Why are Regulators Fighting Crypto Platforms?
The SEC is fighting against crypto and any platforms slightly connected to the blockchain world. XRP, Binance, Coinbase, Bitmex and Robinhood are among the few cases of regulator’s fight against crypto. So, why are regulators focused on a war against crypto? Let’s consider several reasons.
To Have Control Over Crypto
The most primary reason is to gain control of crypto. Controlling digital assets means they will be capable of creating regulations for the crypto space.
For instance, the SEC expressed interest in crypto networks registering some crypto assets on multiple occasions. In fact, in the spat between Coinbase and SEC, the regulator wanted Coinbase to register the Lend service as a regulated product.
The problem is, even after one decade of crypto’s existence, the SEC does not have a list of crypto tied securities. As such, this network is always in fights with crypto and blockchain networks.
It’s in the interest of Other regulatory bodies to centralize the operations of crypto exchanges to regulate them.
To Get More Taxes From Crypto
Some government agencies are interested in earning more income from crypto networks. Recently, in the US, congress introduced regulations in crypto to gain more taxes. Whereas, experts still thought US government owned more bitcoins than any other holder.
When discussing the $1 trillion infrastructure bill, they included a section that will increase crypto. The new bill touches all projects slightly tied to crypto. The idea is to raise billions for funding the infrastructure bill. Thus, the increased efforts by regulating authorities like treasury are to get more income from crypto.
To Protect Consumers
Another for the increased fights against crypto is consumer protection. Generally, crypto since its launch has been under criticism from security and regulating authorities. Many claims that crypto is a mere bubble, and as such, can easily disappoint users. Therefore, the SEC, CTFC and FCA are trying to protect their users.
To Ban Cryptocurrency
Finally, governments may be using regulatory bodies to fight against crypto and ultimately kill it. Some governments like China have enhanced the fight on crypto, intending to ban it. As such, they are increasing regulations every other day.
This guide has looked into the regulatory environment surrounding crypto today. It seems like many regulators today are trying to suppress crypto in every way. The cases of Coinbase, Binance, Bitmex and Robinhood, are good examples of regulatory suppression. But why are they fighting crypto?
There are four possible reasons behind their increased fights. Foremost, most governments and regulators want to have control of crypto. They want to centralize the blockchain world and create regulations to take complete control.
Moreover, the regulators’ interest could be increasing the national revenues. It’s also possible that consumer protection and possible crypto bans are reasons behind the increased regulations. However, Governments should focus more on helping crypto grow instead of suppressing its adoption.