State Of Regulation For Crypto Exchanges

Regulation is a hot topic when it comes to crypto exchanges. The best cryptocurrency exchanges have been the ones which have taken the initiative to comply with regulations. Many cryptocurrency exchanges such as Coinbase, Gemini and Binance have already adhered to such compliance regulations.

Other top exchanges such as Kraken participate in self-regulating organizations and exchanges such as Bitstamp have made serious inquiries into regulation.

If you want more info, here you can find a list of the best cryptocurrency exchanges and their stances on regulation.

Cryptocurrency exchanges

Regulated exchanges offer increased protection to the end user and investors alike. In 2018, we saw an increased interest in security token offerings, as opposed to initial coin offerings. These are companies that issue tokens for funds but register the tokens as securities.

One of the main reasons for the increased popularity of this type of offering is because investors will have a lower risk due to the token being subject to securities’ regulations. Similarly, regulated exchanges offer more protection to their users and there seems to be more of a movement in this direction.

What happened in 2018?

Cryptocurrency prices might have been declining during 2018, but the same cannot be said for the activity from governmental bodies, with several key developments having taken place within the same period. The Commodity and Futures Trading Commission (CFTC) met with the United States Senate to discuss how the industry could be regulated.

Other governmental body meetings also took place, including the one with the finance ministers of 28 European Union countries and the one with G20 members. Governments such as the one of the Republic of Malta also put forward legislations that provided a regulatory framework for cryptocurrency businesses to operate under.

Consequently, crypto exchange Binance, which regularly reports the highest amount of volume moved their headquarters to Malta.

What about next year?

With top cryptocurrency exchanges such as Binance, making sure they are regulated, we may see further movement in this direction from top cryptocurrency exchanges in 2019. The recent Cryptopia hack highlights the risk of using exchanges and more of the best exchanges are likely to make sure that they have regulatory oversight.

There are many other trends linked to regulation which may take place next year. Weaker cryptocurrency businesses are likely to shut down operations. Crypto exchanges such as Bakkt and ErisX have postponed their launch date so that they can have regulatory oversight from the CFTC for their products.

A Bitcoin ETF has also been yet another hot topic since 2017. All ETF proposals so far have been rejected by the Securities and Exchange Commission. An ETF is likely to remain a pressing issue this year and how it fares with regulation is likely to be the key factor with regard to whether one gets approval or not.

The best cryptocurrency exchanges and businesses have been the ones which have had regulatory oversight. Gemini rolled out an advertisement campaign around Manhattan to kick off 2019.

Crypto needs rules

Some of the slogans included “Crypto Needs Rules”, “Money Has a Future”, and “Crypto Without Chaos” – slogans which were specifically designed to promote the benefits of regulation within the crypto exchange business. Next year, it is likely that we will see more crypto exchanges paying attention to this.

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