Is regulation of cryptocurrency exchanges essential for mass adoption?

[DVlog]

The leading cryptocurrency exchange Binance which is supposed to take the lead in regulatory compliance seems to be having troubles with many countries already due to one regulatory issues to another ranging from licensing, operating within the legal framework of the country and compliance to regulation in general which have caused their exit from countries like United States, United Kingdom, Canada, Switzerland, Japan and others.

True, but Binance is trying to hide a lot of information, starting from its headquarters and ending with many reports that talk about the misuse of customer funds.

Not only binance most of the centralized exchanges are involved in this kind of activity. They are no better than FTX, they just aren't caught yet. I think the SEC is planning something for binance and they have evidence against it. The resignation of binance CEO from led me to the conclusion that he knows binance can be accused in the future and charge huge penalties.

[tabas]

IMHO, adoption and growth correlate to each other and they happen together with the help of regulations. It's a truth and fact and all over these times, not ignoring the contribution of many through the promotion or spreading about decentralization. This is needed by the market to grow and continue moving on and that's through the help of these regulations and centralized exchanges. Even if we don't want that to be the major contributor to this growth, that's what we're seeing. We see the push from financial institutions as well aside from the centralized exchanges that we've seen to be what everyone is talking about. They may not get a license depending on their compliance but most of them are complying on it and no need to get published in media but, as much as we can see it's like every move that they do are all recorded and they're trying to move everything, price, market, etc. by every single good/bad news they make.

[Ndabagi01]

If government rules accompany mass adoption, a number of other issues will arise. The constraints that will be imposed on the use of bitcoin will make it unappealing to the the general public, who will prefer to explore existing or future technologies that will make their use stress-free. I am an ambassador for bitcoin mass acceptance; but, as much as I want this adoption to happen quickly, I don't want it to turn people off from participating in bitcoin technology. Mass adoption can occur in other ways than through regulations. Adoption can also be accomplished through mass media.

[el kaka22]

Regulation is not the thing that is a "must" or essential, it's that being legal is the thing we are going for here. When you are talking about regulations, it looks like without hardcore regulation we can't have mass adoption, that is not the case, yes that is how it will probably be and we will see a ton of people end up with something that will be crazy to handle, but that doesn't mean that it will be the way to go.

We could also have a world where it is not as hard regulations as we think and it could still end up with a good result and shouldn't shock anyone. I think low level regulations that leave it be and still be legal is the greatest thing that could happen for bitcoin and it will definitely lead to a huge adoption numbers.

[adaseb]

Yes there needs to be some form of regulation. If there isn't then you got exchanges like MtGox, FTX, Gemini Earn where people put their entire life savings in and end up with nothing. What happened with FTX should of never happened but it did because there was no regulation.

I am watching their trial and they basically had fake money running the exchange for many years and they got away with it because there was no authority who could verify any of their financial obligations. Hence for mass adoption there needs to be some regulations in play so people aren't afriad of making a deposit and worry about getting all their money stolen.

[Palazodeen]

It is possible that an exchange will not be granted a license if issues are not resolved. We must normalize it since the authorities are solely concerned with for the sake of investors in their country. There have been numerous reports of investors being hacked or defrauded, and it keeps happening.





Besides, investors are also feel safe if the exchange is regulated and licensed. So, in those exchanges, they need really take care of their reputation so that their project may continue to work and grow in most countries.

I understand that some countries regulations is quiet too strict but if an exchange is now having issues with multiple countries over similar problem then something is fundamentally wrong

[Palazodeen]

Yes there needs to be some form of regulation. If there isn't then you got exchanges like MtGox, FTX, Gemini Earn where people put their entire life savings in and end up with nothing. What happened with FTX should of never happened but it did because there was no regulation.

I am watching their trial and they basically had fake money running the exchange for many years and they got away with it because there was no authority who could verify any of their financial obligations. Hence for mass adoption there needs to be some regulations in play so people aren't afriad of making a deposit and worry about getting all their money stolen.

Couldn't forget Bitfinex hack of 2016 as well. People have really lost fortunes to a lot of anomalies from crypto exchanges and I think any cex against regulations at this critical moment have some ulterior motives. It's relieving to see some exchanges already complying with these regulations.

[shinratensei_]

regulation exist to give assurance to the customers, if exchange can be regulated, then many will have no doubt towards the investment.
the only thing that holds back many from investing is because unclear regulation towards the investment and the exchange themselves.
I guess with regulation everyone will be trusting more.
but its still unclear about the correlation though, no real research here so all that is just speculation.

