The rhetoric regulation will stifle crypto adoption goes further into the rabbit hole and perhaps watch dogs have turned hawkish towards mitigating the damage. Be it the hacks, rug-pulls and bankruns, no innovation should be at the cost of public interest. On that note, Singapore’s financial regulators have pledged to take punitive actions against financial abuse through crypto.
What Regulation Could Mean for The Industry?
Top 5 exchanges like Binance, Coinbase, Kraken, Crypto.com and Ku Coin facilitate 99% of crypto trading. Any crypto regulations from a state backed dictum would mean other economies may follow in the same footsteps. Hence it would more or less impact trading instruments which very well fall under the security segment as per the Howey Test.
That said, it would certainly bring them under the scanner like in the case of Ripple and Tether. After every bear market, there has been rigorous innovations which fuel the bull run. We have already seen that post the ICO boom, bear market and the rise of DeFi and NFTs during the soon passed bull market. Likewise, the same may follow during the next halvening due for 2024 and new use-cases emerging. However, if that happens where projects might be apprehensive of a witch hunting at the hands of the watch dogs, more cases like BlockFi will emerge where they had to pay $100 million in fines and settlements. Hence regulation may end up as an evil for the crypto market.
Is Regulating Crypto A Necessary Evil?
At this point, regulation is a necessary evil since we have seen high volatility. Bitcoin over the years have lost on an average 75% to 80% of value from the ATH during bull run. Likewise other assets have followed in the same footsteps. If amicable regulations do not make way into the crypto market, it would restrict participation and somewhat dilute retail investor’s trust in this asset class.
All thoughts expressed are personal and shouldn’t be taken as investment advice!
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