A Lack of Trust

Ensuring Full Compliance

We’ve all heard the saying that “ignorance is bliss” at some point in our lives, but this term most certainly does not apply to the financial world. In the financial sphere, ignorance is risk, not bliss. It’s for this very reason that traditional financial markets are regulated. The US markets are more than happy to see reasonable regulation, as it ensures a suitable level of transparency and fairness. When it comes to stocks, we see regulation by the Commodity Futures Trading Commission (CFTC), and government-issued currency is overseen by the Department of the Treasury and the Federal Reserve.However, we’ve recently seen the emergence of another asset class, known as cryptocurrencies, and for the time being there is no single cryptocurrency regulator overseeing matters. This had lead to uncertainty and a lack of trust from the more established financial players. While we’ve seen the Securities and Exchange Commission (SEC) announce the appointment of a “crypto czar” in Valerie Szczepanik in June, with the task of working out how to apply the application of US financial regulations and laws to cryptocurrencies, it’s fair to say that this is still very much a work in progress. Until such a point is reached where the various governments can step in and get a handle on matters, we just have to accept that the cryptocurrencies world is a modern equivalent of the Wild West, right? Well, maybe not.As mentioned, the lack of cryptocurrency regulation isn’t something that reputable players in the industry are happy about, and with that in mind, we’ve seen some platforms and exchanges take matters into their own hands and look to bring a level of self-regulation into their business. One such company is London-based Archax, who has only recently announced a partnership with Aquis technologies, which is the financial and regulatory technologies service arm of Aquis Exchange. Archax has unveiled their new trading platform targeted at institutional investors. The type of investors who are used to operating in a “regulated manner” and who have perhaps previously viewed digital assets as being volatile and unreliable. We’ve seen a similar approach taken by Liechtenstein-based exchange ETERBASE, which has headed up a leadership team that boasts many years of experience at the highest level of the traditional finance world. Only recently ETERBASE obtained regulatory assessment in Liechtenstein and was quick to comply with the EU General Data Protection Regulations (GDPR) to ensure full compliance. So, while there’s no official government stance on crypto regulation at this time, it is comforting to know that there are exchanges out there who are holding themselves accountable rather than taking advantage of a lack of rules and regulations.

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