Cryptocurrency gained attention in the year of 2013, When a Norwegian person named Christopher Koch sold 5,000 Bitcoins in $ 886,000 which he bought the same quantity for $27 only in 2009.
Similarly, In the month of January, One Bitcoin market worth $ 930 and in September 2017 it climbed up to $4,170 there was an increase of 348% recorded. However, Ethereum price was about $8 in January which grown up to $290 in September. The Ethereum price rise accounted 3525 % high.
At one side, Cryptocurrency was gaining popularity and on the other side, it has been happening incidents of hack, theft, and loss of currencies.
The biggest of all times hacked story, is about Mt. Gox, the leading Japan Bitcoin exchange claimed of holding 70% Bitcoin in the world. Approximately 850,000 Bitcoin stolen, worth of $460 in 2014 among which only 2020,000 recovered later. From April 2014, Mt.Gox exchange began the process of liquidation. In 2016, Creditors claimed $2.4 trillion loss when Mt. Gox went bankrupt.
Ethereum (ETH) founded in 2015. It is currency token used in ETH blockchain. In 2016, it was thieved by the hacker from that so it is divided into two currencies.
All these events led to take security measures which minimize risk of loss of currencies.
Considering the occurrence of such kind of events, countries began to take safety measures that need to develop regulation for cryptocurrency
What are Regulations?
Regulations are rules based on some frameworks for specific sectors enforced by a regulatory agency like SEC Securities & exchange Commission to carry out regulatory requirements. The purpose of regulation is to protect investors and customers in the financial market.
How does SEC Regulations Affects cryptocurreny?
The regulator agency deals with cryptocurrencies that should affect in two ways. One, if concerned authority is decided to ban cryptocurrencies this could de- value cryptocurrencies. Second, People show their least interest to invest into this digital currency and blockchain technology companies would stop to get into them.
Cryptocurrency regulations around the world:
Recently US SEC announced an investigative report details of DAO, issued Initial Coins Offerings (ICOs), new cryptocurrency token is offered to the public for sale. This blockchain company raised fund issuing the DAO token and then this fund utilized in different business Ventures. The DAO raise $150 million worth of ether from 11000 investor but unfortunately $50 million dollars of ether was stolen.
For regulatory purpose, SEC created criteria based on “Howey test” which determines that is certain transactions constitutes “investment contract” under the securities act of 1933 as a treatment to fulfill regulatory requirement
It is also specified that it DAO offering is dividend style payouts for token holders so on these basis, it doesn’t exempt from being a security. Investors will need to ensure that whatever they are buying is compliant with United States Securities laws
The People’s Bank of China (PBoC) multiple times banned the activities of cryptocurrency It made mandatory for Bitcoin Chinese Bitcoin exchanges adhere to current banking and Anti-money laundering laws & KYC Know Your Customers.
Recently PBOC announced ban on initial coins offerings and passed strict instructions that no financial body linked with Initial coins offerings (ICOs) under argued that cryptocurrency is high volatility & project financing cannot be secure with this kind of currency. Project financing in view of an unpredictable digital currency additionally involves risk.
On September 0 4 2017, In an official message announce that all ICOs Initial coin offering activities should be banned immediately with an instruction that no blockchain company buy or sell digital token and instructed Telecom operators stop servicing which are related to illegal plate forms. Furthermore, it is also instructed to delete websites and mobile app of these ICOs from market places.
South Korea also clearly stated to act against illegal ICOs and emphasize on the establishment of regulations for conducting fundraising business on digital currency trading exchanges.
Global level issues relating to virtual currencies led to the formulation of regulations. European Union, in the beginning, of cryptocurrencies, European Union did not consider it as a currency, they termed it a commodity. Gradually, with the acceptance of cryptocurrency at a large scale on global level. European Union accepted its existence as decentralized digital currency.
In January 2017, European Union proposed Regulatory measures to prevent AML and terrorist financing can be executed by cryptocurrencies
France made it mandatory for exchanges to report all Bitcoin transactions with identify of parties involved.
In Aril 2017, Japan adopted Regulations for cryptocurrencies to protect users against large market collapse like MT Gox. It expanded a stable environment for cryptocurrency expansion in country this credited investor confidence who wish to invest with the security of the government stamp of approval.
Buy and Sell Cryptocurrencies – Start Trading
>> Open Account on Recommended Website <<