Will Crypto Exchanges Withstand Restrictions?
This week, a lot of negative news about popular cryptocurrency exchanges was reported. Crypto exchanges’ representatives lose clients and the regulators impose sanctions against them.
It has become known on Friday that the number of users of Coinbase in US reduced by 80%. Same day, a large platform Bitfinex paused acceptance of fiat currencies: Dollar, Euro, Yen and British Pound. Also, it was reported that the hackers have stolen almost a billion dollars from cryptocurrency exchanges in 2018, this is almost 250% more than in the last year.
Cryptocurrency exchanges experience various problems. In addition to technical issues and cyber attacks, the regulators influence them. Earlier, trading was carried out via the network of exchanges located all over the world, the parties to the deals remained anonymous. However, the boom in the cryptocurrency market that took place last year and rapid increase of prices of bitcoin, Litecoin and Ethereum drew regulators’ attention to crypto trading.
Regardless to attempts to regulate crypto industry, the paces of its development are too fast. The current regulator’s attitude towards cryptocurrencies is still unclear.
The experts note that appearance of regulatory directives will make the industry similar to other financial markets.
However, exchange operators are already considered as financial organizations are already controlled by FinCEN. SEC considered some cryptocurrencies and tokens as securities. CFTC considered digital assets as goods, FINRA held a demand against an individual, accusing him of promotion of unregistered cryptocurrency securities.
That’s why the crypto platforms have to develop and implement reliable programs ensuring observation of law.But it will take any exchange a lot of time and money.
The experts note that the number of cryptocurrency exchanges will significantly reduce in 3 years.