One of the reasons why the cryptocurrency market thrived in the past is that the decentralised nature of blockchain technology made it a safe option for investors who wanted to conduct their affairs free from regulatory scrutiny. Since lack of regulation was key in driving a bull market, some experts believe that the sudden increase of regulatory pressure has contributed to the decline in the price of cryptocurrencies.
Securities And Exchange Commission Launch Full Attack On ICOs
In the beginning of 2018, the increase in the number of initial coin offerings was followed by an increase in regulatory pressure and for good reason. Many of the ICOs that were hosted at the time were shady offering no real value to unsuspecting investors who wanted to benefit from the cryptocurrency and blockchain frenzy. The number of ICOs that are being conducted on a monthly basis have dropped significant for many reasons. One of them is the pressure from the SEC and the declaration that ICOs are securities.
After William Hinman, SECs director of corporation finance said that BTC and ETH are not securities, the industry expressed a slight bullish sentiment. Still in 2018, the commissioner of the SEC, Hester Peirce issued a statement stating that the SECs disapproval of the Bitcoin ETF by the Winklevoss twins was a mistake. He said that this BTC EFT should have been approved. This led to a bullish sentiment in the cryptocurrency market.
Unfortunately, the United State regulators came for the industry again with full force making investors scared. The commissioner of the Commodities Future Trading Commission, Brian Quintenz, during a tech conference in Dubai, said that developers of decentralized applications can be held accountable when their apps are used for illegal things. This applies to every developer even if they only contributed a code that was used to make publicly available smart contracts.
What Does 2019 Hold For Cryptocurrencies Per Regulations?
Last year, the Securities and Exchange Commission attacked Paragon and AirFox claiming that they were unregistered securities. This shows that the SEC has enough juice to crackdown on many projects this year. Sources claim the SEC is currently investigating more than one hundred projects which it suspects to be unregistered securities. On the plus side, this will give investors more understanding about how the SEC regulates the industry or what they consider as securities.
The application for VanEck Bitcoin ETF that has been under consideration by the SEC for a long time was recently withdrawn by the 63-year-old investment firm. You see the deadline for the approval and disapproval of the Bitcoin ETF is February. Experts speculate that the company decided to withdraw the application due to the government shutdown rather than allow the date to pass. They will most likely apply again when the dust settles.
Bitcoin (BTC) Price Today – BTC / USD
There are so many things in play per regulations in the cryptocurrency industry. Even with that, there is still a lot of regulatory uncertainty in the industry. This is making things difficult for investors as no one wants to attract the attention of the SEC of the CFTC in the United States.
Do you think regulatory stability will improve the condition of the market or will it drive investors further away?