eToro, a UK-based brokerage service and trading company, and Bitpanda GmbH, an Austrian crypto trading company, recently told Bloomberg that rules and regulations set for cryptocurrencies would make their jobs easier. Some crypto companies still stand by their previous statements: Know Your Customer (KYC) rules are not meant for cryptocurrencies. However, other crypto trading platforms have realized that once laws are passed, more and more people will be attracted to this industry.
Eric Demuth, Co-founder and CEO of Bitpanda, said, “We’d be happy to have regulations, so we know where we stand.” He also dismissed the idea of moving to crypto-friendly countries like Malta because “it doesn’t look good.” Still, exchanges continue to choose Malta and Gibraltar – famous crypto exchange Binance announced in March 2018 that the company was planning to open offices in Malta.
Marc Ostwald, DM/EM/FX Global Strategist at ADM Investor Services International Ltd, said, “This is all about where the burden of proof lies for anti-money-laundering, so wanting regulations seems very sensible.” He added that a company’s successful run in trading could easily come to an end after the addition of “unexpected” regulations.
However, these brokers are also against putting cryptocurrencies under the category of financial instruments. Iqbal Gandham, Managing Director at eToro, said, “Given that we are dealing with new and nascent technology, we wouldn’t want to simply cherry pick from existing regulation developed for other asset classes.”
Gandham explained that regulations would provide more security to consumers, open the business to more people and thus facilitate in expanding the market. He also advised the European government to study the regulations set by Japan. In 2017, the Japanese Financial Services Agency (FSA) not only provided a set of rules for crypto exchanges but also recognized a few as registered exchanges. The rules followed KYC policies to combat money-laundering and have been updated since then.
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