Institutional Investors' Peace of Mind For Crypto Exchanges Requires More Than Self Regulation

Institutional Investors Require More Than Self Regulation On Crypto Exchanges

As there is barely any regulatory oversight on the cryptosphere, investors are looking for ways to self-regulate in attempts to make the industry more attractive to institutional investors, some of whom are cautious of entering the market due to the potential for hacks and fraud.

Although interest among the institutional investors is growing, the industry is plagued by fraud and regulatory uncertainty. As for numbers, in the second quarter of 2018 investors lost $670 million in cryptocurrencies due to hacks and scams.

To change this, two new groups have emerged. One is the Virtual Commodity Association (VCA), the industry’s first self-regulatory organization, which was launched by the Winklevoss brothers’ Gemini exchange, Bitstamp, bitFlyer USA, and Bittrex this past August. The second group, the Blockchain Association, is comprised of companies like Coinbase, Circle, Digital Currency Group, Polychain Capital, Protocol Labs, and Zcash, and concentrates on topics such as tax treatment of tokens and consumer protection.

However, not everyone thinks that these establishments are on the right path. Take Joseph Moreno for example, a partner in Cadwalader’s White Collar Defense and Investigations Group, say the idea of self-regulatory organizations may not be very effective. Moreno contrasted the self-regulating nature of the VCA with that of Financial Industry Regulatory Authority (FINRA), a self-governing body which is authorized by Congress and supervised by the Securities and Exchange Commission (SEC). He is of the opinion that self-regulatory groups will not have any governmental-like regulatory authority to bring enforcement actions.

Not everyone in the crypto world is open to self-regulatory organizations like the VCA and the Blockchain Association, which, to many, go against the concept of decentralization that is at the core of blockchain-based digital currencies.

Nonetheless, the reasons for these organizations coming up in 2018 are obvious. We have seen governments across the globe looking with increased scrutiny at the industry in attempts to regulate from the outside in. Notably, earlier this year we saw this in the form of cease-and-desist orders and even blanket bans against cryptocurrencies. In just the past few months, the SEC and FINRA have issued a string of disciplinary actions against companies involved with virtual currencies.

Get Free Email Updates!

*Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

I will never give away, trade or sell your email address. You can unsubscribe at any time.

Avatar
Bitcoin Exchange Guide News Team
B.E.G. Editorial Team is a gracious group of giving cryptocurrency advocates and blockchain believers who want to ensure we do our part in spreading digital currency awareness and adoption. We are a team of over forty individuals all working as a collective whole to produce around the clock daily news, reviews and insights regarding all major coin updates, token announcements and new releases. Make sure to read our editorial policies and follow us on Twitter, Join us in Telegram. Stay tuned. #bitcoin

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer

LEAVE A REPLY

Please enter your comment!
Please enter your name here

3,468FansLike
2,795FollowersFollow
4,196FollowersFollow

Live Bitcoin Price & Latest BTC Charts

Today's Latest Crypto News

IRS Criminal Investigation Division Wants to Track Privacy Coins, Layer-2, and Sidechains

It has been no secret that the top federal law enforcement agency under the U.S Department of Treasury, the Criminal Investigation Division (CI), is...

US Court Tosses Appeal in Child Exploitation Case; Accessing Coinbase Account Didn't Violate Fourth Amendment Rights

Richard Gratkowski, convicted of purchasing and receiving child pornography, and accessing websites with an intent to access child porn, was sentenced to 70 months...

Lebanon’s Fiat Currency, the Lira, Drops 50% of Its Value in 10 Days Due to Hyperinflation

Lebanon's financial crisis is only deepening with each passing day, as the country is engulfed in hyperinflation. An unofficial report suggested that the value of...

Bitcoin-based Startup Zap Opens Strike for Public Beta And Plans to Release Visa Rewards Card

Jack Mallers, Zap founder, revealed on Thursday that Zap’s Strike product, which enables individuals to receive Bitcoin in US dollar form through direct bank...

Techemy Capital Plans To Launch Compound (COMP) Investment Portfolio for Yield Farmers

Techemy Capital, a New Zealand based digital asset investment firm and fund management, announced the planned launch of new DeFi strategic investment products next...

BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.

Start Using Crypto Today