[Palazodeen]

The leading cryptocurrency exchange Binance which is supposed to take the lead in regulatory compliance seems to be having troubles with many countries already due to one regulatory issues to another ranging from licensing, operating within the legal framework of the country and compliance to regulation in general which have caused their exit from countries like United States, United Kingdom, Canada, Switzerland, Japan and others.

True, but Binance is trying to hide a lot of information, starting from its headquarters and ending with many reports that talk about the misuse of customer funds.

Not only binance most of the centralized exchanges are involved in this kind of activity. They are no better than FTX, they just aren't caught yet. I think the SEC is planning something for binance and they have evidence against it. The resignation of binance CEO from led me to the conclusion that he knows binance can be accused in the future and charge huge penalties.

Does it now mean we don't have trustworthy cex that is reliable?

[Palazodeen]

IMHO, adoption and growth correlate to each other and they happen together with the help of regulations. It's a truth and fact and all over these times, not ignoring the contribution of many through the promotion or spreading about decentralization. This is needed by the market to grow and continue moving on and that's through the help of these regulations and centralized exchanges. Even if we don't want that to be the major contributor to this growth, that's what we're seeing. We see the push from financial institutions as well aside from the centralized exchanges that we've seen to be what everyone is talking about. They may not get a license depending on their compliance but most of them are complying on it and no need to get published in media but, as much as we can see it's like every move that they do are all recorded and they're trying to move everything, price, market, etc. by every single good/bad news they make.

I think publishing the name of crypto exchanges who are regulatory compliant will help users make informed decision not to fall victim of exchanges that will suddenly announce their exit from a particular country and give users 2 weeks to withdraw their assets or forfeit it. This is totally unacceptable but unfortunately it's what we see on daily basis. In any case, it's appealing to see some exchanges like Bitget already obtained some necessary licenses to operate in most countries aside USA and some other few countries that is not that crypto friendly. It will be a great development to see more top cex getting licensed because this will obviously give users peace of mind over their assets.

[adaseb]

If you read the SBF trial today then Caroline Edison made it clear that they were insolvent for basically entire 2022. She actually was finally happy when the exchange imploded because her guilty conscience went away because she was dreading the Ftx massive withdraws for the entire year.

This is proof why exchanges need to be regulated. Because you never know what goes on behind the scenes. Everyone trusted FTX but turns out they were the biggest scam of the century pretty much.

[uchegod-21]

The cryptocurrency industry is currently at a critical stage and the role of exchanges can either "Make or Marr" the growth of the space.

Since 2009 till date, the industry has encountered a mouth watering growth with many institutional adoption of which Honda Motors is the latest to announce purchase of their product via crypto. Let's not also forget Elon Musk also accept payment of crypto for his Tesla cars and other big institution around the world also accept crypto as means of payment to obtain their goods.

This shows the world and future of crypto look promising but one area of particular interest that could potentially hinder this growth seems to be compliance by crypto exchanges to be regulated which of course I personally deem important because of the past event of scam from exchanges, hacks and collapse of some CEX which left investors in shambles.

The leading cryptocurrency exchange Binance which is supposed to take the lead in regulatory compliance seems to be having troubles with many countries already due to one regulatory issues to another ranging from licensing, operating within the legal framework of the country and compliance to regulation in general which have caused their exit from countries like United States, United Kingdom, Canada, Switzerland, Japan and others. Recently Bybit another top crypto exchange has also exited the UK market raising an eye brow about the readiness of this exchanges to extant laws that seek to protect the interest of users and investors.

If this turn of events towards rejecting to be regulated by countries persist, crypto might prolly fade away with time especially if some top exchanges are not operational in top countries like USA, UK, Canada, Japan and the rest.

What are your thoughts?

If regulating the cryptocurrency exchange will...
1. Guarantee the safety of our investments
2. Guarantee that people's investments can be recovered in event of winding up of a particular exchange or perceived scam.
3. Guarantee that people or investors can still carryout operations freely just like in DEX with no strict regulations.

Then, majority of the people will have confidence in cryptocurrency and will be willing to adopt it. Countries too will adopt it since they can now control the system  .

[kentrolla]

The cryptocurrency industry is currently at a critical stage and the role of exchanges can either "Make or Marr" the growth of the space.

Since 2009 till date, the industry has encountered a mouth watering growth with many institutional adoption of which Honda Motors is the latest to announce purchase of their product via crypto. Let's not also forget Elon Musk also accept payment of crypto for his Tesla cars and other big institution around the world also accept crypto as means of payment to obtain their goods.

