Regulation Is the Future for Crypto Exchanges


The level of maturity that cryptocurrency has now reached is remarkable, especially considering that it has been developed by enthusiasts and mined by members of the public for 11 years, which is the blink of an eye compared to the hundreds of years that it took the traditional financial markets structure to develop and become accepted as the linchpin of the global economy.

It is clear, however that cryptocurrency is not only here to stay, but is the method of financial infrastructural influence that is at the forefront of the development of the entire global financial system, as demonstrated by its multi-trillion dollar uptake and influence by some of the world’s most important market movers, including the world’s richest man Elon Musk.

Equally, it is feared by traditionalists and politicians, as its empowerment of the wider global community is affront to controlling measures and political power over people that has been wielded by governments the length and breadth of the globe, further demonstrating its importance and power.

Therefore, it is only a matter of time before regulation will be required for all cryptocurrency activities and today’s moves by governing bodies is no exception.

Elliptic’s analysis of US regulatory enforcement actions since the birth of Bitcoin in 2009 shows that USD 2.5 billion in penalties have been imposed against firms and individuals dealing in cryptocurrency. The majority of these penalties relate to unregistered securities offerings (USD 1.38bn), fraud (USD 928m) and anti-money laundering violations (USD 183m), the blockchain analytics firm.

Banco de Portugal, Portugal’s central bank has this week confirmed that it has issued licenses to two cryptocurrency exchanges for the first time since its new crypto trading law took effect, allowing them to now operate in Portugal, and in Britain, the Financial Conduct Authority (FCA) has allocated even more resources toward assessing applications to the cryptoasset register.

Clearly, in areas with developed financial markets structures, cryptocurrency will likely fall under a series of advanced regulations which will make the entire cryptocurrency system sustainable long term and is therefore a good thing.

CoinMetro has been well ahead of the curve in this respect, having been a fully licensed and regulated cryptocurrency exchange since 2018 and is a firm advocate of regulated cryptocurrency infrastructure.

Back in late 2018, CoinMetro played a role in the advancement of cryptocurrency regulation by holding an event at the firm’s Tallinn-based offices during which CoinMetro urged the Estonian Finance Minister’s office to take action to raise the bar on its VASP licensees.

By paving the way forward for regulation, cryptocurrency exchange operators and participants are forming the entire electronic financial market infrastructure of today and tomorrow.