While there have been many attempts at regulating cryptocurrencies, none have been as successful as the United Kingdom, which is similar to the EU. While regulators are hesitant to take on any new regulations, they acknowledge that they are coming. The U.K. Treasury is worried that the number of stablecoin firms is too high, so they are considering measures to end the anonymity associated with crypto trading. While the situation is uncertain, a ban on Bitcoin would be extremely unpopular.
The SEC and the CFTC are tasked with policing cryptocurrencies, which isn’t very clear. Both agencies are concerned with anti-money laundering and terrorist financing, and they both have issued guidance to help businesses adhere to those laws. However, state governments are more concerned with consumer protection and are working on enacting new legislation. Regardless of the outcome of the SEC’s investigation, regulators are embracing this new global currency.
There are two types of regulatory bodies focusing on cryptocurrencies. The federal government is concerned with the risk of money laundering and terrorist financing. To combat this concern, the Treasury Department issued guidance for Bitcoin businesses. The states are more focused on consumer protection and regulation. In the U.S., some businesses must be licensed as money transmitters. This will require them to provide a number of documents to prove their legitimacy and avoid getting in trouble with the law.
The Financial Services Agency has announced plans to penalize some cryptocurrency exchanges. If the regulator finds that there are flaws in anti-money laundering and consumer protection measures, it will likely force some exchanges to suspend operations. The CFTC’s plan to shut down some exchanges is a clear sign that regulation of the industry will continue. It may even be as broad as the president’s push to halt anonymous cryptocurrency transactions.
While the U.S. is still in the early stages of regulating cryptocurrencies, it is important to note that there are some countries where the financial regulators have not yet decided on their own. In Japan, the FSA is the first country to regulate digital currency exchanges. The FSA has since approved 16 exchanges and granted permission to others. It is monitoring the compensation plans of Coincheck. This is a crucial step in regulating the cryptocurrency industry.
The US isn’t the only country where cryptocurrency regulators have tried to stop the market, but it is a clear sign that they are taking steps to protect consumers. South Korea is the most recent country to implement a digital currency regulator. The South Korean government has regulated 16 exchanges, with an additional 16 being granted permission to operate while the agency processed applications. The FSA is also monitoring compensation plans for Coincheck, a South Korean exchange.