules within the coming months and years. Here are some things you need to know about crypto regulations as well as how they might affect your investments in the future:

What is cryptocurrency regulation?

Cryptocurrency regulation is a set of laws, rules, and policies that govern the use and trading of cryptocurrencies. It is a complex area of law that is developing quickly. But the basic components are simple. This is a space where everyone can create, issue, and trade a digital token. The tokens have many uses, but buying and selling things online is the most common. The tokens can also be exchanged for goods and services, pay for internet access, or other cryptocurrencies. Trading these tokens is conducted on a digital platform, like a stock exchange. Cryptocurrencies are stored electronically, like digital money. Cryptocurrency exchanges facilitate trading and operate like stock exchanges, listing the prices of cryptocurrencies and allowing trading between customers. Governments are grappling with how best to regulate this new asset class. They are trying to balance the interests of cryptocurrency users and investors, who have dreams of high profits from investing in cryptocurrencies, against the interests of society, which may include the need for transparency and protecting people from fraud.

Japan: Cryptocurrency subject to new laws and regulations

Japan is one of the first major governments to regulate cryptocurrencies. In April, the Japanese government recognized Bitcoin as a legal method of payment. So from now on, businesses in Japan can start accepting Bitcoin as a payment method and individuals can use it to buy goods and services from other businesses. The Japanese government also created a Financial Services Commission to oversee and regulate cryptocurrency exchanges, like QUOINEX. The commission is currently drafting laws governing how cryptocurrencies are traded, including setting rules for the safety of customer assets.

SEC: Initial coin offerings (ICOs) illegal, securities fraud

The U.S. Securities and Exchange Commission (SEC) is trying to stop the growing number of fraudulent initial coin offerings (ICOs). The SEC has warned investors to be wary of fraudulent ICOs that promise high returns on little investment. The SEC says that ICOs that offer securities without following the appropriate laws and regulations are illegal. The SEC also says that cryptocurrencies are assets and therefore must be registered with the SEC. If unregistered, investors can be breaking the law and risking heavy fines if they sell their cryptocurrencies without registering the trade as well.

European Union: Bitcoin as a commodity and payment method only

The European Union is trying to navigate between Bitcoin’s potential to be used widely for illicit activities and its potential as a viable financial instrument. The EU has created a task force to study how cryptocurrencies could be used for tax evasion and money laundering. The EU is considering a range of regulations for cryptocurrencies to help curb these potential uses. While the EU is trying to regulate cryptocurrencies, it is also opening its doors to Bitcoin in hopes that it could be used for legitimate transactions. For example, the EU is working on a law that would make it easier for businesses and people to pay each other using Bitcoin.

South Korea: Ban on all anonymous accounts and trading in cryptocurrencies

South Korea has decided to ban anonymous accounts and trading in cryptocurrencies. The regulation was implemented after the exchange of cryptocurrencies at the Infinity Economics Hack, where hackers stole $7 million worth of cryptocurrencies. The government said that anonymous accounts and trading of cryptocurrencies would allow hackers to operate anonymously and evade punishment. The government also blasted the “irrational” use of cryptocurrencies, saying that the recent craze for investing in cryptocurrencies could easily be reversed if people understood the risks and the “very slim” profit potential. The South Korean government is also trying to regulate cryptocurrencies. Most recently, the government announced that it is looking into a plan to make cryptocurrencies more closely regulated. The plan does not include a total ban on trading, but it would require investors to have more information about where they are putting their money.

The United States of America. Stronger rules are coming soon

The United States government has been trying to figure out what cryptocurrencies are and how to regulate them since they first came into existence. However, the recent Mt. Gox incident and the US law enforcement’s crackdown on Silk Road 2.0, a marketplace for selling illegal drugs using anonymous currency, has pushed the US government to act. As a result, the US government is not only trying to regulate cryptocurrencies like stocks, bonds, and money, they are considering classifying them as commodities.

Bottom line

Cryptocurrency regulation is still a relatively new field of law and is changing quickly. While governments are trying to figure out a way to regulate the growing number of cryptocurrency users, investors, and exchanges, investors should be aware of the risks and protect themselves from fraud.

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