Regulations Can Help Bring Legitimacy To The Crypto Ecosystem Says ERC dEX Founder
While many people in the Blockchain ecosystem are pushing back against the regulations around the globe, ERC dEX founder David Aktray is of a contrary view. “The hammer is coming down in 2019,” he says.
David Aktary says exchange operators should get the message that the “SEC is taking all crypto-securities (registered and unregistered) trade seriously and everyone should get in line.” For his part, he says ERC dEX have actively been in the process of implementing KYC and AML for some time.
“We have partnered with a FINRA-registered Broker-Dealer/ATS to be able to list securities compliantly,” he says. “Many of our competitors believe that because they're non-custodial, they are immune to enforcement. I think the action against EtherDelta proves that position wrong.”
He suggests that providing KYC compliance will allow his exchange to accommodate large crypto funds wishing to trade on the platform; creating more liquid markets that benefit all users of the exchange. Aktary suggests that compliance policies will open up the market to a larger pool of players.
“Many, if not most, institutional funds will simply not use a platform that is not compliant because those funds have their own compliance policies to adhere to. They also have limited partners that they need to be able to assure they're not trading with bad actors. That can't happen without the assurance that their counterparties have all been through KYC/AML. What's exciting about this is that implementing KYC/AML means a whole new swath of large liquidity pools can form in the DEX space that we haven't seen yet,” he says.
He has been keeping a close look at the state level regulations. He has noticed that Wyoming has been tweaking some of their laws to attract crypto businesses. Although this doesn't protect the issuer or the business from the “wrath of the federal government.” To him, all this feels a bit like the problem with marijuana legalization.
Regulation D enables small businesses to foster capital through the sale of equity or debt securities without being registered with the SEC. Reg CF permits private companies to raise up to $1 million from American adopters through platforms like Kickstarter and GoFundMe.
“Issuers are starting to ‘play ball’ by issuing tokens under regulations like Regulation D and CF. Exchanges, too, are playing catch up at this point, so that when Reg D issuances are out of their lock-up period, they will have a registered venue upon which to trade,” he says.