Cryptocurrency Regulation: Could It Make or Break Cryptocurrencies?

Regulation and government interference is certainly the biggest challenge facing cryptocurrency today. Led by South Korea and China, a global crackdown is seemingly taking a heavy toll on cryptocurrency trading.  Like other cryptocurrencies, Bitcoin has also felt the heat, plunging below $6,000 at press time- a quarter of its peak, and the lowest since mid December. This isn’t surprising; South Korea’s investor base has since been at the epicenter of cryptocurrency trading windfall.

According to David Drake-Founder and Chairman of LDJ Capital, the current cryptocurrency slump doesn’t mean the story is over yet. The cryptocurrency investor and advisor maintains “this is not the first time cryptocurrencies are under regulatory pressure; similar rough patches have been experienced in the past.” Akshay Mehra, the CEO of Genie ICO, believes regulation may trigger volatility in the short-run, but critical for crypto’s growth in the long haul: “More regulations will be good for the cryptocurrencies in the long or medium term, though in the immediate term it might lead to volatility in the market, as the market absorbs the new rules.” Likewise, Michael Collins, Co-Founder, and CEO of GN Compass sees regulation as a vital component in boosting investor confidence. Michael says “the crypto space especially ICO’s has been akin to the Wild West, having enforceable rules curb scams and create a safer environment for investors. This will grow the market as tentative investors will finally adopt the cryptocurrency industry.” These comments were also amplified by Kent Yan-Founder and CEO of TraDove Inc-who considers regulation as “a very good sign as it will fully legitimize cryptocurrencies and encourage more participants making the pool much bigger than before.

Experts have also held that regulation will help eliminate rogue elements and protect investors in the new field. Mojtaba Asadian, Founder and CEO of Darico AG, says “regulation is welcomed to filter out the fraudulent activities and safeguard investors interest in such emerging market.”  

Besides governments, major companies have also begun examining the cryptocurrency space as reports of scam proliferate. Just recently, Facebook banned all ads promoting cryptocurrencies in an onslaught against “financial products and services frequently associated with misleading or deceptive promotional practices.” This means that not even legitimate businesses will be allowed to promote their cryptocurrencies or ICOs. The social media giant termed the policy as “intentionally broad” as it also targets fraudulent companies advertising binary options.  According to Dr. John Mathews, the Chief Finance Officer at Bitnation, Facebook’s move will “reduce the flow of new money coming into the crypto eco-system consequently thwarting crowdfunding efforts by making it more difficult to advertise directly to people with no prior exposure to ICOs or cryptocurrencies.” However, some believe that the ads shutdown will not incapacitate marketing endeavors. “Crypto is resilient, and if a company believes in their brand and doesn’t give up, they will find the avenues necessary to effectively market their ICOs,” asserts Roman Guelfi-Gibbs, the CEO and Lead Systems Designer at Pinnacle Brilliance Systems Inc.