Crypto Exchanges Could Use DeFi to Avoid Regulations Morillo
Main page Opinion, US, Exchange, Crypto Market, Cryptocurrency Exchanges, Cryptocurrency, Regulations, DeFi
Hot topic
Oct. 14, 2020
87 87

The incident around BitMEX might force cryptocurrency exchanges to seek a new harbor from the regulatory hurricane. The decentralized finance (DeFi) industry could be one of the ways to survive the upcoming storm, EXANTE Co-Founder, Anatoliy Knyazev, wrote in op-eds for PaymentsSource.

Subscribe to our Telegram channel to stay up to date on the latest crypto and blockchain news.

Bitcoin Hedge Fund Pioneer Rolls Out the First DeFi Index on NASDAQ

Describing the possible outcome for the whole crypto industry, Knyazev pointed out that after the BitMEX events the risk has also grown for USDT holders as "there may be new repercussions."

"The authorities’ message is loud and clear. There will be no trades at decent exchanges without KYC. The control of crypto exchanges will resemble that of regular financial companies in Europe and the US," Knyazev wrote.

While DeFi could potentially ease regulatory tension for a while, this market may eventually bring potential troubles of its own:

"BSA [Bank Secrecy Act] is a general provision that applies to both financial companies and individuals should crypto exchange be their occupation rather than a one-time operation," EXANTE's Co-Founder added.

Even though the cryptocurrency market still has several alternatives to BitMEX in terms of privacy-focused services without obligatory KYC (Know Your Customer) procedure, this will not last long. Knyazev believes even Binance, that has not implemented any obligatory verification for the trades under 2 BTC yet, one way or the other will have to introduce "mandatory KYC, regardless of volumes."

At the beginning of October, the US Commodity Futures Trading Commission (CFTC) and the US Department of Justice officially filed charges against the BitMEX cryptocurrency exchange. The US Attorney for the District of New York indicted BitMEX CEO Arthur Hayes, Ben Delo, and Samuel Reed, along with Gregory Dwyer, on federal charges of violating the BSA.

DeFi Pulse Releases Tool to Compare DeFi Projects Risks

BitMEX’s founders Arthur Hayes and Samuel Reed stepped down from their positions as CEO and CTO, respectively shortly after the accusations. 100x Group's chief operating officer, Vivien Khoo, who has previously served as Chief Compliance Officer at Goldman Sachs in the Asia Pacific region and has also held positions with the Hong Kong Securities and Futures Commission, are now serves as interim CEO.

Access more than 50 of the world's financial markets directly from your EXANTE account – including NASDAQ, London Stock Exchange and Tokyo Stock Exchange.

Read also:
Please describe the error