Regulation and the Future of the Crypto Industry*
Regulation will straighten up a lot of irregularities presently bedevilling the crypto space.
*ICOs may be completely banned.*
The implication of an outright ban on ICO is that fraudsters won’t have free license to harvest free money through ICO scam in the guise of the next big blockchain project.
Blockchain projects seeking early stage funding may have to source for funds from Venture Capitalists and or Angel Investors.
*Cryptocurrency Exchanges* may come under *heavy regulation and supervision through the issuance of operating license* where every coin or token applying for listing must meet certain minimum standard before being considered for listing.
For instance, if ICOs are banned, all coins or tokens which raised money through an ICO may not be qualified for listing on any licensed exchange. As erring *will lead to withdrawal of operating license.*
*Tokens may be classified as securities*
If Tokens are classified as securities, the implication is that anyone who participates in an initial coin/token offering automatically becomes a shareholder of the business proportionate to the amount invested, which also means you are entitled to a be paid dividends and not just a coin or token holder.
If Coins or Tokens sold during an Initial Coin Offerings are classified as security; another implication is that *individuals may not be allowed to directly invest in them,* similar to what’s obtainable in Initial Public Offering and the *Stock Exchange* where institutional investors and individuals can only invest through *Certified Stock Brokers.*
Considering the unique nature of cryptocurrencies, a special body may be created which will make rules and guidelines that are specifically designed to regulate cryptocurrencies and the entire ecosystem.
*Exchanges will come under serious regulation and supervision*
Although, some level of transactions can be done Over The Counter (OTC), cryptocurrency exchanges remain the main gateway between the fiat world and crypto the world as they provide liquidity for high volume transactions. Hence they will be heavily regulated to prevent money laundering. This will require various level of Know Your Customer (KYC) and Anti Money Laundering (AML).
As you might have noticed, exchanges have started being strict about KYC.
Regulation of exchanges may lead to the delisting of *Privacy Focused Coins,* as seen in the delisting of some privacy focused coins after Japan’s leading cryptocurrency exchange, *Coincheck* was hacked and about $500m worth of NEO stolen.
Regulation of exchanges will also help sanitize the crypto space of scam coins, as it will be more difficult for scammers to find their way to exchanges and coin market indexing sites such as coinmarketcap.com and worldcoinindex.com
As for now, the US Securities and Exchange Commission stated that, *Ethereum ‘in Its Present State’ Is Not a Security,* however the future of other coins and tokens which raised money is yet unknown, but *in my opinion, each project will be analysed on case by case and concessions might be made*
The above analysis is based on what I think the future of crypto will look like from the US Government perspective, which I believe 2/3 of the developed world will fashion their regulation similar to whatever the US Government comes up with. *As for Africa, anything goes. We don’t even have an indigenous exchange to start with.*
Regulation will be a good thing for the future of crypto.
*#BitcoinForAfricaInitiative #MarketAnalysis #CryptoEducation #Bitcoin #CryptoAnalysis*