Crypto Regulation: What Was and What Could Be

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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.

Operators in the Crosshairs as New Austrian Regulations Loom

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The Ministry of Finance in Austria is in the process of scrutinizing the Gambling Act in the country in a bid to introduce some new amendments that will certainly have a huge impact on the country’s local online gambling market. To be more specific, the revised Gambling Act would potentially ban all the foreign gambling operators and even go as far as requesting that the operators to refund the players for all the losses they have accrued at the said casinos for the past 30 or so years.

This Ban Is Not the Solution

Perhaps one of the most notable aspects of the revised Gambling Act is the proposition that the all the Internet Service Providers (ISPs) in the country should ban the IP addresses belonging to all the gambling operators that are currently operating different online gambling business to Austrian gamblers. Just like in Germany, all of these online gambling sites are not sanctioned by the state and it is, therefore, safe to say that they are operating in a grey area. As such, all those that have stopped or are planning to stop marketing their services and products in Austria are to be blocked.

This does not sit well with quite a number of people. Without reading too much into the situation, it is quite clear that the ban will effectively create a monopoly which will favour Casino Austria, which, as it turns out, is the only site that is licensed in Austria – Casino Austria is also partially owned by the Austrian government. Experts and avid followers of the casino industry believe that the move to ban other reputable operators will have negative effects on the industry and ultimately drive the gamblers to unregulated and unlicensed sites.

Even though it is rather obvious that the IP ban will go against the spirit of freedom for service provision in the European Union, the Austrian ministry of finance is hell-bent on seeing it through. This resulted in an idea that the ministry hoped would keep unlicensed foreign operators away and prevent them from trying to find a workaround to bypass the ban.

To be more precise, the ministry proposed that all contracts between players from Austria and unlicensed operators over the past three decades should be considered to be null and void. The operators would, therefore, have to return all player loses since the period stipulated by the proposed plan. Still, the legality and enforceability of this law are still highly questionable, the Austrian Ministry of Finance hopes that the threat alone will serve to keep foreign and unlicensed operators at bay.

There are a number of companies that are already getting ready to fight for their rights using all the legal resources they have. All of these operators have no issue paying their dues but they are not willing to allow the country’s authority take advantage of their power in order to create a monopoly something that even the European Union itself will not accept as well.