Regulators from all around the globe have recently targeted bitcoin businesses. Binance, for example, has been banned in the United Kingdom and Malaysia, while BlockFi has been prohibited in many places throughout the United States, and all exchanges have been outlawed in China. This is because of increasing regulatory worries over cryptocurrencies, as well as bank lobbying, both of which should fade as cryptocurrencies mature.
The regulation of cryptocurrencies seems to be the primary focus of media coverage on regulation throughout the globe. Many people are unaware, however, that cryptocurrency-related businesses have been investigated by major global governments and accused of selling unregistered securities, among other things. Investors from all around the globe would have a tough time participating in the cryptocurrency market without these businesses, which bridge the gap between conventional money and decentralized finance. Perhaps even more essential than cryptocurrencies themselves is efficient regulation of crypto companies.
Regulators and banks have been waging an increasingly difficult fight against businesses. Regulatory concerns, as well as the increasing danger of money laundering and cyberattacks, have led to countries banning the Binance exchange. Furthermore, several states in the United States have outlawed the bitcoin lending site BlockFi, including Kentucky, New York, Texas, and New Jersey.
Despite the fact that this pattern is concerning and does not speak well for the future of cryptocurrencies, both businesses are contesting their bans and have sufficient evidence to support their claims. The states that are prohibiting BlockFi from selling unlicensed securities are providing the firm, which plans to go public in 2022, the opportunity to reply and demonstrate that they are not selling unlicensed securities. Most likely, these prohibitions are the result of governments that don't know how to regulate cryptocurrencies adopting an excessively harsh approach at first, then gradually easing their restrictions as they get a better understanding of blockchain technology.
BlockFi assures its customers and investors that they are not violating any securities laws and that business will continue as usual. BlockFi, being a New York-based financial services business, is subject to some of the country's most rigorous laws, and should be able to satisfy the financial standards of other states with ease. Furthermore, the fact that BlockFi is raising money in their Series E investment round is encouraging, since venture capital companies believe BlockFi is a genuine business that will one day be listed on the New York Stock Exchange.
Banks all around the globe are partly to blame for pressuring authorities to take action against cryptocurrency firms. For example, one of the most anti-crypto legislators in the United States, Brad Sherman, gets $100,000 from banks and exchanges every year, implying that he is working in the banks' best interests in order to keep collecting their contributions.
Companies that are on the wrong side of new technology must, in most instances, adapt or go out of business. Some institutions, such as JP Morgan and Goldman Sachs, have adapted to crypto, while others just refuse to recognize it. No matter how much they fight for restrictions on their rivals, those who refuse to recognize that blockchain technology will alter the financial sector will be left behind.
Regulatory worries around cryptocurrency businesses are likely to be resolved over the next few of years. Due to the ongoing development and maturity of blockchain across the globe, the US will be under pressure to relax restrictions in order to guarantee that its people can remain at the forefront of technology and a global leader in blockchain.
Though the current drive for bitcoin company rules seems to be endangering the cryptocurrency industry, it is expected to go away in the future years. The bitcoin industry is still a wild west, and in order to bring blockchain and cryptocurrencies to the people, regulation is required. It will be very bad for crypto if regulation is tight and businesses like BlockFi are banned from operating in the United States. However, it is much more probable that banks will begin to accept cryptocurrencies more widely, relieving Congress of the pressure they are exerting, and that adequate regulation will be established.
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