Hi!
I'm a cryptocurrency newbie and have very basic/dumb questions about regulation. Here goes..
1) What does regulation mean in practice? Is it like they want to register people who invest or something? Is it all about taxes?
2) Why does governments want to regulate crypto?
3) I see "securities" a lot when googling regulation. Are only coins/tokens that governments deem to be securities in danger of regulation?
4) What are the drawbacks (& advantages?) for an investor who discovers his/her crypto investment is to be regulated?
Thank you for your time & patience
I'm a cryptocurrency newbie and have very basic/dumb questions about regulation. Here goes..
1) What does regulation mean in practice? Is it like they want to register people who invest or something? Is it all about taxes?
2) Why does governments want to regulate crypto?
3) I see "securities" a lot when googling regulation. Are only coins/tokens that governments deem to be securities in danger of regulation?
4) What are the drawbacks (& advantages?) for an investor who discovers his/her crypto investment is to be regulated?
Thank you for your time & patience
An exchange must be registered so that it can give assurance to it's users that the company is legit and the team behind those are transparent. Under regulation, a company must comply on all legal terms under one country's Central Banks. Same with banks and local payment processor and establishment. In case of scam exchanges, users can take a counter against the exchanges.
While at the same time we are experiencing advantages using cryptos, it's no different with the use of fiat wherein fraud and scammed can happened. Regulation of crypto might be not good for others but it has advantages in terms of protecting users. Remember that crypto transaction is irreversible.
On how the government will regulate cryptos, that's only we can see if it's advantage or disadvantage to us.
OK thanks. But regarding taxes.. doesn't most exchanges already comply with government demands of insight?
And because of that, shouldn't governments be able to tax investors on their gains already? At the very least at the moment an investor exchanges back to fiat?
And because of that, shouldn't governments be able to tax investors on their gains already? At the very least at the moment an investor exchanges back to fiat?
That's why you can see such horrible selling rates especially at local exchanges. Because government can taxed directly the investors, the one who is facing it is the exchange itself. In return, investors must deal with the current sell rate of the exchange they are using including all fees at any transactions.