According to a survey by StarkWave, 53% of American respondents believed that crypto will be “the future of finance.” The crypto industry is highly volatile, and these quick price changes make it essential to have some form of regulation.

Without regulations, crypto users and investors risk losing money to scam projects and hacks. However, with the introduction of crypto regulation, crypto users and investors like you will have more safety for your digital assets. 

As global leaders try to find the most suitable way to regulate crypto, let us look at what crypto regulation is and how it could be in the future. 

What is Crypto Regulation?

Regulating the crypto market is essential for safety and stability. It involves processes backed by law that aims to protect investors like you in the market. Crypto regulation brings stability to the crypto market and prevents the harsh effects of liquidation and valuation. 

Safety is another critical benefit of crypto regulation, as it tries to ensure that scammers do not steal investors’ funds. This birthed KYC, known as the “Know Your Customer” concept.

Interestingly, without regulations, criminals can present scam tokens easily and make you lose your hard-earned money. The crypto regulation push will brighten up the crypto market with innovations. 

Implementation of Crypto Regulation In Countries

The implementation of crypto regulation in countries remains stagnant as many nations look for the perfect framework. Why? You may ask. Firstly, many are simply still trying to be careful with cryptocurrencies. The price of 1 Bitcoin has been hovering around the $19,000 mark. 

As far as regulation is concerned, the United States seem like the primary focus for other countries. The USA crypto regulation can be seen already in action as the Securities and Exchange Commission (SEC) has already begun charging people involved in fraudulent crypto activities. 

Crypto-regulated countries, Source – Statista

As the United States pioneer crypto regulations, other countries are moving gradually to get into the discussion. This week was a great one in crypto as The Organisation For Economic Co-operation and Development submitted a crypto regulation framework to the G20 on Monday, 10 October 2022, for review.

In addition, the European Parliament ECON Committee confirmed that the MiCA deal, which will regulate crypto assets, will become active in 2024. The European body voted in favour of the MiCA deal, which will supervise the crypto assets market, protect crypto users, and provide a favourable environment. 

All these actions show moves by governments and international organisations to provide a better crypto market that suits them. 

The Impact Of Crypto Regulation

While it seems the move by governments to regulate is a great initiative, many crypto experts think otherwise. At the foundation of how crypto existed, it began as a way to break free from the control of today’s financial systems. 

When Satoshi Nakamoto invented bitcoin, the bitcoin whitepaper showed that bitcoin was meant to give power to the people as a peer-to-peer digital currency and hand over control to the government again.

This is the root of the debate comparing DeFi vs CeFi and which is better suited to the crypto vision. As innovation within the space continues to grow, time will tell.

Pros of Crypto Regulation 

Crypto User Protection 

While explaining crypto regulation, notice that the primary focus is protecting you as crypto users and investors. Policies like the USA crypto regulation could stop market manipulation and insider trading, and this is what makes licenced crypto exchanges such as BingX special.

Prevents Tax Evasion

International bodies like the G20 will try to implement policies preventing crypto investors from evading tax that aid economic growth.

Tax evasion is a massive problem in the crypto industry, as many big investors want to make profits without paying taxes. 

Capital gains tax rate. Source – smartasset

Prevent Money Laundering 

This is one of the pros of crypto regulation. Due to how digital and anonymous crypto deals can occur, many criminals see it as an avenue of money laundering. This is what crypto regulations want to prevent.

Reduce Cybersecurity Risks

The crypto market and technology are very fragile, and there have been cases where investors lost a considerable amount of money to hackers. Exchange hacks have happened in the past without refunds to investors. This is why regulated exchanges like BingX credit themselves with complying across all industry standards and regulatory practices. As a result, it has obtained licenses to operate in Canada, Hong Kong, the United States, Australia, and Taiwan, where it has offices and over 100 more countries globally.

Crypto crime rate, Source: Chainalysis

With regulations, crypto exchanges will be accountable for cyber safety and for protecting public funds. Where an exchange gets hacked, laws enacted through crypto regulation will mandate exchanges to compensate affected investors. 

Increased Knowledge of Assets 

As part of the crypto regulations, many policies would mandate owners of assets and securities to provide complete information about investments. 

Upon enforcement of this policy, you will know crypto assets’ performance, risks, and potential to make profits. 

Cons of Crypto Regulation 

Regulation is Against the Values of the Blockchain 

One of the cons of crypto regulation is that it goes against the beliefs of the blockchain and decentralization. 

As said earlier, the whole idea of cryptocurrencies is to break away from intermediaries like the government and other financial institutions. When regulation is put in place by the government, it goes against the idea of decentralization. 

Lack of Innovation

Many argue that one of the cons of crypto regulation is the damage it does to innovation. Innovation will drastically reduce when cryptocurrencies and their parent companies follow a specific framework. 

One of the pillars of the crypto industry is its flexibility and ability to disrupt many industries. The introduction of regulations might hinder that. 

BingX As A Leading Regulated Crypto Exchange

BingX is the leading social trading exchange in the crypto industry. It offers derivatives and spot trading services to users across the globe in over 100 countries; it has operational licences, including Canada, Hong Kong, the United States, Australia, and Taiwan.

Unlike unregulated fraudulent exchanges, BingX ensures your fund’s safety by operating only within legal jurisdictions and countries with operating licences. BingX licenses and certifications include being registered as a Money Services Business (MSB) in the United States and Canada, an MTR dual licensee in Estonia, and providing digital currency exchange and digital currency wallet services as a Digital Currency Exchange (DCE).

If regulations are made rightly, it will drive massive crypto adoption globally. Unlike the many scam exchanges that violate government laws and get shut down with your hard-earned money, BingX can be your most trusted ally to stay safe in crypto.    

Begin your trading journey with BingX today.

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