Perspective of cryptocurrency regulation
To become the new equivalent of gold, cryptocurrency must have institutional money and regulation. International funds have already started to invest in the crypt, but so far it has not become a massive phenomenon. Regulation of cryptocurrencies is inevitable. There is such a thing as «smart regulation». Like seat belts in a car, the regulated cryptocurrency market provides more protection for ordinary users.
Features of cryptocurrency regulation
Cryptocurrency platforms are obliged to protect their users from intruders and implement KYC and AML to prevent financial crimes. Confidentiality is a human right, and identity data (PII) should be subject to a strict level of protection in accordance with applicable rules and personal data protection. Cryptocurrency users have the right of access to exchanges that provide security for their funds and have a system of funds insurance. Markets must maintain a high level of liquidity to ensure a stable and free trading environment. Regulation and innovation are not mutually exclusive. Cryptocurrency users should have secure access to new technologies, including NFT, steablecoins, steaking, profitable farming.
KYC as a part of cryptocurrency regulation
The KYC process usually coincides with the client’s registration. However, changing your personal data will also force you to re-identify. Typically, KYC is based on the following principle – the more data provided by the user, the higher the level of trust, which opens up more services and capabilities. Accounts that fail verification are usually restricted as follows:
lack of access to margin trading;
reduced limits on deposit and withdrawal;
high commission maker/taker;
lack of access to the P2P market;
no withdrawal of funds to the bank card is available.
Cryptocurrency regulators SEC and FinCEN
Bitcoin was created as an anonymous, decentralized currency. The transmission of user data to the centralized exchange completely negates the ideas that were originally in the crypt. Supporters of virtual coins believe that exchanges merge with law enforcement agencies in a single apparatus that makes tokens look like a common means of payment.