Ever remembered the good old days when cryptocurrencies were unregulated? These days, regulatory changes played a crucial role how cryptocurrencies are valued this year. Up until mid-December 2017, it was clear that everyone was optimistic about the rise of Bitcoin and other altcoins. In fact, Bitcoin almost reached $20,000. And now, it seems that Bitcoin is struggling to even hit $10,000.
Asian countries from South Korea to China had their share of regulatory changes that affected the overall landscape of cryptocurrency price today. And it doesn’t end there; India recently announced its plans to take a closer look at digital currencies. As for the latest country to take a closer look at their rules, it’s Abu Dhabi that is now aiming towards cryptocurrency exchange operations. According to Abu Dhabi’s markets regulator, it has been considering to draw a supervisory framework for crypto exchange operations.
Announced last Sunday, the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market mentioned that it is already “reviewing and considering the development of a robust, risk-appropriate regulatory framework in order to regulate and supervise activities of virtual currency exchanges and intermediaries”. This move is an additional guidance towards their regulatory approach to ICOs in October 2017.
Anti-Money Laundering and Know-Your-Customer
There are two things that FSRA wanted to include in its regulation when it comes to cryptocurrency exchanges. They want to apply both anti-money laundering and know-your-customer rules. FSRA notes that their concern comes from the possibility that cryptocurrencies can be used as a form of financing terrorist activities and could even be used for money laundering. And also, given the fact that there are many crypto exchanges that have been hacked already, it isn’t surprising why FSRA wants to take these steps.
It has plans to include advisory input from industry companies regarding the proper regulatory approach that can be done in order to protect the market as well. FSRA mentioned that the investors and exchanges should approach the agency before the discussion takes place in order for them to know the proper treatment regarding the crypto market.
Is This a Good or a Bad Thing?
If you will look at the precautions being made by FSRA, it isn’t really a bad thing. In fact, you can consider it as something good, especially to a new and still relatively unexplored market. And yes, there will be trial and error on the part of regulators but this is a great way to protect not only the investors but also the reputation of the entire cryptocurrency market.
These days, it is true that cryptocurrency market doesn’t look the same from quite a few years ago. The market has ballooned in such a small period of time that people are regulators are now paying close attention to the possibility of scams, cyber attacks and the possible use of cryptocurrencies on illicit activities.
And though blockchain tech remains a great innovation, it all boils down to the risks to its investors. For a good number of countries, they just can’t let cryptocurrencies operate without any form of regulations.