This shows the world and future of crypto look promising but one area of particular interest that could potentially hinder this growth seems to be compliance by crypto exchanges to be regulated which of course I personally deem important because of the past event of scam from exchanges, hacks and collapse of some CEX which left investors in shambles.

The leading cryptocurrency exchange Binance which is supposed to take the lead in regulatory compliance seems to be having troubles with many countries already due to one regulatory issues to another ranging from licensing, operating within the legal framework of the country and compliance to regulation in general which have caused their exit from countries like United States, United Kingdom, Canada, Switzerland, Japan and others. Recently Bybit another top crypto exchange has also exited the UK market raising an eye brow about the readiness of this exchanges to extant laws that seek to protect the interest of users and investors.

If this turn of events towards rejecting to be regulated by countries persist, crypto might prolly fade away with time especially if some top exchanges are not operational in top countries like USA, UK, Canada, Japan and the rest.

What are your thoughts?

If regulating the cryptocurrency exchange will...
1. Guarantee the safety of our investments
2. Guarantee that people's investments can be recovered in event of winding up of a particular exchange or perceived scam.
3. Guarantee that people or investors can still carryout operations freely just like in DEX with no strict regulations.

Then, majority of the people will have confidence in cryptocurrency and will be willing to adopt it. Countries too will adopt it since they can now control the system  .

This is not gonna happen and what is gonna happen upon regulation would be as follows:
1. Taxing not just their withdrawal amount but also every single trade like happened in India which pushed some well know crypto exchanges like coindcx & kuber coinswitch to have mass layoffs of their workforce and they are at the brink of either shifting their operations to other country or going bankrupt
2. Eventually crypto will die if regulated because once regulated they can play it as per their benefits and it would be nothing short of a volatile low market cap mutual funds.

Rather, we need to have an genuine inbuild crypto community for this which should work independently unlike some ICO ranking sites who takes bribe and rate projects, we need to build a community amongst ourselves and set up protocols to be applied on crypto projects to be considered as validated projects and there should be monthly review. It not as simple as I have mentioned as there need to be a proper planning and require lot of funds to set this up. Crypto enthusiasts should come together for this else we will be left at the mercy of either the government/regulators or corrupt crypto orgs.

[Lida93]

I think that mass adoption of bitcoin depends more of business being open to it and folks like us spreading the word about how to use it.

Think in the first trades done by humanity, how they learning to trade goods and services, how they adopt money until the point that every body start to using and work for it...

It's kind of like a domino effect, you know? People learned, taught others, and before you knew it, everyone was on board and using it in their everyday lives. That's how I see Bitcoin too – if more businesses start accepting it and more people show others how it works, it could become a big part of our financial world just like money did back in the day.

There's a common sense in what you've said towards expanding the adoption of bitcoin by  more institutions opening their doors to it's usage just as OP mentioned Honda motors.

But there's a quintessential role that these exchanges play that is peculiar to them alone in the promotion of bitcoin adoption in terms of trading bitcoin and other cryptocurrencies. Which is why a continuous restrictions from these big countries with large crypto users would ultimately affect, stalling the adoption of bitcoin if more countries add to those number such as the UK, Switzerland, Japan etc.

 Although these regulatory policies by the government are projected towards protecting investors for their safety and from getting scammed some of the regulatory conditions ushered to these exchanges by the government of those territories could be inimical to the business growth of the exchange's and since they can't fulfil those conditions they have to exit those sets of countries to operate where the business environment and policies are favourable.

The real deal is that the government are in certain cases self centered with their regulations but since all of these are happening behind closed doors we are not allowed to get the full gist as to what really transpired in the exit of these exchanges from a country they once existed.

[milewilda]

The cryptocurrency industry is currently at a critical stage and the role of exchanges can either "Make or Marr" the growth of the space.

Since 2009 till date, the industry has encountered a mouth watering growth with many institutional adoption of which Honda Motors is the latest to announce purchase of their product via crypto. Let's not also forget Elon Musk also accept payment of crypto for his Tesla cars and other big institution around the world also accept crypto as means of payment to obtain their goods.

This shows the world and future of crypto look promising but one area of particular interest that could potentially hinder this growth seems to be compliance by crypto exchanges to be regulated which of course I personally deem important because of the past event of scam from exchanges, hacks and collapse of some CEX which left investors in shambles.

