Japan’ Financial Services Agency have today suspended two exchanges, and ordered five other exchanges to improve their security and money laundering systems.
The news has caused the market to once again drop in price which has happened on numerous occasions since the start of the year. Bitcoin’s price has fallen to just over $9,300 after it had looked as if a recovery was beginning when it was priced over $11,600 on 5 March.
News of crackdowns and more regulation from all over the world have caused the Crypto market to drop in price over the past 3 months. But is regulation a bad thing?
It appears that most governments do actually recognise that blockchain technology is here to stay. The USA are taking measures to introduce more regulation in a market that has up until now enjoyed the freedom to operate exactly as it pleases. The USA have however stated they are open to the Crypto market provided it has proper safeguards in place. At the moment the USA and many other countries including Japan, South Korea and the UK, are targeting ICO’s exchanges.
Governments want ICO’s to be properly regulated to prevent fraud. At the moment anyone can make an ICO that never goes anywhere apart from taking consumers’ money. They are also focused on exchanges who are not compliant with ‘know your client’ and money laundering checks.
In effect, governments want more control over a market that has grown exponentially but this doesn’t mean the end of Cryptocurrencies. I strongly believe Cryptos are here to stay. There will be hurdles to overcome but the technology is just so advanced, offering solutions to a number of problems, that I believe it will succeed.
Whilst regulation isn’t in itself a bad thing, I think governments and regulators should be careful in the way hey decide to regulate the Crypto market. We do not want decentralized blockchains becoming centralized. It is therefore important for governments to understand Cryptos before they seek to implement tough regulations.
2018 will be the year of regulation in the Crypto market and it will be interesting to see how the market reacts long term to further regulatory news.
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