Are cryptocurrency exchanges regulated?

Question

Cryptocurrencies are really interesting and a better financial system I believe. And being an informed citizen of the UK, I wish to know, are cryptocurrency exchanges regulated, or can cryptocurrencies be regulated?

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Moris Johnsons 3 months 1 Answer 38 views 0

Answer ( 1 )

  1. Crypto exchanges have also assumed importance due to their role in initial exchange offerings (IEO). Unlike initial coin offerings where the issue of coins or tokens is made directly to investors, with the latter responsible to assess the project’s credibility, crypto exchanges intermediate and vet an IEO through the due diligence of projects and KYC scrutiny of issuers. Crypto exchanges have therefore emerged as a key market infrastructure within the crypto-ecosystem. But there are several concerns due to which regulation and supervision is required.

    The international experience illustrates some broad principles for regulating crypto exchanges. Typically, in jurisdictions that categorise cryptocurrencies as securities or other financial instruments, licensed crypto exchanges have emerged as a point of regulation, including for the implementation of anti-money laundering (AML) and terrorism financing (CFT) laws. Recognition then entails the application of existing securities laws as in the case of the UK, Japan, or Hong Kong, or laws specifically designed for cryptocurrencies like Malta. International standard-setting bodies like FATF and IOSCO too have provided guidance from time to time.

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