The leading cryptocurrency exchange Binance which is supposed to take the lead in regulatory compliance seems to be having troubles with many countries already due to one regulatory issues to another ranging from licensing, operating within the legal framework of the country and compliance to regulation in general which have caused their exit from countries like United States, United Kingdom, Canada, Switzerland, Japan and others. Recently Bybit another top crypto exchange has also exited the UK market raising an eye brow about the readiness of this exchanges to extant laws that seek to protect the interest of users and investors.

If this turn of events towards rejecting to be regulated by countries persist, crypto might prolly fade away with time especially if some top exchanges are not operational in top countries like USA, UK, Canada, Japan and the rest.

What are your thoughts?

If regulating the cryptocurrency exchange will...
1. Guarantee the safety of our investments
2. Guarantee that people's investments can be recovered in event of winding up of a particular exchange or perceived scam.
3. Guarantee that people or investors can still carryout operations freely just like in DEX with no strict regulations.

Then, majority of the people will have confidence in cryptocurrency and will be willing to adopt it. Countries too will adopt it since they can now control the system  .

1. Not totally safe at all, come to think and look on what happened on FTX or even on Mt. Gox, did their users do get their funds upto this moment?
2. There's no such thing about guarantee and lucky if you have some funds on an exchange like Binance which they do have that SAFU funds incase of hacks and exploits but we do know
that most platforms doesnt have, so its not completely a guarantee i shoud say.
3. Not that free because of mandatory KYC or you dont have that any choice because if you do go with that unverified account which limitations of such account do really sucks specially
on having that P2P feature on which you would really be needing to make some verification. So ending up on having no choice.


Exchange existence had already been in a while and its normal nor not shocking anymore that they would really be that complying with government rules and regulations on which it would really be just
that so normal that they would really be following on what are the things that had been implied or been said for them to continue operations on which we users doesnt have that
choice but to go along with it or else you do need to find another place but majority is really be that something like this.

[Renampun]

...

The leading cryptocurrency exchange Binance which is supposed to take the lead in regulatory compliance seems to be having troubles with many countries already due to one regulatory issues to another ranging from licensing, operating within the legal framework of the country and compliance to regulation in general which have caused their exit from countries like United States, United Kingdom, Canada, Switzerland, Japan and others. Recently Bybit another top crypto exchange has also exited the UK market raising an eye brow about the readiness of this exchanges to extant laws that seek to protect the interest of users and investors.

If this turn of events towards rejecting to be regulated by countries persist, crypto might prolly fade away with time especially if some top exchanges are not operational in top countries like USA, UK, Canada, Japan and the rest.

What are your thoughts?

What do you mean by fading? even if all the CEXs in the world are banned, cryptocurrencies and bitcoin will not fade away, currently there are even many people who make exchanges on DEX and also P2P. However, I am sure that legal regulations from the government regarding cryptocurrency exchanges will further boost the popularity of cryptocurrencies and also mass adoption among ordinary people. In several countries, crypto exchanges are regulated in such a way, but they are obliged to pay taxes to the state because that is the purpose of a countries regulate cryptocurrency exchanges is tax money.

[MarvieJ]

But if we were to choose between regulation and outright ban, I would choose for regulation at least even if I don’t like it. I believe that centralized exchanges (CEXs) can co-exist with the government for mass adoption if they wanted to be licensed to operate their services to the citizens. But no way they would regulate DEXs.

It is like a dilemma and obviously every cryptocurrency enthusiast or a bitcoin will surely choose adoption over outright ban. Obviously there are some advantages of regulation but the disadvantages out weighs the advantages. If there is regulation, there rate of adoption will increase for institutions and companies but then decentralisation will be highly affected.
In the other hand, government purpose of adoption is not for the wellbeing of the citizens as they claim. They just want to control and sensor all factors and be able to tax everyone effectively in the cryptocurrency industry. We cannot reject regulation because if it doesn't happen today, it will happen to tomorrow and it must happen as long as grow of the cryptocurrency technology is experienced.

But it looks like some exchanges are finding it difficult to comply with regulations. You must've heard about Bybit's suspension of their operations in the UK due to regulatory issues. Meanwhile Bitget is in compliance and are still operating in that region. Binance also exited the US markets owing to regulatory issues. I'm genuinely interested in knowing why some exchanges are complying and others aren't.

The discomfort and frustration I'm feeling right now is immeasurable. Bybit's decision to halt services in the UK due to upcoming regulations is leaving us high and dry.

[jossiel]

The discomfort and frustration I'm feeling right now is immeasurable. Bybit's decision to halt services in the UK due to upcoming regulations is leaving us high and dry.

IIRC, there are also other exchanges that have left the UK market because of the regulatory pressure that they're giving to these companies.

