Crypto Regulation: What Was and What Could Be

2018 was without a big year for cryptocurrencies as a whole particularly because it saw through a number of developments that kicked off in late 2017. There has been an equal measure of ups and downs in the crypto space which, in one way or the other, have been key to the growth of the industry. Keeping all that in mind, one of the key considerations that many people had in the last year and are looking to improve upon is regulation. With more and more institutional investors streaming into the blockchain and crypto space, there has been an outcry for increased regulation which is expected to be a key driver of the crypto bear market of the past year.

Most of these investors also blamed the initial coin offering (ICO) market’s cool-down on potential threats. To put this into perspective, in October 2018, initial coin offering issuers collected close to $770 million, which is a 50 percent drop of what they raised in December 2017. Apparently, this slowdown was a result of continued pronouncements by SEC Chairman Jay Clayton that said ICOs are securities which imply that those that do not register with the SEC would face dire legal consequences.

What This year Holds

One thing that we can all agree on is that 2019 will certainly be the year that crypto regulation climbs to greater heights. In essence, this means that it is likely that various crypto regulations will become a defining move for such organizations as the Securities and Exchange Commission (SEC) as well as other financial bodies in all parts of the globe. While some crypto-related businesses may be reluctant to follow the SEC’s rules, existing regulations are already taking a massive toll on a number of crypto businesses and this is likely to increase further as the year progresses.

Regulation, as always, is always going to be double-sided phenomena. On one hand, existing and future regulations may inhibit innovation – some companies may close their doors and others may avoid starting up altogether. The main takeaway here is that we might go through a transition period where companies and businesses that are not able to play by the rules will be forced to step aside.

On the other hand, proving that cryptocurrencies do indeed have some legitimacy might actually be easier with more regulation in place. Already, the entry of institutional investors is starting to becoming a big deal for people who were skeptical of crypto. It is well known that the borderless and anonymous nature of cryptocurrencies makes them nearly impossible to control but with more regulation, reasonable solutions are certainly bound to be found.