How are Cryptocurrency companies impacted by Regulations?

The catastrophic collapse of Crypto companies since the beginning of 2022 exposed many issues in the Crypto industry. Lack of disciplined Risk management practices, financial frauds, increased cyber attacks, money laundering, and pump-and-dump schemes remained rampant among many crypto participants. There is a dire need for regulations and oversight for stabilizing the tumultuous crypto industry.

For crypto experts this is unjust, and it opposes the ethos of Distributed ledger technology, i.e non-intervention of financial intermediaries. They further argue Traditional finance (TradFi) had monstrous financial frauds which had colossal implications on the economy. Any stringent regulations will wreck the democratization of Crypto innovations. But, the crypto investors both institutional and retail have called for globally agreeable regulations to bring stability and order to the industry.

Taking a cue out of this chaos, the Financial Stability Board published two papers, the first paper presents regulation, supervision, and oversight for "Crypto companies" and the second paper is a Consultative paper focusing on regulation, oversight, and supervision on "Global Stablecoins". These regulations capture a wide range of issues, covering Financial Risks, Payment infrastructures, Cyber security, Anti-Money laundering guidelines, and Counterterrorism financing. FSB says it is working closely with other Regulatory bodies such as BIS, IOSCO, and FATF to publish further regulatory disclosures by Crypto Companies to bring stability and reduce spillover or contagion effects (if they may pose) to TradFi.

So, what does it mean for Crypto companies and how are they affected?

In RiskFi, we will bring some of the key insights on how Crypto companies must prepare to brace for the impacts and challenges of these Regulations. We will cover a wide range of topics, aiming to help the crypto companies sail through the stack pile of regulations covering a wide range of financial risks, the financial market infrastructure setups, and the global changes in the industry.