The AltFi view on crypto’s regulatory rollercoaster: Too hot to handle?

AltFi Weekly Leader

Oh, crypto, what are we going to do with you?

2021 has been the year of weird and wonderful trading trends, crypto very much among them.

Towards the end of 2020, we saw cryptocurrencies reach heights many had prophesied about for years, only for several coins to fall back down to earth over a matter of months.

Now, it seems as if the chaos of the market is catching up with trading platforms themselves.

Crypto exchange giant Binance found itself in hot water with the UK regulator after failing to meet anti-money laundering regulations earlier this year.

Binance has stopped offering crypto derivatives trading in several European countries, including Germany, the Netherlands, and Italy, and recently halted derivatives in Hong Kong.

In the wake of the instability, Binance announced it planned to stop crypto futures and options trading altogether in other European countries soon.

Meanwhile, many major UK banks have now blocked payments to Binance, a move that could quickly spread to other crypto trading platforms depending on what happens with the FCA’s AML review.

Sensible investing should, of course, be about long-term returns rather than short-term gains. However, many will still be drawn to the volatile trading potential of Bitcoin, and we need a more stable regulatory landscape to ensure they are protected and supported.

Tales of bank accounts being frozen, trading platforms locking users out, and regulators blacklisting said platforms need to become the exception, rather than the rule.

Earlier this year, the FCA revealed that just eight firms were meeting its stringent AML checks, and pushed back the long-awaited compliance deadline to March 2022.

Eight more months of uncertainty isn’t what anyone needs right now.

The AltFi Leader is a new weekly view for 2021 from our editorial team. We’d love to hear your ideas, thoughts, feedback and constructive criticism: editorial@altfi.com