Cryptocurrency Master Everything You Need To Know About Cryptocurrency and Bitcoin Trading, NFTs...

Regulation Following increased frauds associated with ICOs, including cyber thefts using Multi-Level Marketing Systems and trading halts due to exit scams and possible market manipulation, different countries have setup various regulations which are continually changing. Cryptocurrencies are based on distributed ledger technologies enabling people to acquire or transfer their cryptocurrencies directly to another person without the need of an intermediary. Therefore, they are exposed to fraud. It is difficult to regulate ICOs and cryptocurrencies using a central authority since they can easily be moved across national and jurisdictional boundaries. However, countries have developed varied approaches to regulate ICOs and cryptocurrencies, depending on the nature of the cryptocurrency.

Controlling cryptocurrencies can be broken down into two forms: utility tokens and asset-backed tokens. Utility tokens hold more value than asset-backed tokens since they are essential for the holder to exchange a token for a good or service in the future, for example, Bitcoin. Asset- backed tokens may have value because there is an underlying asset which the holder of the token can attribute a value to. In most countries, asset-backed tokens are regulated, rather than utility tokens, which are not prone to fraud. ICO regulation is still under development in most countries including Australia, Canada, and France. Countries that have already developed and implemented ICO regulations are the United States, United Arab Emirates, Switzerland, Gibraltar, and New Zealand. In China and South Korea, all ICOs have been banned completely. Owing to the difference in regulations per country, ICO investors must analyze which countries to sell their coins or tokens in based on set regulations, therefore increasing the complexity in trading cryptocurrencies.

Prospective purchasers of cryptocurrencies also need to understand regulations in each country before engaging in any transactions.