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Is Your Crypto Exchange Regulated? Here's What You Need to Know

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 Is Your Crypto Exchange Regulated? Here's What You Need to Know!!


Cryptocurrency, and especially the exchange market, has grown at an incredible rate over the past few years, and it’s safe to say that it won’t be slowing down anytime soon. The same goes for crypto exchanges, but not all of them are created equal - some of them are actually incredibly risky if you don’t know what you’re doing. If you want to trade crypto with any level of confidence in your trading platform, it’s critical that you know whether or not your exchange is regulated and by whom.



Cryptocurrency, and especially the exchange market, has grown at an incredible rate over the past few years, and it’s safe to say that it won’t be slowing down anytime soon. The same goes for crypto exchanges, but not all of them are created equal - some of them are actually incredibly risky if you don’t know what you’re doing. If you want to trade crypto with any level of confidence in your trading platform, it’s critical that you know whether or not your exchange is regulated and by whom.


How is cryptocurrency being regulated today?

It’s unclear how crypto regulations will develop in countries and states that are just starting to get involved with it. In some areas, though, there are new rules being put into place—and often, people don’t realize they have to comply with these regulations unless they work directly in cryptocurrency or blockchain. It all comes down to money laundering laws: because transactions of cryptocurrency aren’t as easily traced as dollar transactions, they make it easier for money launderers and other criminals to hide their misdeeds. To put a stop to that activity (and more), many governments have issued new rules that require exchanges and wallets—the go-betweens for your currency and its new home—to follow strict anti-money laundering policies.



How has regulation evolved over time?

If you haven’t been living under a rock for a few years, you know that cryptocurrency has gone through some serious ups and downs. It’s not uncommon to see market value of currencies plummet or rise by thousands of dollars in a day, which inevitably raises questions about regulation. In fact, regulation was such an afterthought that most exchanges were created without any legal framework whatsoever. Today, however, things are different—and it’s important for investors to know how things got so complex.


How can I find out if my exchange is safe, secure, and legal?

Exchanges that are based in non-crypto countries often must obtain licenses from these countries’ governments and adhere to regulations. Usually, you can find out whether an exchange is safe, secure, and legal by looking at what type of license it has (if any), how long it’s been in business, and whether its owners have a history of being involved with scams or fraud. If you’re interested in purchasing cryptocurrency on an exchange outside your home country—and especially if that exchange is relatively new—be sure to conduct thorough research before opening an account. It doesn’t hurt to ask questions on Reddit or other crypto forums either! Even if your exchange appears legitimate, there are many things that could go wrong when you send money overseas.


Which crypto exchanges are regulated

In a recent announcement, several prominent U.S. regulatory agencies have confirmed that certain virtual currency trading platforms (or exchanges) are required to register with FinCEN as Money Services Businesses (MSBs). This move sets an interesting precedent, as these exchanges are currently not subject to any formal regulation. In fact, until now, no cryptocurrency-related entity had been deemed money transmitter eligible by FinCEN, though it has issued guidance related to virtual currencies like Bitcoin in March 2013 and March 2014. Moreover, under federal law, state regulators were generally prohibited from exercising their authority over Bitcoin or other virtual currency companies operating at a national level.


Regulated crypto exchanges

Before you jump into a trade on an unregulated exchange, it’s important to understand that any trade—even those executed on legitimate exchanges—could be a scam. Just because something is being traded and you’re able to buy or sell it for a profit doesn’t mean it isn’t fraudulent. Scammers often set up shop on hacked sites, so if you come across one of these kinds of exchanges, be careful not to enter your information. If you see anything fishy when checking out an exchange (or cryptocurrency in general), do your research before proceeding with your purchase; things like poor grammar, excessive secrecy, and requests for payment should raise red flags.


gary gensler blockchain: Gary Gensler, a former CFTC chair, says he believes most cryptocurrency exchanges have no idea who their customers are or what they’re doing. I don’t think there is a major exchange today that doesn’t accept money laundering in bitcoin, and I think that’s a big problem, Gensler said at Fortune’s Brainstorm Finance conference in Aspen on Wednesday. If you accept cash into your wallet and you buy bitcoin, now it can be traced. Gensler has been a longtime proponent of stricter regulations around cryptocurrency. In 2014 he pushed for rules that required people involved in bitcoin transactions report those trades to authorities.


ftx ledgerx: In June 2018, Coinbase became one of four digital currency companies that received a BitLicense from New York State Department of Financial Services (NYDFS). Coinbase is a regulated crypto exchange, along with Bitstamp, Xapo and Ripple. These licenses require each company to adhere to standards intended to help keep cryptocurrency out of the hands of bad actors such as terrorists and money launderers. And it’s not just U.S.-based exchanges getting in on regulatory compliance; Japanese cryptocurrency exchange Zaif announced in September that it’s working with Japan’s Financial Services Agency (FSA) so that customers can trade cryptocurrencies like Bitcoin (BTC) for government-issued yen.



Unregulated crypto exchanges

As cryptocurrencies continue to evolve and mature, one of the major challenges facing enthusiasts and speculators alike is accessibility. Like most markets, crypto users must access a platform that has been officially recognized by their local government before they can start trading. In fact, if you are living in a country where crypto isn’t regulated, there aren’t many options at all. Fortunately, there are several exchanges which have managed to gain approval from key governmental bodies (such as the SEC), meaning US-based traders can access them with relative ease. Let’s take a look at how these platforms measure up when it comes to security


Sec coinbase 

Users who trade on one of America’s largest cryptocurrency exchanges will soon be subject to federal oversight and private lawsuits. On Monday, Coinbase said that it would begin collecting information from customers who buy and sell virtual currencies on its platform — a move that could bring in $10 billion worth of revenue by 2022, according to Morgan Stanley estimates. Trading will remain anonymous for now, but those new requirements could eventually make their way onto an exchange near you. The Securities and Exchange Commission signaled last week that it would regulate crypto exchanges under existing laws — a point underscored by Coinbase’s announcement Monday.


 Coinbase sec investigation

Securities and Exchange Commission (SEC) in 2017, for not registering as a broker-dealer with Finra, which would have enabled it to sell its digital currency to retail investors. It has since registered as a member of FINRA. Meanwhile, an investigation by Japan’s Financial Services Agency (FSA) in January 2018 concluded that five of Japan’s 16 licensed crypto exchanges did not meet minimum requirements under its Anti-Money Laundering/Countering Financing of Terrorism (AML/CFT) laws. As part of its ongoing investigation into unauthorized crypto trading—which could bring additional regulations—the FSA raided Coincheck Inc., one of those exchanges, on Jan.

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