What is leading to high demand for Cryptocurrency Compliance?
When in the wake of a pandemic, the experts consult that investment ranges only between gold and cryptocurrency. At this point, the news of one of the major bitcoin and crypto exchange BitMEX being charged by the U.S authorities presents an environment full of risks. We have witnessed the growth and reach of the cryptocurrency industry which has matured and gained a global economic landscape.
On the 1st of Oct, the United States Department of Justice filed criminal charges upon four of the BitMEX executives which also included its founder, Arthur Hayes. The authorities had levied charges against violating the Bank Secrecy Act.
This moved the world of cryptocurrency, blockchain technology, and bitcoin users that lead many investors to consider it as a risky platform and they removed almost 50,000 bitcointokens from BitMEX since last week.
Government regulations on Cryptocurrency
As the stir caused some severe damage in the industry, it is also leading other bitcoin and crypto exchanges around the world to be more careful about government regulations. Especially the ones that require identification documents from all users, else they ought to fall into the same pit.
Moreover, according to industry experts, the BitMEX case has shown that crypto businesses must work according to the rules of the existing financial system using proper banking analytics, as far as the U.S. is concerned.
Authorities around the globe witness different challenges based on crypto-assets, their regulations, and they have to keep a check on every detail where a user or consumer is concerned. As per the professionals and an expert network company, BitMEX was being shady about its policies and activities since 2019 and it was also using weak Anti-Money-laundering by simultaneously not complying with the “Know Your Customer” policy.
Many reports alleged that the CFTC was investigating the exchange for the U.S. residents and were easily trading crypto derivatives on the BitMEX platform even though there was no requirement of registering as a derivative exchange. It was noted neither with the CFTC nor any cash service provider declaring it to be an illegal state of affairs.
Although there has been a lot of talk about complying with the crypto regulations and not appropriately utilizing the blockchain technology, multiple investors were attracted to this industry but only for a short while. The risks of non-complying forced them to pull their hand in cryptocurrency back to where it was or to somewhere else.
Developing rules and proper regulations takes increasing years into the count and the potential impact of the market is mostly favorable. According to Arcane Research, open interest on BitMEX’sbitcoin derivatives market dropped off 16% the day after charges were brought against the company.
Also, The Chainalysis warning compounds data from blockchain analytics firm Glassnode that shows around 45,000 bitcoin tokens have been withdrawn from BitMEX since the start of the month, representing a 27% drop in the total bitcoin on the exchange.
If there will be proper governance and if crypto companies will comply with the authorities and rules then the crypto partnerships will definitely achieve progress beyond the basic and initial stage of the industry. Proper governance will also allow them to identify business opportunities in blockchain technology, crypto business, and banking analytics to rise in the market and reach the investors in time.
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