The Role of Regulation in the Crypto Industry; From the viewpoint of a Regulated Exchange

Globiance
4 min readJan 4, 2023
Crypto Regulation with Globiance

Crypto is still a young industry and regulation is currently one of its main challenges. Some companies are content to not comply with regulatory measures unless they absolutely have to. Globiance believes that regulation is essential for the longevity and success of cryptocurrency — especially for beginner investors who may be apprehensive due to drops in price or headlines predicting an ‘impending crash’.

Globiance has been regulated from day one. It was introduced into the market only after obtaining all licenses and permits. Globiance does not believe in taking shortcuts. This allows our clients to always trade with absolute certainty.

This article will explore some potential regulatory measures that could be implemented to protect investors while still allowing the innovation of the industry to grow. The lack of regulation has been a major contributing factor to the instability and volatility experienced in crypto markets.

Globiance actively pursues and obtains crypto registrations and financial service licenses in numerous countries.

What is a crypto registration (VASP)?

Being registered as a virtual asset service provider (VASP) with a country’s regulator means that a crypto company has an Anti-Money Laundering (AML) framework that is accepted and recognized by the local authorities. In most countries, having a VASP designation indicates that you have controls in place to reduce the risk of money laundering and that customer funds are always kept separate from company assets. This is essential for the protection of investors in cases of insolvency or fraud.

Why is it important?

The lack of AML regulations has made it easier for criminals to use crypto as an alternative method to transfer or launder illicit funds without detection. Globiance actively works with law enforcement agencies worldwide to prevent such activity. Globiance customers can feel confident that their funds are safe.

What should be regulated?

There is a lot of debate about what exactly needs to be regulated in the crypto industry and how this should be done. Some countries have taken the approach of banning all ICOs or even cryptocurrency trading. Globiance does not believe that this is the correct way forward. In our opinion, there are three main areas that need regulation: exchanges/trade(s) ICOs and securities.

What should be banned?

It is evident and crucial that the use of cryptocurrencies for money-laundering and financing terrorist activity be prohibited. This can be achieved by implementing strict AML/KYC regulations on all exchanges, traders, and ICOs. These rules are already in place in most countries, and even if the legal framework is not yet fully developed in a country, Globiance always applies the same high standards for the protection of our clients.

What about hacking?

Hacking is already illegal; there is no way it can be regulated specifically. However, security measures such as mandatory 2 Factor Authentication (2FA) should be implemented across all crypto platforms.

What about fraud?

As with any other financial service, crypto traders should be regulated to ensure that customers are protected from fraudulent activities such as pump and dump schemes or false advertising of products. It is our opinion that ICOs should be regulated so that investors can have confidence in the companies they invest in.

How can it be done?

Exchanges and traders: As mentioned above, AML/KYC regulations are already in place for banks and traditional financial services providers. These regulations should be implemented across all crypto exchanges, traders, and wallet providers to ensure that customer funds are kept separate from company assets. ICOs: The main problem with ICOs is the lack of regulation on what constitutes a security or not. This has led to many ICOs being labeled as “unlicensed securities,” which means they cannot be traded on most regulated exchanges. If a coin or token is classified as a security, then it must be registered with the SEC in the USA or an equivalent authority in other countries.

Globiance is licensed to operate in Switzerland (SRO Membership), Australia, the USA, Europe, and South Africa and adheres to local regulations in the other countries we operate in, such as Chile, Peru, Mexico, Argentina, Paraguay, Brazil, Turkey, and more…

This means that Globiance operations are always monitored by the regulators who oversee them globally, for example, the Financial Markets Authority (FINMA) in Switzerland.

Globiance is committed to ensuring customers receive the best service possible. This includes keeping up-to-date with all regulatory requirements and adhering to them. It is essential for cryptocurrency companies to comply with regulations because this gives us the ability to offer ongoing, legally compliant services with maximum privacy and security.

What about the rest of the industry?

Globiance is actively working with other industry leaders to promote regulatory compliance. We believe that this will be essential for the growth of crypto and its long term success. If you would like to learn more about our approach to regulation, please visit our website at globiance.com.

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Globiance

Banking Crypto! Bank, Exchange, Cards, DeFi, CeFi, DEX, Staking, NFT, Metaverse