Isn't This the Right Time to Regulate the Crypto Industry?
The collapse of FTX, the no.3 Cryptocurrency exchange only after Bitcoin and Ethereum has not only sent shock waves through the financial world but nudged the government to start thinking seriously of putting in place some regulations for the De Fi industry.
The crypto industry has run largely unregulated up until this moment.
The call for regulation will not sit well with Crypto enthusiasts who ironically love the Crypto space because of the lack of regulation. Most conservative patrons of the Crypto space are in favor of some regulation.
How to strike a compromise between these two sets of patrons with widely differing views will be the challenge in a bid to set up a regulatory agency to safeguard transactions on the De Fi portal.
The Pro’s of instituting Regulations in the De Fi space
Let’s look at the pro’s of this move to regulate the Crypto industry.
For starters, the Crypto market is a wildly volatile one. It’s up one time, it’s down the next moment like the proverbial yo-yo. Regulation will bring in some form of stability to this market with the possibility of boosting confidence in patrons and outsiders as well.
Setting up a regulatory agency for Crypto would help to give guidance to an otherwise unruly and uncharted territory. Such guidance would lead to a clean up of the system.
Such a clean-up would no doubt attract institutional investors who are aware of the potential Crypto has of eclipsing the fiat currency in the long run
A regulatory agency will give protection to Crypto customers just as OCC gives to bank customers which make them go to sleep easy knowing fully well that if the bank goes belly up the following day, they will be paid a certain percentage of their savings.
There is little or no protection clause for customers in the Crypto world. As a result, customers have lost billions of dollars without a prospect of some repayment.
A third party Customer protection for patrons has the potential of preventing fraudulent activities and scams which are becoming commonplace in the Crypto ecosystem.
The Con’s of instituting Regulations in the De Fi space
On the con side, most Crypto enthusiasts would tell you they are drawn to Decentralized Finance because of its lack of government control. The allure of non-regulation is one major attraction for most people.
They will point out that the Blockchain offers enough protection for their investments and they do not need any government interference as in fiat currency.
The Blockchain is an immutable ledger that allows digital information to be recorded and distributed unedited. Every completed transaction is recorded on the Blockchain and can not be deleted.
The pitfall in this argument is that for the Blockchain system to work perfectly, there should be a regulatory body in place that will track a defaulting wallet and return any missing sum of money to its rightful owner.
Let me narrate my personal experience. Not too long ago, I mistakenly sent some money to a wallet other than my own. This happens quite often in the De Fi world and tragically it involves a large sum of money in some instances.
I could see the address of the wallet I mistakenly sent the money to, but how do I retrieve it? The wallet address is a long stretch of alphabets, numbers and other characters.
If there were a regulatory body in place, I would have just reported the incident and it would be its responsibility to track the owner of the wallet and retrieve my money.
My Take
I welcome some form of regulation because I think the lack of it is what is holding Cryptocurrency from general acceptance by the skeptical public that wants to see some form of regulation in place before throwing in their hat.
I also believe that instituting a regulatory body to oversee the Cryptocurrency space will sanitize the ecosystem of large scale scams and frauds. The fall of FTX is traceable to greed and gross mismanagement because there was no oversight.
A sanitized Crypto environment will only be inviting to institutional investors who will be too happy to bring in other big time investors and members of the public. In no time Crypto will be in the mainstream.
Do you think the Crypto space should be regulated or Not? What’s your take?
Recent Comments
39
This is a long post.
I only skimmed it.
My personal experience.
Accumulated eleven BTC through various means back in 2016.
Sold nine at about 25K each to eliminate debt. Should have waited until BTC went to 64K.
No worries. My and my child's debt is gone.
How did I lauder the money you ask? Or do you ask?
Peer to Peer is the answer.
So I still have 2 BTC left.
Through it, I bought some other cryptocurrency which is actually a gamble.
So, .4 of a bitcoin is invested in alternative Cryptocurrency.
Ethereum and Bitcoin cash are included.
USDT is a good place to store.
Now BTC is 16K. I HODL.
Remember supply and demand.
Understand that 1 BTC can be divided into 100,000,000 satoshis.
After the last halving that will occur after my death, it will be about a satoshi and not a bitcoin.
I am tired of Cryptocurrency Bashing.
Just my thoughts, my friend. I have been served well.
I let go at 25. What if I waited for 64? You obviously can do the math.
So, now at 16.
Please let it drop.
I would love for it to go close to zero.
I will buy it.
Remember there are only so many.
But also remember that each one can be divided into 100,000,000.000 according to the protocol.
The protocol is the key involved with Digital currency.
I am not an expert but thank you for your post that allows me to "Chime" back.
Kindest regards with respect from Canada.
Paul Mindra.
You seem to be more interested in investing in bitcoin than offering an opinion on whether the De Fi exchange should be regulated or not. I have to say, I am impressed with your knowledge of the Bitcoin exchange.
Wished you had 'hodl' on to it until it was 64! What a difference it would have made to your bottomline!
Hi, Dada.
What is Defi?
25 was good. 64 would have been better.
Son's and his wife's debt is gone.
Now at 16.
Looking forward to it going really low.
I hope it drops completely.
Then I can afford to buy some more.
And what the thing is this NTF?
Beyond me, my brother.
Non-Token Financial.
Or Not the F$$$
All money in our lifetime is going to become digital.
Btc, BTCCash, and Ethereum may not be bad choices
I want BTC to drop to zero.
There is only a limited supply.
I think 416 million.
The beauty is that each one can be divided into 100 million.
That is the magic of a Satoshi.
The white paper was actually well thought out.
Did you read it?
