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Destructive Bitcoin Laws, Delayed BTC ETF: Where is the Cryptocurrency Industry Heading?

Destructive Bitcoin Laws, Delayed BTC ETF: Where is the Cryptocurrency Industry Heading?

SEC has postponed the verdict on the Van Eck and the Bitwise Bitcoin ETF applications once again. The SEC has added another 35 day period for gathering more information and public opinions on the matter. Apart from this, the FATF is going to finalize new standards for regulating cryptocurrency firms.

SEC delays Bitcoin ETF application verdict

The SEC has released a set of questions open to the public about the proposal with the intent of using the provided answers to aid them in reaching a final verdict.

The questions specifically pertain to topics regarding protecting investors and public interest from fraud and similar exploitations.

With the new delay, Van Eck’s deadline is moved back to August 19th. The SEC can and probably will delay one more time, making a final verdict by October 18th.

Financial Action Task Force to finalize new standards for regulating cryptocurrency firms:

FATF or Financial Action Task Force is set to finalize the new standards in order to regulate cryptocurrency firms next month. After a meeting earlier this month between hundreds of industry representatives and board of regulators, it seems that the regulators will be pushing for the most draconian options on the table in order to regulate cryptocurrency firms.

Those standards will very likely make cryptocurrency exchanges, wallet providers and other related companies subject to something called the ‘Travel‘ rule which has long been followed by correspondent banks around the world. This would go way beyond the basic Know Your Customer rules that we are so familiar within cryptocurrency space because, in addition to verifying and keeping records of their own user’s identities, exchanges and wallet services would have to pass customer information to each other while transferring funds just like banks are currently required to do. This would make your transaction fully transparent and registering the owners of those cryptocurrency addresses. This would be very terrible in terms of user privacy and would only succeed in driving users away from regulated platforms.

The United States is currently holding the presidency of the FATF and it is to keep in mind here that FATF recommendations aren’t legally binding but the countries that don’t follow their recommendations can find themselves blacklisted in the global economy. Also, worth keeping in mind is that even if they do pass these new recommendations, the requirements wouldn’t take effect overnight.

The countries would first have to pass legislation or to pass rules putting the recommendations into effect. So it could take years while we see this actually implemented but due to the power and influence of the FATF member states, the consequences could be very impactful for non-member states who may simply be forced to apply laws which go against their own wishes due to the threat of being blacklisted from the global economy, should they of course fall into any kind of non compliance.

Layla Harding

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