Cryptocurrencies: Explain About Regulation and Scams Cryptocurrency can be defined as digital or virtual currency that typically appears as “coins” or tokens. A vast majority of the cryptocurrency in the present day is used in digital form, despite it making its way through credit cards and other mediums. For more, you can check out the recent cryptocurrency list in the trending mediums.
Reasons why cryptocurrency should be regulated Avoid market manipulation and safeguard Investors:
It’s not uncommon for cryptocurrency markets to be manipulated and prices to fluctuate widely. Consider Bitcoin, the oldest and most well-known cryptocurrency in the world, which reached record highs at the start of 2021 before falling sharply and losing a significant portion of its value. Therefore, it is essential to implement rules to protect investors, considering the lack of official information about cryptocurrency list and digital assets and the technological complexity linked with them.
Recognizing the threats posed by technology: Technology is developing at a staggering pace. This can be a major issue considering that modifications can make the cryptocurrency outdated. The fast-growing pace of technology has demanded the need
for information infrastructure and financial advisors in this direction. This helps the investors comprehend the risks associated with the currencies and then make informed decisions.
Money laundering: Criminal activity can be financed by any unregulated mechanism. A customer due diligence procedure resembling that of a bank is therefore necessary. This can assist in tracking the real identities of investors and confirming their whereabouts when they buy or sell cryptocurrency. Any violation of these standards should result in harsh penalties.
Accept selected coins: There are thousands of cryptocurrencies available. The majority of investors, though, are only aware of a select few of those, including Dogecoin, Ether, Ripple, and Bitcoin. Therefore, a regulatory body that can provide all information about the cryptocurrency list and digital assets’ performance, hazards, and potential is needed.
Fraud/scams involving cryptocurrencies Unfortunately, there is an increase in bitcoin criminality. Some of the frauds revolving around cryptocurrencies are: Virtual Ponzi schemes: Cybercriminals in digital currencies advertise fictitious investment possibilities and give the impression of big profits by paying off previous investors with funds from new investors. Scam/Fake websites: Scam sites with fake reviews and cryptocurrency jargon promise enormous guaranteed profits as long as you keep investing.
“Celebrity” endorsements: Online fraudsters pretend to be millionaires or well-known figures, promising to increase your investment in a virtual currency while stealing what you contribute. Rumours can be spread via chats or messaging applications of famous personalities supporting any specific cryptocurrency. This then induces investors and the scammers then sell their stakes which can then cause the currency value to fall.
Conclusion Peer-to-peer money transfers (such as those between people in two different countries) can also be quicker and less expensive with a decentralized currency than with a standard currency exchange that involves a third-party entity. Of course, cryptocurrencies have the power to change money transfers in the future, but considering their digital medium, it is best advisable to research before investing.
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