Crypto Exchanges: Slow Shift to Classic Financial Industry Regulations?

Crypto Exchanges: Slow Shift to Classic Financial Industry Regulations?

Ever since Bitcoin saw the dawn of the day in 2008, the crypto industry has come a long way.

Over a decade later, there are hundreds of different cryptocurrencies available in the market and numerous exchanges and trading platforms spread across geographies and time zones.

While the industry has come a long way, thanks to increased adoption there are still concerns surrounding the legitimacy of various platforms and projects and a lot of people continue to look at cryptocurrencies suspiciously.

These suspicions are rightly placed, and the main reason for that is the lack of accountability on the part of platforms dealing with cryptocurrencies due to absence of regulations governing it.

The lack of clear regulatory framework and enforcement not only encourages the operation of fraudulent platforms but exposes the crypto sector to far serious issues like money laundering and financing of illicit as well as dangerous activities.

When come to light, it ends up causing more harm to genuine crypto users due to clampdowns and other restrictive actions of governments.

In the recent days, there have been numerous reports of investigations and arrests in the crypto industry mainly due to violation of AML legislation.

These violations are rampant in the industry as a recent CipherTrace report states that over 56% of crypto exchanges don’t satisfy AML and KYC requirements.

Combining non-compliance with the fact that over 70% of Bitcoin transactions were cross-border transactions and a significant portion of criminal funds continue to pour into these exchange platforms makes a good case for the need of crypto regulations that are akin to those followed by traditional banking and financial institutions.

Echoing these revelations, the founder of STEX Vadym Kurylovych says: “Many crypto holders claim that the tightening of regulations in the crypto industry destroys the whole idea of the industry: fast, secure, anonymous money transfers without banks or state borders”.

But it is not about destroying the primary cryptocurrency idea, he says.

“It is about the industry maturing. Bitcoin is rising in price, other cryptocurrencies as well. DeFi is a hot topic now. This attracts more and more people to the industry, making cryptocurrency turnover bigger from year to year”.

That is why the governments and regulatory bodies need to find ways to stop money laundering and illegal activities that may occur if the exchanges will not follow KYC/AML.

The loud arrests and investigations against the prominent market players prevent other smaller projects from operating without KYC and AML, give the bad example, and encourage new startups to comply with financial industry rules. Although, it might not be 100% since digital assets are not regulated in every jurisdiction, he mentions.

While regulations are welcome in the crypto sector, the governments and regulatory bodies should attempt to strike a balance between control and ease-of-use, as well as ease of doing a crypto business to create a thriving financial ecosystem.

For most part, many crypto players choose to be non-compliant to avoid the costs and sometimes even the bureaucratic hurdles that accompanies the licensing process under some of the current regulations.

However, that shouldn’t be the justification for non-compliance as getting caught doing so can have serious repercussions.

In fact, crypto exchanges should proactively ensure compliance and acquire the required licenses even if that means additional expenses to address issues related to money laundering, terrorist financing and other illegal activities for the greater good.

In Kurylovych’s words, “It is easier to be non-compliant, of course. You do not lose new users because of the complicated onboarding process. You do not have to pay the compliance team and obtain the expensive licenses”.

However, he contends, that is not right if you do not know who your users are and if they are trading to earn money to finance some horrible illegal activities, like terrorism.

“You can also be the subject of the penalties from different regulatory bodies if you accept the funds from other nationals, not only from the countries where you are licensed”, he emphasizes.

For example, you can be seriously punished by the SEC if you accept American traders on your exchange without having a Money Transmitter License or passing the registration procedure in the United States Department of the Treasury.

“For instance, STEX is licensed in Estonia, and we are compliant with the EU cryptocurrency regulations. Estonian jurisdiction is one the most progressive in Europe regarding cryptocurrencies”, he adds.

Weighing the pros and cons, it is evident that regulations are necessary for the crypto industry to prevent criminal activities and also to ensure the safety and security of the users’ investments.

And currently, some countries have regulations that are more favourable to the industry compared to others.

In order to bring in uniformity, it is time for the governments to put their heads together and frame crypto-industry friendly regulations so that the crypto exchanges and services providers across the world can operate legitimately, in compliance with the legal frameworks of respective nations, just like traditional financial institutions.

What is STEX?

STEX is one of the most innovative exchanges in the cryptocurrency industry.

stex

The exchange is run by Etna Development, an Estonian-based financial firm, which is one of the few European countries that have laws granting licenses to digital currency exchanges.

The platform prides itself on its unique user interface, flexibility, transaction speed, and top-notch security. In addition, it has the support of major financial merchants such as Visa and Mastercard.

Stex primarily focuses on Initial Coin Offerings (ICOs) and altcoin trading, making it a favorite for traders looking for lesser known coins.

The exchange started operations in May 2017 and currently has more than 300,000 users on its platform.

Furthermore, it aims to simplify trading for crypto enthusiasts by using a single user interface and providing a license for activities on its platform.

It is a centralized exchange with good security and reliability , as it has not been hacked or violated since its inception.

Do you want more information? Visit STEX.

Website : https://www.stex.com/

Facebook:  https://www.facebook.com/stex.exchanger/

Twitter:  https://twitter.com/StexExchangeR

Telegram:  https://t.me/joinchat/AAAAAELA-2puemW2u6QryQ

Medium:  https://medium.com/@stex


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Disclaimer: This press release is for informational purposes only, the information does not constitute investment advice or an offer to invest. The opinions expressed in this article are those of the author and do not necessarily represent the views of CriptomonedaseICO, and should not be attributed to CriptomonedaseICO.


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