Cryptocurrency: Regulations to be Released End of June + Update on Bitcoin.
It seems like cryptocurrency is losing its touch in the market. The popularity of Bitcoin and other currencies is slowly surging due to the government.
The Financial Action Task Force (FATF) is a multi-government effort which develops plans and recommendation for fighting money laundering and financing of terrorism, followed by about 200 countries.
On June 21, FATF will publish a note to clarify how the participating governments should oversee digital tokens. These new rules will apply to businesses working with cryptocurrencies. Bitcoin exchanges, custodians, and crypto hedge funds will all have to comply.
June 21st will be a huge day for the crypto market. According to Eric Turner, director of research at crypto researched Messari Inc., “ [the rules are] one of the biggest threats to crypto today, their recommendation could have a much larger impact than the SEC or any other regulators have had to date.”
The rules which will be published by FATF will be interpreted by country-specific regulators. The recommendations will have to apply to all of the companies under the regulators.
The Effect of Regulations on the Industry
These guidelines will require all crypto related companies to collect information about customers. If users initiate transactions of over 1,000 USD or EUR, brokers will send all details of all participants to the service providers.
“It is either going to require a complete and fundamental restructuring of blockchain technology, or it’s going to require a global parallel system to be sort of constructed among the 200 or so exchanges in the world. You can imagine difficulties in trying to build something like that,” said John Roth. Roth is the chief compliance and ethics officer at a Seattle-based exchange Bittrex.
The results of these new rules could be drastic. The compliance costs will increase, costing many companies to shut down. “People in crypto like to make a big deal about giving personally identifiable information to the government, but I don’t see a whole lot of disruption for legitimate player s if the proposal is enacted,” said Phil Liu, the chief legal officer at Arca.
If a country does not comply with FATF rules, it will be placed on a blacklist, and will essentially lose access to the global financial system. These proposed regulations will impact more than 500 crypto funds, which began operations in the last couple of years.
Though agreeing on these regulations will take time, the industry will still take a large toll until all we learn more about the future of Bitcoin and crypto. The positive side is that greater oversight of the industry could lead to more institutional acceptance of crypto.
Update on Bitcoin
With this news spreading around the crypto market is already showing worry. The price of Bitcoin has been jumping all day long, making drastic ups and downs in the graph. The highest point of the day was $8,050.92 at around 1:20 PM, whereas the lowest point, was $7,916.280 at around 10:01 AM.
The difference of around $130 occurred within three hours. Bitcoin investors are unsure what do to with this still unregulated cryptocurrency since on June 21st everything could change.
It seems like cryptocurrency is losing its touch in the market. The popularity of Bitcoin and other currencies is slowly surging due to the government. The Financial Action Task Force (FATF) is a multi-government effort which develops plans and recommendation for fighting money laundering and financing of terrorism, followed by about 200 countries.