If you think that things in the crypto world have been going quietly, you have apparently not following the headlines. For a while now, a lot of talk about heavier regulations have been floating about with people discussing the future of these assets, and they have all agreed, rather reluctantly on occasion, that people ought to come up with an underpinning ideas of all cryptocurrencies, if they are to make these assets work.
What really drives people towards the inclination that they must come up with a way to regulate the market? For starters, it is the spate of ill-meaning third parties that have been hightailing it with gullible people’s everyday FIAT money.
Not only that, but private companies have stepped up their own efforts in tackling and clamping down incursions by anyone who thinks they can justly influence the outcome of a crypto deal.
Let us put things in perspective here. Facebook and Google have decided to clamp down on all ads that invite people to invest in cryptocurrencies as long as they are spreading deceitful information. The announcement quickly sucked away $60 billion of all cryptocurrencies’ total worth. With this in mind, it is quite understandable why people have been agog to do something and to make sure that things are indeed going to be rather fraught if a more common framework isn’t worked out.
What will regulation bring?
What will regulation bring exactly is a fair question and one we need to ask ourselves more often. Regulation will in fact disperse one of the main tenets of all cryptocurrencies, which has made people to stick to them – anonymity. Why anonymity? It is simple. People clearly do not want to be taxed on what they earn and cryptocurrencies are a sure way to do that. However, there are complications as the number of crooks has been rising and these ill-meaning people have actually been breaching high-security crypto exchanges, which has given regulator teeth.
Now, what everyone wants is to make sure that transactions can be traced, not only because thieves do swirl around, but because every one in three bitcoin is today used to fund some sort of illegal activity, and this could be terrorism, trafficking in humans or just drug & arm trade.
Banks are massively pushing for KYC practices when it comes to crypto assets and that has clearly to do with the simple fact that more scrutiny in the sector is sorely needed. This will help legislator track all transactions and ensure the maximum security of the sector.
The Bank of England has been particular about this main issue that is that crypto currencies ought to stay on track with normal banking practices if they are to be adopted more widely.
What is the problem with lack of regulation?
When it comes to researching and delivering results in terms of cryptocurrencies, you will see yourself quite at ease and quite prepared to do everything that you may needed to do. However, regulation treads on one particularly unpleasant side of all things about cryptocurrencies and that is the legal side of it. With this in mind, people do not like to share information about themselves when it comes to cryptocurrencies.
That is utterly wrong however. Everyone should and should be prepared to pay tax on their earnings, nevertheless what form they take. If you are not a tax resident of a country where you are making your cryptocurrencies, you still need to give your due.
In addition, this is bothering many people. People would shout and scream the veil of anonymity as a sacred and underlining human right, but while people are suffering because we are too greedy to pay a tax on something we desperately cling to, we cannot rightly say that we are being objective and supporting a libertarian dream.
Au contraire, we are maintaining our own greedy élan that is bound to peter out at some point when the market comes crushing and weighs down everyone involved with it. Meanwhile, because regulators may be a bit slow to catch up with the basic idea that some people are not paying taxes on cryptocurrencies, said people may have lost all their assets in cryptocurrencies, but be by law still obliged to pay every single penny they owe(d) at the time of acquisition, which will have devastating consequences for people who kept their money safe and aside.
With this in mind, it is quite understandable why people today are concerned about their assets, but the best way to go about it is to make a clean breast out of it.