CEO #BLUM Vladimir Smerkis will answer these questions.
On the one hand, crypto does not tolerate regulation. The first cryptans claimed that the system would work on its own and did not need supervision.
It was liberating. One bitcoin was always one bitcoin, no matter if it was worth $5,000 or $100,000.
But the time of the first crypto-anarchists has passed. Now it is already a large industry with trillion-dollar turnover, where many ordinary people come.
And this is exactly why regulation is needed. To protect the majority of people from scams and fraudsters.
Let me give you an example: a person comes for the first time and wants to buy 1 BTC.
Previously, it was like this: you had to find a miner, come to him, give him an envelope with money, and he would transfer the cryptocurrency to your wallet at some address.
It is clear to everyone that it is impossible to work like this in the modern world. So what needs to be done to make it work?
Of course, credit cards or bank accounts come to the rescue.
When it comes to small amounts, there are no problems. But when P2P payments began to dawn and millions began to be exchanged, the situation changed.
Many people wanted to take advantage of this method, including scammers, deceiving people and withdrawing money through cards into crypto.
This is a small percentage of the total, at Binance - we conducted research. That's why banks are worried about customers being ripped off.
Since they are subject to the regulators of their countries, they are afraid of having their licenses revoked. As CZ said, "good regulations are good, bad regulations are bad."
The problem is when regulators don't understand cryptocurrencies and impose strict bans, like in China.
Although crypto assets are officially banned there, the Chinese remain active participants in the industry, using cryptocurrency to pay for goods and services. In particular, trade with Russia is currently actively conducted despite the bans.
In contrast, El Salvador has adopted Bitcoin as its national currency. You can pay for coffee, lunch, or even rent an apartment. What's more, you can get citizenship if you buy and hold #BTC .
However, this is rather an exception, as El Salvador is a small country. Large countries such as Russia or the United States will find it difficult to allow the free use of cryptocurrency.
What are states afraid of?
First of all, capital flight: citizens can transfer their money into crypto and take it abroad. This does create risks. However, it is worth noting that cryptocurrency is now easily tracked thanks to the transparency of the blockchain. Everyone can see how much money is in a particular wallet.
For example, if someone transfers Tether (USDT) illegally, the company can freeze those funds at the request of the authorities, as has happened many times before.
The US also imposed sanctions on the Garantex exchange, an OTC service with offices around the world. This limits the ability to withdraw funds to major exchanges such as Binance.
If you receive a payment from Garantex once, the exchange may not pay attention to it. But if such transactions are regular, your funds may be blocked.
Is this fair? Probably not.
There are programs and bots that check the origin of coins, but this creates additional problems and complications.
In conclusion, good regulation is necessary to weed out criminals and allow banks to open the floodgates for cryptocurrency exchange.
This will simplify the process of replenishing your balance and sending funds abroad.
Some countries are already following this path.
For example, Kazakhstan granted Binance its first license and created a sandbox for secure payment testing and tracking of transfers.
Governments are beginning to recognise the need to create working groups and discuss legislative initiatives.
Unfortunately, there is a tightening of regulation around the world. The SEC recently issued a warning to DEX exchange Uniswap, accusing it of illegal securities trading.
It won't be possible to simply ban cryptocurrency - people will always find ways to use it.
Regulators should talk to the crypto industry, banks, and users to understand what steps need to be taken to legalize this market. This will help increase the number of cryptocurrency users to billions.
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