If in 2022, there was a topic that generated controversy among users, followers, and non-followers of cryptocurrencies, it was the regulation of crypto actives. This is due to the large number of crypto companies that gradually collapsed, taking with them thousands of customers.
One of the most sensitive issues in the digital financial market is the lack of legal instruments that allow investors to protect themselves from any unexpected situation where their digital assets are affected.
The decentralization of the crypto ecosystem and the volatility of the digital asset market are the two elements that have the most significant vulnerability, the first because no entity controls and authorizes the transactions that are executed in the blockchain network, and the second is linked directly with the price of digital assets. If you want more information regarding these complications, then you can check out
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The United States has been one of the countries with the most significant interest in creating specific regulations. Accordingly, the Department of Financial Services of the State of New York has maintained a follow-up since 2015, where digital assets have been evaluated and analyzed to create a legal basis that safeguards the rights of users of this digital market.
Financial investments seen from any point require education, preparation, perseverance, and perseverance to achieve the desired objectives, in short, obtain profits that allow users to generate sufficiently profitable income to maintain their capital invested in cryptocurrencies.
The rise of Bitcoin in the beginning of the year is likely triggered by a rebound where the hunger of the bears pushes the market back again, keeping it still in the crypto-winter phase.
FTX brings collapse and drives regulation
One of the least expected surprises during this crypto winter has been the collapse of FTX. Its failure prompted the need to regulate the crypto asset market both in the United States and Europe.
The fall of this important company in the crypto sector contributed to millionaire losses in asset funds owned by the company and its users, leading it to bankruptcy and, of course, the mistrust in exchange platforms and digital assets.
The fall of this company has come to be compared to the time of the collapse of Lehman Brothers, going so far as to suggest to various specialists how harmful this is for the cryptocurrency market.
We are at a point where the acceptance of digital currencies is global; they are not fictitious money; for this reason, all those crypto active exchange platforms must have internal financial management mechanisms that guarantee their users the reduction of risks of losses.
Many specialists in cryptocurrencies and financial analysts infer that projects such as Bitcoin and Ethereum have a brilliant concept that could eliminate many of the inconveniences currently affecting the world’s economies. Still, ambition and the need to be able to promote the regulation of this financial sector.
Crypto Crisis Consumer Protection Guide
After the constant falls in the cryptocurrency market, the United States government has seen the urgent need to create the appropriate regulation that allows users and investors in the crypto active market to have an instrument that contributes to everyone affected after the insolvency of crypto platforms or companies.
It is evident how the fall in the price of the various digital currencies led to the bankruptcy of multiple companies in the industry, where Celsius Network paved the way for other companies such as FTX and currently Genesis Global Capital to follow in its footsteps.
One of the measures established in the New York cryptocurrency regulation is directly related to maintaining a crypto-asset fund that, in one way or another, supports clients’ digital assets.
On the other hand, companies in the crypto sector are required to keep records updated and public to avoid possible misleading actions through unreliable marketing. This type of instrument’s main intention is to protect the final consumer of digital assets; consequently, this market is positioning itself at great speed even though it has yet to go through its best moment.
It is interesting how government entities, in their constant need for control, are establishing all those users of the digital financial market as a priority because, after the million-dollar losses that have developed over a whole year (2022), the leak is not favorable of capital that could be used if there were a tax policy for said additional income of citizens.