The effect investments in cryptocurrencies have had during and after the pandemic is so great that it has managed to capture the attention of institutional investors, who at the time of investing have large sums of money.
Initially, the Bitcoinprojectwhich is tradable via the Bitcoin Profit site was presented to the world as a possible form of payment that would help carry out commercial transactions for individuals in a decentralized manner without the intervention of any intermediary.
The situation today is different, not only is Bitcoin used to execute payments, but it has also taken a slightly higher position, where many people consider it a value shelter asset, which is backed by the trust of its users.
On the other hand, significant controversy has been generated as a result of the fact that this type of asset is not regulated by any entity worldwide. This situation complicates the fact that Bitcoin and other digital currencies are considered in the traditional financial market, which perhaps makes many investors hesitate when investing in crypto.
The SEC and CFTC are behind a standard regulation.
Given the complex situations around cryptocurrencies during the crypto-winter phase, several companies not only had to reduce their workforces but also froze user accounts and, in the most extreme cases, declare bankruptcy.
A reasonably complex scenario has caused great controversy regarding the lack of regulatory instruments that allow establishing responsibilities not only on the exchange platforms but also on the companies operating with investment funds.
The constant search for legal elements that can control and supervise the transactions that are executed through cryptocurrencies is what makes organizations such as the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission, enter the crypto scene.
The biggest concerns of these two organizations refer to the use of cryptocurrencies as financial tools for money laundering and, in some cases, to finance terrorism.
That is why in this case, they suggest that the regulations in force in each nation be fully complied with to face this type of unfair situation and thus be able to protect the use of the blockchain network to justify actions against the customs of each society.
In second place is the protection of investors when carrying out operations involving investment funds or cryptographic loans; consequently, since it is not a regulated market, legal actions cannot be taken against those responsible.
Such is the case of what happened with the fall of the Terra/Luna cryptocurrency; it is not just regulating the exchange platforms suggested by these two institutions; it is putting an end to what can be considered fraud in the crypto environment.
Proposed changes in favor of cryptocurrency investors
There are many aspects to be evaluated and considered by control organizations worldwide that can establish regulatory standards on the digital financial market, as long as its decentralized nature does not break through, but if there is someone who stands up for the investors.
The evaluation of the risks for investments in cryptocurrencies is the central aspect, using which the managing companies of cryptocurrencies and investment funds will be requested to provide the timely and necessary information where the risks to which users are exposed before any scenario arises.
On the other hand, they must indicate with total transparency the capital capacity each cryptographic project possesses so that investors can be aware of the risks in which they are immersed.
The Sec has been harshly criticized because they are currently seeking regulation of the crypto market and have demonstrated after endless requests to create cryptocurrency ETFs that can be listed on the traditional financial market, granting users a safe and controlled option.
The applications have been denied time and time again, which at a certain point puts the intentions of this type of institution in the eye of investors.
Conclusion
Over time, cryptographic projects, such as Bitcoin, are taking more positions among financial market users. It is because they assume that digital investments can sometimes replace the purchase of shares or bonds and generate much higher profits.
We are witnessing how trading is taking over the majority of the young investment sector since it represents a comfortable option safe. However, risky in terms of possible loss of capital, but if timely and adequate investments are made; it can generate multi-million-dollar returns.
