The sudden growth of the cryptocurrency industry into a multi-billion dollar industry has seen countries around the world frantically move to regulate the industry. The move is motivated by the need to mitigate the effects of the growing sectors to the mainstream financial system as well as preserve its stability and integrity.
The case of Canada
Players in Canada’s crypto sectors are urging the country’s lawmakers to come up with clear laws that govern the sector. The country is said to be lagging behind in putting the necessary regulations in place.
According to Joseph Weinberg from Shyft, a company that uses blockchain technology to provide identification verification, crypto exchanges in the country are operating in the dark without a proper regulatory framework. He added that until the regulators come in and offer proper guidance, many exchanges will continue operating and their guess work.
On his part, Coinsquare CEO Cole Diamond said that the industry needs to be regulated because at some point it will need to assure their customers that they can be trusted to handle their investments.
In the wake of a highly unregulated industry, many players are taking it upon themselves to induce sanity in their businesses. Many exchanges are now voluntarily reporting to the Financial Transactions and Reports Analysis Centre of Canada (Fintrac). Mr. Diamond says they had earlier approached Fintrac, which directed them to get registered. He adds that they undertook the registration because they want to operate in a regulated business environment.
According to Mr. Diamond, they took the move with hopes that having taken the earlier steps to ensure compliance, the exchange would have a competitive advantage against its rivals. However, he says this was not the case and instead the opposite happened. He says if they had not taken the move, the exchange would be five times higher in terms of revenue.
However, according to Michael Gokturk, the CEO of Einstein Exchange, early compliance will benefit exchanges in the long run. Einstein Exchange has also embrace self-regulation with Fintrac. The exchange has also taken the necessary steps to ensure that credit cards do not occur on its platform.