Most nations realize that a blanket ban on cryptocurrency is not a practical option. The COVID-19 pandemic brought about a changed mindset as, apex financial bodies realized that, cryptocurrency was the best way to instantly and economically, transfer financial assistance to citizens reeling under economic pressure. This has in a way, brought about a more softened attitude towards cryptos.
So the ideal way to handle the crypto industry, would be to chalk out a regulatory framework under which it would operate. This brings us to the issue of crypto laws and regulations – something that has been debated all through 2019 and into 2020. Crypto taxation is just one aspect of crypto legislation, issues beyond this like crypto scamming and exchange hacking should also be covered by legislation.
Fully realizing that cryptocurrency is all about anonymity, and a general lack of control – we need to understand that this is really not how, any financial instrument or digital asset can be allowed to function. A stark example would make the point clear. A retiree invests his or her life savings into Bitcoin. Her wallet is hacked or the exchange hosting her account defrauds and the entire investment is lost. These situations are becoming more common.
Now coming to the global nature of crypto trade. Left on their own, crypto transactions can be conducted across nations and continents. This raises the need for a global nature to crypto legislation. Probably not every single clause in the laws need to be identical, but uniformity is required at least in those areas that define, issues related to tracking and punishing crypto fraudsters.
Crypto laws are not only for crypto traders and crypto scams, are not only about crypto hacks. We have had instances where crypto exchanges themselves, have defrauded account holders. Under present regulations, there is no way of knowing just how solvent a crypto exchange is. This brings us to the need for crypto exchanges to be registered and monitored, in the nations where they operate.
Since crypto crime might have to be tackled across nations, vastly differing crypto laws could pose a challenge. As an extreme case, take an example where an unreliable crypto exchange operates from a nation with loose or no crypto laws – happens to be at the center of a crypto scam that has victims spread across many nations. Tracking and bringing the scammer to book, could be virtually impossible.
Opinions might differ but, it might become necessary for crypto legislation to kick in right from the stage, when projects conduct their ICO (Initial Currency Offering). We have had hundreds of crypto projects where, the promoters abandoned their project the moment funds were collected through an ICO.
While this report highlights the need for crypto laws and urges a fair degree of uniformity in legislation – no presumption is made to imply that, the entire task of legislating the crypto industry is going to be simple or quick. However there is hope, as nations increasingly look to harness the benefits of digital currency while, stepping over its negative side.
Lila Ruzaini, managing the Business Development activity of the Glitzkoin project, sees the process of crypto legislation taking a clear shape in the coming months. In her opinion, ‘… the surging interest in CBDC (Central Bank Digital Currency), will be a major factor in pushing through crypto legislation. I for one agree that, crypto laws should cover every activity related to the industry – ICOs, crypto exchanges, opening of exchange accounts, trade, crypto tax etc. And yes, a degree of uniformity is called for at least, as far as tackling crypto industry related fraud is concerned’.
GLITZKOIN: Glitzkoin is developed on the Stellar blockchain. The project includes the multifaceted GTN token that currently trades actively on 3 crypto exchanges (Cointiger, Stellarport and Dobitrade). Glitzkoin makes a direct connect to the multibillion dollar diamond industry. The project is promoted by second generation diamond veteran Navneet Goenka, it aims to improve productivity and market scope for the glittering industry. A comprehensive diamond trading platform (DiaEx) is part of the project, it supports both B2B and B2C trade in diamonds. As mentioned above GTN is traded by crypto traders on three exchanges, it is also designated as the mode of payment on DiaEx.