Service Providers Adhering to Regulatory Measures Bring More Legitimacy to the Cryptocurrency Industry

Service Providers Adhering To Regulatory Measures Bring More Legitimacy to The Cryptocurrency Industry

Regulation will play an increasing role of importance in the cryptocurrency industry. Whether one opposes or welcomes it, the outcome will often be beneficial for the broader industry. Several recent incidents confirm the need for extra measures to protect users involved with centralized companies.

Avoiding Shady Company Dealing

It is no secret that many governments and policymakers have a tough time dealing with Bitcoin and other cryptocurrencies. As a form of money that is outside of the control of governments and central banks, cryptocurrencies seem to live a life on their own. It is part of what makes the industry so exciting, yet it also dissuades certain newcomers from entering.

On the surface, it may seem as if the cryptocurrency industry is largely unregulated. Several recent incidents will only confirm that status. BitMEX is the primary target in an ongoing lawsuit, and its previous attempt to dismiss the case has not gone over too well. Several plaintiffs remain convinced the co-founders of BitMEX took $440 million from HDR Global, the company that owns BitMEX. As the investigation is still going, it confirms that these companies may need to be scrutinized further. 

A similar incident affects XRP, the native currency created by Ripple. There are still a lot of questions as to whether XRP is unregulated security, and if so, what the punishment for selling them should be. Policymakers can avoid all of these issues by creating a global regulatory framework to set the record straight. Unfortunately, that will not happen anytime soon, as most countries and jurisdictions take conflicting approaches to this crucial aspect. 

That being said, the uncertainty regarding regulation can be addressed by companies and service providers themselves. If these companies focus on being regulatory compliant, they will send a strong signal to regulators and policymakers worldwide. It seems as if companies are taking a more proactive approach in this regard lately. 

Regulatory Compliance is Essential

For any cryptocurrency company or service provider, adhering to domestic regulatory measures is only the first step. More often than not, these requirements will require companies to put together a legal and compliance team, as guidelines will always be subject to change in one way or another. The landscape is constantly changing in the financial sector, be it traditional finance or cryptocurrencies.

Going beyond the domestic border can make things a bit more tricky, however. Dealing with international regulatory requirements can be painstaking due to the lack of a common framework. The companies that are serious about maintaining relevance and making an impact will often go the extra mile to ensure they remain compliant at all times. 

A company such as CoinZoom sets the bar for how any existing or new cryptocurrency business can navigate the regulatory waters. By focusing on compliance across the borders, the company is establishing a global presence. The B2B and B2C brokerage firms hold a Money Services Business license in all 50 U.S states and territories and a Money Transmitter License in 48 states. It takes a lot of time, effort, and money to get these documents sorted, yet it allows CoinZoom to provide its services to a much broader audience. 

Going beyond the U.S., the company has a Digital Currency Exchange registration license in Australia. Down Under is an essential region to cryptocurrencies and more competition among service providers is always a positive development. CoinZoom also plans to enter the EU market once its E-Money License is approved, which should happen in the coming months. 

This compliance-oriented approach confirms cryptocurrency service providers are willing to go the extra mile to play by the rules. If this industry is to be taken seriously by the mainstream, adhering to regulation will become necessary. Some may see it as a way for governments to control the growth curve of Bitcoin, yet it doesn’t have to be. Bringing more legitimacy to this industry by “forcing” rules on companies to help them protect customers is never a negative development. 

Closing Thoughts

The growth of the cryptocurrency industry correlates to regulation and compliance. CoinZoom sets an example of approaching these crucial aspects and slowly expanding its presence on a global level. Other companies have done so in the past as well. It is impossible to become a reputable firm without playing by the rules that apply to other financial institutions.

Eventually, the industry will be regulated and create a “safer” option for people who want to explore alternative financial solutions. Cryptocurrencies are still considered “unsafe” by many people due to a lack of regulatory measures. It is up to policymakers and service providers to find a middle ground and change that narrative for the better.