Wed, July 24, 2024

Crypto Trading and Regulations

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Crypto trading used to be a free market. However, in 2019 regulators as well as central banks around the world, increased pressure on this sector. Last year, trader screening and passport requirements became part of this evolving market.

Overall, crypto trading faced more restrictions in 2019 in comparison with previous years. For example, starting from November 2019, LocalBitcoins is no longer a pseudonymous platform. The company complied with the regulations of Finland. As a result, it had to freeze the account which didn’t go through the Know Your Customer (KYC) procedure.

Moreover, regulators plant to track blockchains themselves. It is important to mention that blockchain analysis remains a sporadic exercise. However, this year it may become a requirement for more detailed tracking.

CipherTrace, which is one of the most important companies in blockchain tracking, is working on to create tools to track both coins and tokens.

 Crypto trading in 2020Crypto markets and central banks

Another news connected with crypto trading is that coin mixing became highly discouraged, especially in Europe. In 2019, Binance scrutinized the accounts that tried to mix coins after withdrawal. Also, Dutch authorities seized the Bestmixer site. Coin mixing still exists, but it may face even more significant scrutiny in 2020.

Last year, stablecoins such as Facebook’s project Libra had to deal with many issues. Facebook’s CEO Mark Zuckerberg, as well as Libra’s head, had to defend Libra in U.S. Congress. The date when Libra will be launched remains unknown to this day.

Also, the U.S. Internal Revenue Service upgraded its requirements for reporting crypto trades. From 2019, crypto owners have to provide the information about the exchange operations as well as coins received in a hard fork.  Moreover, U.S. traders and owners should keep a record of their transactions. Also, they must report capital gains made thanks to the sale of digital coins and tokens.

All of the regulations mentioned-above will affect crypto trading in 2020.


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