DADA in my world means a very respectful man.
Like my father who is no longer.
Wait for the price based on demand to drop.
Then buy even a fraction if you can afford it.
You are nice.
Peace, love, and light to you always.
Paul from Canada.
Buy low, sell High.
you are absolutely correct by brother in arms
64 would have been great, but I did not know.
De fi,
Decentralized finance.
No, it should not be regulated.
Dude
let's make some money when we can.
You are a nice man.
BTC is now at 17K.
I just bought another coin.
It was not easy for me to do.
I could have invested in a more traditional vehicle like "Real Estate."
Not my style.
I am a man of risk.
The U.S. banks are regulated and still screw their little customers out of who knows how much money with ridiculous fees and paying almost non-existent interest on savings accounts, etc. Decentralized finance offers small fees and the sky is the limit on interest rates.
Then there are stocks. Stocks are regulated but if the shares of a company crash, the investor is out of luck, same as crypto. The government can only do so much to protect individuals who make bad choices.
I prefer less government intervention in crypto for now. That said, I checked out the company I deal with before giving them a penny. Coinbase is a publicly held, fully transparent American company that had to be fully vetted by the SEC before joining the stock exchange. They are probably the safest bet for trading crypto right now. Binance is the other big name with a good reputation. They are a Canadian company so I haven't really researched them. I live in NY which outlaws most shady companies so I'm limited in the variety of ways I can choose to lose money.
I have no idea why investors piled into FTX. The company refused any scrutiny right from the start. So that was a big red flag that everyone ignored.
Our government will get its hot little hands on crypto at some point. Until then it is up to the individual investor to make informed choices and do some research.
It is also up to crypto investors to remember the most important rule...only invest what you can afford to lose.
You have shown a preference for a mild regulation for the Crypto exchange not a full-throttle one as advocated by other respondents. You would do due diligence by checking out your exchanges before you invest in them.
FTX was really bad.
Hi Wendy.
And you are correct.
Only invest what you can lose.
Back in 2016, I invested in BTC.
I also bought Ethereum, Solano, Bitcoin cash, ADA, and near.
Nice post.
Thank you.
I bought it for 600 USD and sold it for 25,000.
How did I do that without implication?
Peer to peer.
I am saying too much.
Do we understand that almost half of the population now reaching 8 billion is underbanked?
I'm going to follow you, Wendy.
You seem to me to be a very nice and considerate person.
Am I correct?
There is an idea.
Let's make money.
Kindest regards from Canada.
Post.
If bitcoin falls to zero, I will buy it all.
You take care.
Sent to you with my regard and respect.
Get a wallet.
Do not leave anything on an exchange.
Kindest regards.
Paul from Canada.
Postscript:
Are you familiar with Michel Moss?
No doubt we need regulations, and a country needs a constitution and an acceptable means to enforce regulations for the common good. The challenge arises when politicians or individuals with power attempt to keep old regulations that benefit them OR institute new regulations that will benefit them.
Every game has rules and referees which are considered just and fair for all. A problem develops when certain individuals with power are able to change the rules. For a Democracy to exist individuals need to be aware of and educated as to the true situation and determine what the majority do seek.
One of our major challenges today is the decreasing trust in our press, politicians, individuals with wealth and power, and public institutions which do not adapt to the changing times.
Thank you for showing support for regulation in our Crypto exchange to ensure trust in the process. I sure agree with you.
Hello Dada,
I think that there need to be regulations put in place in order for this industry to go mainstream. And it will be regulated and the industry will go mainstream in time whether we like it or not.
However, I also believe there needs to be some type of oversight so that there isn't the mass manipulation of the market that allows the rich to get richer with only a few lucky average joes thrown in the mix. Like the GameStop and AMC manipulation that took place that cost the average retail investor a ton while the big guys made huge amounts.
Just my two cents.
Have a wonderful day!
Thanks for your two cents. I totally agree that Decentralized Finance will go mainstream whether we like it or not, especially with the regulations envisaged.
Hi, Brandaley.
You are very smart.
What kind of regulation would you place?
Cryptocurrency is already mainstream.
More than half of the world is underbanked.
Mass manipulation will occur if there is regulation allowing what?
Just as you say.
Kindest regards from Canada.
Cryptocurrency.
I like it.
Hello,
I would like to see that there is some regulation put into place to hold the creators accountable for their fraudulent actions.
There are too many cryptos out there that were created solely to get the investment from retail traders then they take all the liquidity and run. They get filthy rich over night from what amounts to grand theft and pay no consequences.
It’s just not right.
But that does not mean that it should be regulated by the SEC either.
Personally speaking I feel it should be a regulatory body made of a ratio of retail investors, institutional investors, legal advisors, financial advisers all with the equal voting power and where no one person can hold more than one position on the panel or be financially affiliated with any other member so that one subset cannot control the outcome.
So say it consisted of 101 member body…
Retail Investors = 41
Institutional Investors = 30
Legal Advisors = 10
Financial Advisors = 20
I also think that all businesses of the regulatory body be conducted through the blockchain which forces transparency because anyone can see everything and every vote.
That’s just me, and how I would do it, you know it will not happen this way unfortunately.
Have a wonderful day!
Great idea, Brandaley! I am all for regulation that will not leave a chief executive with all that power to mismanage investment in their care.
Ya, I think so. But unfortunately I have no pull with those in power lol.
Have a wonderful day!
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Hi Dada, I just read your post about crypto regulation. I definitely think there should be regulation of this industry.
I noticed you joined WA around the same time as me in 2017, but our paths never crossed before.
I would be interested to hear more about your crypto experience.
Cheers
Alan