{"id":16858,"date":"2023-01-25T05:50:07","date_gmt":"2023-01-25T05:50:07","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/crypto-regulation-is-like-a-flimsy-umbrella-in-a-monsoon-op-ed-bitcoin-news\/"},"modified":"2023-01-25T05:50:07","modified_gmt":"2023-01-25T05:50:07","slug":"crypto-regulation-is-like-a-flimsy-umbrella-in-a-monsoon-op-ed-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/crypto-regulation-is-like-a-flimsy-umbrella-in-a-monsoon-op-ed-bitcoin-news\/","title":{"rendered":"Crypto Regulation Is Like a Flimsy Umbrella in a Monsoon \u2013 Op-Ed Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
\n<\/p>\n

\n
\n<\/header>\n
\n<\/div>\n

You know what they say, \u201cwhen life gives you lemons, make lemonade.\u201d But when it comes to protecting your crypto funds on centralized exchanges (CEXes), the old adage should be \u201cwhen life gives you regulations, make a self-custody wallet.\u201d Self-custody is undoubtedly a better solution for protecting the interests of customers in crypto. Regulation alone is not enough.<\/strong><\/p>\n

The following opinion editorial was written by Joseph Collement, General Counsel at Bitcoin.com.<\/span><\/em><\/p>\n

Don\u2019t get us wrong, regulation is important. It\u2019s like a flimsy umbrella on a sunny day \u2013 better than nothing, but not something you want to rely on during a monsoon. Just ask the folks at Gemini, who despite being the \u201cmost regulated\u201d CEX out there, still managed to lose all of their \u201cEarn\u201d customer money. Talk about \u201cearn-ing\u201d a bad reputation! Ouch.<\/p>\n

\"Crypto<\/p>\n

But let\u2019s be real here, the crypto world is like the Wild West. And let\u2019s be honest, the U.S. Government is like the sheriff who just got to town, trying to make sense of this new frontier. They\u2019re like the Dad at a teenage party, trying to understand what\u2019s going on, but ultimately just getting in the way.<\/p>\n

Working 5+ years full-time in crypto as a lawyer, I\u2019ll dare to say that the problem with CEXes is not regulation (or the lack thereof), it\u2019s the business model itself. When an entity takes control of customers\u2019 funds, they\u2019re incentivized to trade and gamble with that money, like a stockbroker playing blackjack with your retirement savings. Meanwhile, customers are left holding the bag (or in this case, the empty wallet) when things go south.<\/p>\n

\u201cRegulated\u201d CEXes also commingle services such as trading, custody, and market making. Unlike on a traditional regulated stock exchange platform, users on many CEXes face-off against the exchange itself on a trade, as opposed to another client of the exchange. This gives CEXes the ability to trade ahead and against their customers, a well-known practice perpetrated by top-tier exchanges, even in the U.S.<\/p>\n

And let\u2019s not forget about hacking. To date, about $5 billion of users\u2019 funds have been stolen in the past 3 years, with just under $3 billion just in 2022. But don\u2019t worry, the DOJ is always here to protect you. With their massive blows to well known crypto criminal organizations like Bitzlato, they\u2019ll make sure that your funds are safe.<\/p>\n

Complying with regulation costs CEXes billions of dollars in revenue, and the cost is often passed onto the customer. CEXes are spending more money on legal and compliance than on product development. This month, Coinbase invested $50M in its compliance department as per a settlement with NYDFS but cut out 20% of its workforce. Lawyers are blockers not UX designers. And if you follow their advice blindly, you risk ending up with the good old cookie pop-up.<\/p>\n

In all seriousness, self-custody is the way to go to protect your crypto funds. Honest business practices and non-custodial wallets are the key to protecting the interests of investors and customers in the crypto world. Instead of relying solely on regulations, let\u2019s shift towards a more decentralized model, where users have full control over their own funds and are not at the mercy of centralized entities. Only then can we truly ensure the safety and security of users\u2019 funds in the crypto world.<\/p>\n

\n
\nTags in this story
\n<\/h6>\n
business model<\/a>, Centralized Exchanges<\/a>, Compliance<\/a>, control<\/a>, Crypto<\/a>, crypto world<\/a>, crypto-custody<\/a>, custodial wallets<\/a>, Customers<\/a>, Decentralized<\/a>, ethical business<\/a>, funds protection<\/a>, Government<\/a>, Hacking<\/a>, investment<\/a>, Investors<\/a>, Joseph Collement<\/a>, legal<\/a>, non-custodial wallets<\/a>, Opinion article<\/a>, Opinion Editorial<\/a>, product development<\/a>, Regulation<\/a>, Regulations<\/a>, regulatory climate<\/a>, Reputation<\/a>, Responsibility<\/a>, revenue<\/a>, safety<\/a>, Security<\/a>, Self-custody<\/a>, stockbroker<\/a>, trust<\/a>, user-controlled<\/a>, Wild West<\/a><\/div>\n<\/div>\n

What are your thoughts on self-custody as a solution for protecting crypto funds? Do you agree that it\u2019s a better alternative to relying solely on regulations, or do you think there\u2019s a different approach that should be taken? Share your thoughts in the comments below.<\/strong><\/em><\/p>\n

\n
\n<\/div>\n
\n
\nGuest Author <\/h6>\n

\nThis is an Op-ed article. The opinions expressed in this article are the author’s own. Bitcoin.com does not endorse nor support views, opinions or conclusions drawn in this post. Bitcoin.com is not responsible for or liable for any content, accuracy or quality within the Op-ed article. Readers should do their own due diligence before taking any actions related to the content. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any information in this Op-ed article.
\nTo contribute to our Op-ed section send a suggestion to op-ed (at) bitcoin.com.<\/p>\n<\/div>\n<\/div>\n

Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

\n

Disclaimer<\/strong>: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com<\/a> does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.<\/p>\n<\/div>\n

\n