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The cryptocurrency market is home to over 10K projects, according to CoinMarketCap. Having an abundance of options in the market has always been a topic of discussion – and while more options can equal more opportunities, the fraudulent cryptos can also empty investors’ pockets in the blink of an eye.
Many regulatory bodies have tried to monitor and address these crypto assets, but keeping up with their exponential growth is challenging. So, if your next goal is investing in cryptocurrency, this post might be the right one for you!
Cryptocurrency Regulations Around the World
Cryptocurrency regulations have always been “part of the game,” so knowing the latest crypto regulation news is not a choice but a necessity to help avoid legal trouble.
United States
Cryptocurrency regulations in the United States are a complex process mainly driven by the need to tackle criminal activities and protect consumers. The US Treasury has emphasized the urgent need for crypto regulations. At the same time, agencies within the government have views that overlap or differ from one another, sometimes making it even more intricate.
Because of this push for regulation, exchanges are being controlled as much as possible and often found guilty. The US Securities and Exchange Commission (SEC) plays an important role in regulating cryptocurrencies such as Bitcoin from an investor protection standpoint and helping prevent fraud through its enforcement division’s investigatory powers handled at a federal level across America.
And while reputable exchanges like Paybis have not been flagged, even big names like Binance and Coinbase are often “subjects of interest” for the regulators.
United Kingdom
The regulatory framework for cryptocurrencies in the UK is in progress, but specific regulations are already in place. Residents can invest and trade in cryptocurrency with their resources.
However, when it comes to selling crypto products or making a public offering (tailored to retail consumers), that space must fall under the Financial Promotion Regime, which safeguards against scams and other financial crimes.
Also, if an entity wants to collect money from investors who will become eventual shareholders when investing in cryptocurrencies, these companies must meet Prospectus Regulations, too.
Japan
Japan is topping the charts regarding cryptocurrency regulations worldwide. Japan’s approach to cryptocurrency regulation has been highly regarded due to its forward-thinking and proactive nature.
Japan was among the first countries to recognize Bitcoin as a legal form of payment, bringing many changes for regulators. The country also introduced legislation pertaining to cryptocurrencies, such as taxation on crypto investments and anti-money laundering (AML) rules that banks must follow when financing or transferring money related to digital currency activities.
European Union
The European Union has been at the vanguard of cryptocurrency regulation, implementing initiatives to establish greater security and stability in the crypto market. In 2019, members of the European Parliament approved a world-first package of rules to regulate cryptocurrencies.
Besides curbing illegal activities such as money laundering through increased transparency demands on exchanges and other entities that facilitate trading and custody services within their jurisdiction, these laws also aim to protect consumers when they invest or make payments with coins or tokens.
The EU also wants to address environmental concerns related to energy consumption and carbon emissions associated with virtual currencies, encourage investment opportunities and innovation, and, most notably, ensure ongoing safety measures are met throughout all crypto usage.
The Evolution and Challenges of Crypto Regulation
Regulation-related conditions often come down to regional laws implemented by local governments. This means those wanting to invest must follow their local legislation while keeping an eye on progress worldwide if they wish to maximize yields without falling foul.
However, most financial advisors would agree it’s always best to understand exactly what you get involved in before putting any capital risk investing in any asset class – whether fiat or digital commodities.
Written by
Paul Kinyua
Paul Kinyua is a passionate researcher, writer, and editor with a deep interest in cryptocurrencies and blockchain technology. He’s a tech enthusiast and educator who enjoys unraveling the complexities of blockchain technology for readers.
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