Is There A Need For Cryptocurrency Regulation?

Over time, the financial system in the entire world has evolved, and a significant part of the credit goes to cryptocurrency. Approximately 91% of the world population has heard the name “cryptocurrency,” and almost 60% are trying to enter this diverse universe. 

Bitcoin has excited the world of digital assets and made crypto so famous. Actually, it is the first virtual currency used for cross-border transactions. With this evolution, so many people have entered into it, but only a few understand it, which gives birth to crypto scams and illicit practices.

From October 2020 to March 31, 2021, according to the Federal Trade Commission (FTC) Consumer Sentinel reports, crypto-based scams escalated to approximately 7,000 people reporting losses of more than $80 million. These figures show a 12-fold enhancement in the number of reports compared to a similar period a year ago and an approximately 1,000% growth in reported losses.

Lawmakers worldwide have been struggling with the complex topic of crypto regulation for some time. The rambling cryptocurrency industry is recently worth over $3 trillion — and that’s one of the reasons why many people believe more oversight is required.

Crypto regulation can establish a structure for innovators. Suppose the rules and regulations regarding it are clear and transparent. In that case, the innovators feel motivated to create something more beneficial for crypto enthusiasts. Many crypto industries have taken a backseat and shut down because the regulations are unclear. Some feel fear of getting scammed or cheated. 

As said in the Harvard Fellow Timothy Massad’s Report, “better regulation will give an advantage to crypto investors and, moreover, the development of new technologies.”

The insertion of regulation will instill massive confidence in the technology itself. With this immense attention and engagement, it is moving towards the mainstream. And oversight will welcome the next wave of crypto-friendly institutions, and then users will be more interested in engaging with crypto. 

In simple words, regulation will enhance the reputation of digital assets, and a good reputation will give rise to an increase in demand. 

There are plenty of ways to start regulation in crypto, and one of the ways is by regulating the exchange. The LCX Exchange has taken the regulation and registration part very seriously, therefore; the Financial Market Authority of Liechtenstein regulates it. Not only this, but LCX is also registered as TT Token Depositary, Token Generator, TT Exchange Service Provider, TT Price Service Provider, TT Identity Service Provider, TT Key Depositary, TT Token Issuer in our name (Article 12(2) TVTG) and TT Token Issuer for third parties (Article 12(1) TVTG) under the provisions of the TVTG.

LCX, as a global fintech company, has ensured that every service that comes under its umbrella is regulated and law-abiding. That’s how you can take the first step in making the crypto universe more regulated. 

The future of cryptocurrency is enormous, and people need to trust and be confident that they are investing in the right sector. So why can’t it be turned from a threat to a saving grace by merely following the rules and regulations, as LCX did? 

Stay tuned to LCX Insights for more information on LCX and the new developments in the crypto universe.