U.S. regulators have recently joined with an international coalition of tax enforcement authorities to investigate cryptocurrency-related crimes. Given that there’s been limited regulatory oversight of cryptocurrency in years past, where does this leave businesses whose bread and butter is cryptocurrency?
Cryptocurrency markets have grown significantly in the past decade. Today, there are numerous exchanges in which cryptocurrency is being traded. Consequently, it has become more difficult to regulate these markets, which has given rise to a number of risk factors, including money laundering and financial crimes.
Regulators have noticed a significant increase in the amount of cryptocurrency companies that are often broken into the following sectors: exchanges, wallets, payments and mining. Cryptocurrency has become a booming market, with values rising into the hundreds of billions of dollars. A number of initial coin offerings (ICOs), which are used to raise money for startups by issuing tokens or coins, have recently gained popularity.
As demand for cryptocurrency grows, global regulators are divided on how to move forward. Cryptocurrencies are not backed by any central government, meaning each country has different standards and regulations. Additionally, extreme price fluctuation, perceived anonymity and lack of security against hacking causes global regulators to remain skeptical of the industry.
