With the rise of cryptocurrencies in the financial market, a lot of issues have also grown in the crypto world. The market has been exposed to a lot of illegal activities with the passage of time. Initial coin offerings (ICO) are done by various scam projects to raise fundings. Is there a need for a regulatory framework in this market to curb such kind of activities that destroy the reputation of the crypto world? Project leader at Peercoin seems to think so.
Talking to BlockPublisher regarding whether there is a need for a regulatory framework in the crypto market, the project leader at Peercoin, who also goes by the alias of ‘peerchemist’ on Peercoin’s official Discord server, stated:
Absolutely, until regulation is global and strict we’ll keep seeing this ICO scams taking money from common people who have no skills to differentiate between coins and ICOs.
He also implied that the general public entering into the world of ICOs does not have much knowledge about the space.
Also people don’t understand that they have no investor rights if they buy into an ICO.
Prevalence of illegal activities like scam ICOs are the reasons why general people and investors hold back from entering this unstable and uncertain world of cryptocurrencies. Official acceptance in the form of crypto-linked exchange-traded funds (ETF) is also missing from day one. Institutions are afraid to touch this unstable and dirty market. With a crypto-linked ETF in place, more institutional trust is likely to be established and the investment from the general public is also expected to increase.
If this market is to grow and mature, elimination of the issues related to regulation needs to be done as soon as possible. Besides lack of a regulation, manipulation is also an equally important issue which is damaging the reputation of the crypto market. The general adoption of cryptos among the public is also very low owing to these issues.
A two-layered framework is needed as of now to eliminate the problems linked with regulation. Firstly, the people entering the crypto arena need to be educated regarding this space, especially ICOs. Secondly, an official level regulatory framework overseeing the crypto market needs to be put in place so that more protection is provided to the investors of the market.