Why Do Cryptocurrencies Need To Be Regulated?

Cryptocurrencies are all the rage right now. Everyone is talking about them, and many people are investing in them. However, one question remains whether or not cryptocurrencies need to be regulated? There are pros and cons to both sides of this argument, but in this blog post, we will explore why crypto needs to be held to protect investors and keep the market stable.

Reasons Why Cryptocurrencies Need to be Regulated

  1. Prevent Money laundering

Cryptocurrencies have been used in the past to launder money. By using crypto, criminals can hide their identity and ownership of funds. This makes it very difficult for law enforcement to track down the bad guys. If crypto is regulated, then the cryptocurrency trading platform will be required to know the identity of its customers. This will make it much harder for criminals to use crypto to launder money.

  1. Prevent Terrorist Financing

Terrorist organizations have also been known to use cryptocurrencies to finance their activities. Again, by regulating crypto, we can make it harder for terrorists to get their hands on funding. That’s why you should opt for a crypto trading platform, such as KuCoin, where you will get the chance to buy cryptocurrency coins. The coolest part about this platform is that it’s easy to use and perfect for beginners and experienced players to earn some fantastic profit in the future.

  1. Protect Investors

Investors in cryptocurrencies are often unaware of the risks involved in investing in crypto. By regulating crypto, we can help protect investors from scams and fraudsters who might try to take advantage of them.

  1. Online Fraud

Cryptocurrencies have been used in various types of online fraud, such as Ponzi schemes, phishing attacks, and crypto-jacking. In a Ponzi scheme, investors are promised high returns but receive only money from other investors. Phishing attacks refer to fraudulent emails or websites that trick people into revealing their personal information, such as passwords or credit card numbers. Crypto-jacking is when someone’s computer is hijacked to mine cryptocurrencies without their knowledge.

While crypto trading platforms have taken steps to prevent these activities, such as KYC (know your customer) checks, more needs to be done to protect users and crack down on fraudulent activity. This is where regulation comes in. Regulation would help create more trust in the crypto industry and make it more difficult for criminals to take advantage of people. It would also give law enforcement agencies the tools to investigate and prosecute cryptocurrency crimes.

  1. Risk Associated with Technology

Cryptocurrencies are digital or virtual tokens that use cryptography for security. They are decentralized, so they are not subject to government or financial institution control. Cryptocurrencies are traded on decentralized exchanges and can also be used to purchase goods and services.

While crypto assets have been around for over a decade, their popularity has exploded recently. The total value of all cryptocurrencies surpassed $800 billion in December 2020, according to CoinMarketCap.com. Crypto is here to stay, but, as with any new technology, it has risks.

  1. Giving the Chance to Select Cryptocurrencies 

You will come across numerous cryptocurrencies that are available in the market. But most investors are only familiar with cryptos, such as Ethereum price, Dogecoin, Ripple, Bitcoin price, and many others. Apart from these, they do not know the other virtual assets. 

So, a regulatory authority crypto clearing is compulsory to provide proper protection to all the investors. This can help disclose all the digital assets’ information, including their potential, performance, and in-store risks. 

  1. Classification of Cryptocurrencies as Tradeable Assets & Digital Tokens 

A precise classification of cryptocurrencies is currently needed. The government does not back these virtual funds. Many investors are now requesting to view cryptocurrency assets as financial assets, such as commodities, debt, or equity. 

The Bottom Line

Cryptocurrencies have the potential to upend the entire financial system. They’re digital, they’re decentralized, and they’re borderless. This means that crypto-assets can be used to conduct transactions without a third party or middleman. 

However, this also means that cryptocurrencies are mainly unregulated. And while there are benefits to this freedom from government control, there are also some genuine dangers.

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