The Cryptocurrency system is witnessing rapid changes as regulators all across the world are trying to control its trading. The entire system of cryptocurrency which is based on blockchain technology maintained an undercurrent role a few years back. However, its popularity increased recently (especially in 2017) and it further attracted hordes of traders and investors. The popularity of cryptocurrencies compelled the lawmakers and government agencies to take a closer look at the entire matter. Across the world, many government agencies and affiliated institutions pointed out at different levels of risk and threat zones within cryptocurrency network.
The design of cryptocurrency network is such that tracking transactions are difficult. Cryptocurrency system stands directly opposite to the government-controlled financial agencies as there is no central authority over the crypto system and it allows a highly decentralized chain for operating transactions. The high level of anonymity provided in cryptocurrency network leaves out plenty of space for fraud transactions and possible misuses. It means that theft from wallets or cryptocurrency exchanges is not secured by any reputed body. According to an estimate, approximately $400 million have been stolen from investors participating in ICOs since 2015 by cybercriminals.
Recently there have been cases where the security of cryptocurrency exchanges has been compromised and scam ICO's have been exposed. This problem of security lapses and scams creates a perception that cryptocurrency is a highly risky business. However, the impact of cryptocurrency is so high that it has started to influence share market prices of companies which have tied to some or the other cryptocurrency network. The traditional regulators of fiat currency are having a hard time to come out with a solution to address problems in cryptocurrency system. Some financial experts are of the opinion that cryptocurrencies pose more risk than rewards.
It is true that the confusion related to cryptocurrency regulation has provided a breeding ground for fake companies and money laundering identities. But, on the other hand, it has also provided a tremendous opportunity for startup companies to raise money through ICO's rather than waiting for angel investors.
Some countries across the world have started to take action for regulating cryptocurrencies.
A) The Government of India has stated that it does not identify cryptocurrency as a legal tender. In 2018, the working of many Indian crypto exchange sites halted because of strict vigilance and guidelines issued by Reserve Bank of India.
B) Payments by Bitcoin has been banned in Vietnam.
C) Chinese Government has shutdown ICO's altogether.
In the coming future, we can see many more countries who can come up with some or the other regulation to ensure that some form of government control remains over cryptocurrency.
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