That's sad that a lot of good people that are using their services are being pinched on this one even if they don't want to see them leave that market.

This is the effect of these regulations that are not favorable to the people but only to the government.

[Palazodeen]

The discomfort and frustration I'm feeling right now is immeasurable. Bybit's decision to halt services in the UK due to upcoming regulations is leaving us high and dry.

IIRC, there are also other exchanges that have left the UK market because of the regulatory pressure that they're giving to these companies.

That's sad that a lot of good people that are using their services are being pinched on this one even if they don't want to see them leave that market.

This is the effect of these regulations that are not favorable to the people but only to the government.

It's sad that Bybit is exiting UK after Binance did some months ago. I have seen a lot of people argue the pros and cons of this regulations but to me, the safety of users asset is paramount. In as much as there are still exchanges like Bitget operating in the UK, it leaves me to wonder why Bybit is leaving. I think most governments are now sensitive to some of the anomalies in some of this cexs after FTX collapse. If the main reason for this regulations is to protect users assets then so be it but if the government have their own agenda, then DEX will be the way to go.

[Palazodeen]

The cryptocurrency industry is currently at a critical stage and the role of exchanges can either "Make or Marr" the growth of the space.

Since 2009 till date, the industry has encountered a mouth watering growth with many institutional adoption of which Honda Motors is the latest to announce purchase of their product via crypto. Let's not also forget Elon Musk also accept payment of crypto for his Tesla cars and other big institution around the world also accept crypto as means of payment to obtain their goods.

This shows the world and future of crypto look promising but one area of particular interest that could potentially hinder this growth seems to be compliance by crypto exchanges to be regulated which of course I personally deem important because of the past event of scam from exchanges, hacks and collapse of some CEX which left investors in shambles.

The leading cryptocurrency exchange Binance which is supposed to take the lead in regulatory compliance seems to be having troubles with many countries already due to one regulatory issues to another ranging from licensing, operating within the legal framework of the country and compliance to regulation in general which have caused their exit from countries like United States, United Kingdom, Canada, Switzerland, Japan and others. Recently Bybit another top crypto exchange has also exited the UK market raising an eye brow about the readiness of this exchanges to extant laws that seek to protect the interest of users and investors.

If this turn of events towards rejecting to be regulated by countries persist, crypto might prolly fade away with time especially if some top exchanges are not operational in top countries like USA, UK, Canada, Japan and the rest.

What are your thoughts?

If regulating the cryptocurrency exchange will...
1. Guarantee the safety of our investments
2. Guarantee that people's investments can be recovered in event of winding up of a particular exchange or perceived scam.
3. Guarantee that people or investors can still carryout operations freely just like in DEX with no strict regulations.

Then, majority of the people will have confidence in cryptocurrency and will be willing to adopt it. Countries too will adopt it since they can now control the system  .

1. Not totally safe at all, come to think and look on what happened on FTX or even on Mt. Gox, did their users do get their funds upto this moment?
2. There's no such thing about guarantee and lucky if you have some funds on an exchange like Binance which they do have that SAFU funds incase of hacks and exploits but we do know
that most platforms doesnt have, so its not completely a guarantee i shoud say.
3. Not that free because of mandatory KYC or you dont have that any choice because if you do go with that unverified account which limitations of such account do really sucks specially
on having that P2P feature on which you would really be needing to make some verification. So ending up on having no choice.


Exchange existence had already been in a while and its normal nor not shocking anymore that they would really be that complying with government rules and regulations on which it would really be just
that so normal that they would really be following on what are the things that had been implied or been said for them to continue operations on which we users doesnt have that
choice but to go along with it or else you do need to find another place but majority is really be that something like this.

Just as you rightly pointed out, the essence of this regulations is to protect users assets even though the government obviously have their own agenda of taxing users. But looking at it from a wider point of view, isn't it better for one to carry out his/her activities on this cexs and pay some penny as tax than some of these cex to just suddenly disappear with users funds and their is nothing the government can do about it. I think the former is more reasonable because regulations means those exchanges are under checks and are periodically been audited to see if they have what they claim to have. Talking about Dex, it's certainly best but not also free from hacks, I have seen so many wallets hacked also. We shouldn't forget that one of the aims of regulation aside protecting users funds is to combat AML (Anti-money Laundering), Terrorist Financing and so on which is one of the reason for KYC. Although many top cex have this in place already but aside Binance with $1B SAFU and Bitget with $350M user protection fund. No any other cex has publicly disclosed their user protection fund even though they claimed to have.