Regulation is a talk that has been going on in the world of virtual currency for a very long time. As everybody predicted, the same talk formed the center stage of the Business of Blockchain conference that was held on Monday 23rd April 2018 at the Massachusetts Institute of Technology.
More Speculations At The Event
Apart from the discussion on when and how the whole idea of regulation was going to be carried on, there are other speculations that went round as this summit was underway.
One of these speculations had it that the national body that is charged with regulating exchange and security platforms in the US had plans of categorizing some established two virtual currencies. The currencies in question were Ripple’s XRP and Ethereum, which are currently at the top of their games.
It was widely rumored that US Securities & Exchange Commission- SEC was planning to categorize these two coins as securities. As noted by most sector players, this kind of rift could have pushed most of the market players to nasty things such as legal penalties. As a matter of fact, it was observed that the fines could stretch far beyond what the promoters of a recently concluded Initial Coin Offering undergone.
Counsel From Industry Professionals
Fears that the market of virtual currencies could be regulated any time were confirmed when Gary Gensler, a senior professional in this field took to the stage. According to his own assessment, Ripple and Ethereum all fit in the category of securities. This, he added, is entirely based on the laws of the United States of America.
Factors Affecting Innovation In The Market
While speaking to CoinDesk, the director of the MIT Media Lab’s Digital Currency Initiative, one of the factors that affect innovation is lack of sufficient regulation in the market. This, according to her, has even deterred serious players due to the fact that consistent scamming tends to affect the integrity of the market.
In her submission, Narula appeared to be agreeing with Gensler, but only on one thing. They both agree that there should be more candid conversations surrounding the whole idea of certain virtual currencies being categorized as securities. More Pain Ahead The realization that virtual currencies will soon be regulated could throw the whole market into serious pain.
The other factor that might cause confusion to the market is the fact that certain virtual coins might be categorized as securities. A senior counsel at Cooley LLP, Patrick Murck and his counterpart at Harvard ‘s Berkman Klein Center for Internet and Society appear to be agreeing on one thing.
They say that should the SEC side with Mr. Gensler, the economy could shift anytime, probably to the worst. Should the two currencies, Ethereum and XRP be declared as securities, the exchange of the virtual currency and even the general market and its participants may end up facing serious penalties. Other people who may face serious penalties are those who might sell evangelized projects like Ether to members of the public.