Cryptocurrencies are still a relatively new asset class, but that doesn’t mean they haven’t become wildly popular over the last few years, nonetheless. Since the pandemic, when many fiat currencies were dealing with a lot of trouble as a result of depreciation, people have noticed that digital coins and tokens are a safe choice. If you’re just getting started in the ecosystem, you’ve most likely felt intimidated once or twice as a result of the sheer amount of information you have to deal with in order to be an efficient and successful trader. Concepts such as smart contracts, p2p Bitcoin, digital wallets, decentralized applications, token standards, and consensus mechanisms are just a handful of the ideas you must become familiar with before you can start trading.
As the marketplaces change so often and so quickly, with fluctuations and volatility being the only constant in the environment, traders need to do their research and be aware of the latest movements in the ecosystem. Since cryptocurrencies operate on systems that are entirely decentralized, they are also significantly more vulnerable to shifts than their standard counterparts. Spending all your time on the market can lead to issues such as over-trading or FOMO, but there are some big announcements that you must be aware of due to their potential to influence the larger marketplace.
Regulations in South Korea
South Korea is largely considered to be one of the largest crypto hubs in the world, with the people consistently ranking among the most enthusiastic traders in the world. There are approximately 20 million digital asset investors in South Korea, meaning that roughly a third of the population owns crypto tokens. The cumulated value of these holdings is approximately 104 trillion won, or $75 billion. However, things have shifted in a new direction in this marketplace recently. Financial regulators have been moving to design and bring consistent crypto guidelines into the marketplace as the country moves to open the digital asset market to institutions as well.
This is a big step as these larger investors have the potential to bring quite a lot of growth to the ecosystem, as the ventures they perform are much more considerable than those of the average trader. The new guidelines will deal with nonprofit crypto sales and include much stricter standards for exchanges and crypto platforms as well. As of May 20th, the Financial Services Commission announced they had finished work on the measures, which should take effect at some point in June. All nonprofit entities dealing with cryptocurrencies will need to have at least five years of audited financial history in order to be allowed to both sell and obtain digital assets.
Companies will also have to establish their own internal Donation Review Committee in order to determine the appropriateness of every single donation and the liquidation strategy associated with it. Liquidation is expected to take place right away upon receipt, with only the coins listed on at least three large trading exchanges being eligible for use. Crypto exchanges will only be allowed to liquidate the user fees that are paid in crypto and only to cover the operational costs. The sales will be capped at daily limits, which are set to be no higher than 10% of the total amount planned.
Securities and Exchange Commission
The United States Securities and Exchange Commission has been at the center of considerable discourse among members of the crypto community over the last few years. The regulator’s frequent clashes with the crypto ecosystem are the reason, as the institution has repeatedly taken a rather critical view of digital currencies. Many investors hoped this would change following the presidential elections, as the current administration is known for its positive views regarding cyber holdings. However, the Commission has recently delayed making a decision on Ether staking and XRP ETFs.
Investors are somewhat disappointed, but many analysts expected this, as this has been the SEC’s strategy in the past. Right now, experts believe that the Commission is more likely to approve a Litecoin ETF first. The SEC is currently dealing with a flood of ETF filings, many of which are approaching their deadlines in June. The Commission received a slew of ETF altcoin filings following Trump’s election and the resignation of the former Chair. Right now, the SEC is regarded as much more crypto-friendly, as several exchanges and platforms that were facing legal action had their cases dismissed.
Crypto in New York
New York City Mayor Eric Adams has launched a crypto advisory council as part of his plan to make the metropolis the uncontested crypto capital of the world. This is part of the ongoing tendency among lawmakers and officials from all over the world to see cryptocurrencies as much more than passing trends, and approach them in a way that ensures the technology will be used to improve the lives and financial stability of members of the general public.
As part of the plan, crypto experts will join the effort in order to navigate the landscape more efficiently and help find the best solutions for both the city and the larger crypto ecosystem. Tokenization and the many potential uses of the blockchain have made people more open to the possibilities offered by fintech innovations. As a result, most believe that the only way forward is by keeping up with the ways in which the ecosystem is evolving. Senator James Sander Jr proposed the introduction of the Blockchain Study Act in February, an initiative that would build a crypto task force in order to investigate the current state of digital currencies.
To sum up, the crypto marketplace continues to grow and evolve, integrating new functionality and moving closer to the mainstream every day. If you’re looking to support the growth and development of your portfolio, make sure to do your research on what the ecosystem actually entails to figure out the best course of action for your list of holdings. Remember that taking things slowly and being attentive and aware of the shifts and changes in the market is the only way to remain profitable.
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