OiX Regulated Exchange for settling Regulatory Debates
Regulatory scuffle over blockchain-based systems have become a everyday
news. if you look closely at these news you will realize that there are three broad classifications of the debate: illegality, classification, and legal validity.
The question of legality comes up when the government sees the use of cryptocurrencies to break the law. It has been used for money laundering and even for funding terrorist activities. In the light of such activities, regulatory bodies are looking at the possibility of regulating anonymous access to cryptocurrencies. The major challenge is that a private, decentralized currency that is pseudonymous or anonymous encourages and facilitates such illegal activity without consequence. The open question is how to deal with code that makes it quite difficult to engage in censorship or tampering, which also makes it easier to engage in terrorist financing or ransomware.
Only very recently after the announcements by SEC that Ether is not a security has there been a little more clarity on the matter of classification but the issue is far from resolved. As I write this article, there is an ongoing tussle regarding XRP and its classification, with Ripple Inc. arguing that XRP and Ripple Inc are two different entities and should not be confused with each other. This is another area where Government gets weary of unregulated Blockchain cryptocurrencies and tokens.
Now comes the issue of legal validity. let us start by asking some questions that are sure to confuse even the most erudite cryptocurency experts.
Is a cryptocurrency exchange or a miner considered a money transfer agent or a bank under state and federal laws in the U.S.?
Is an issuance of tokens a securities offering under SEC rules, and are those doing the issuing investment managers?
Is a cryptocurrency exchange a derivatives marketplace subject to regulatory requirements issued by the Commodity Futures Trading Commission (CFTC)?
Should cryptocurrency service providers be required to obtain verified information about their customers and the destination of their transactions, as regulated financial institutions are under Anti Money-Laundering/Know Your Customer (AML/KYC) rules?
Are profits on appreciation in cryptocurrencies subject to income tax as assets, currencies, or neither?
Some of these questions have a simple commonsense answer — others, though, have no clear answers.
OiX Blockchain exchange makes all these question moot by offering to structure the tokens as securities. Sometimes it is better to skip the debate by taking what is most conflict free route. Do you really expect to have a carefree business when your fundraising is under clout? Drop me a line at santos@oix.global for a better understanding of what OiX.Global can do for your fundraising.
Comments
Post a Comment