They don’t need to go after the protocol they can simply put legislation to regulate how exchanges and other services that allow you to trade and easily transfer digital currency operate.
They don't need the ability to regulate bitcoin. They can just treat illegal exchanges as money launderers (or terrorism funders, or whatever else the go-to argument is today) and slap them with hefty fines. Anyone using these exchanges is committing a crime and can be treated accordingly.
Anyone caught with large amounts of crypto can be treated as a criminal, the same way people who have large amounts of cash on them are treated. It's obviously harder to spot someone walking around with a hoard of crypto coins, no black briefcase required.
This is just another tool in an already very expansive toolbox. All in the name of "security".
I don't know what point you tried to make. Claiming that a protocol can't be regulated is completely irrelevant as the selling point of crypto as a currency is that it's operations are immune to regulation.
Or even just apply the regulations transitively to banks, exchanges, and money transmitters (i.e. they can only transact with their crypto equivalents that follow the same regulations).
Regulation where it's necessary (like exchanges) is understandable. Regulation of transactions between individuals and vendors for example is not reasonable. And virtual currency should prevent such regulations by its own design - i.e. there simply should be no technical way to regulate that.
You don't need to ban a protocol. You're free to play around with protocols all day, nobody cares.
What is absolutely crucial is to cut the link between that protocol and the financial system. And that is very, very simple. There are a few very centralised points where that happens, and those have to follow laws.
They are starting to get cut off already, and these kinds of catastrophes are going to drive the effort to make that happen even quicker.
I don't think it should be regulation as much as made illegal. I'd encourage all governments to put policy in place to outlaw exchanging crypto for fiat. Until that policy takes action, you can convert still trade in your crypto.
Look at the regulations already imposed on exchanges. Consider the legal and tax liabilities businesses take on by involving themselves with cryptocurrencies. Some nations have outright banned exchange of their national currency for cryptocurrency.
If cryptocurrencies were not burdened by regulations, there wouldn't be the same informal market for person to person, cash to cryptocurrency transactions.
Regulation would be the least bad approach I think. The current crypto currency direction is untenable currently with the massive amounts of fraud present.
It’d be a stupid move to ban crypto. I’m very pro crypto, but we do need some regulation. It’s too easy to lose your account with no recourse currently. So just introduce ways for companies and consumers to be good actors.
I expect they will introduce tighter regulations, i.e. requiring a license to operate an exchange. But all that's going to do is harm legitimate users of virtual currencies...
I do not want financial regulation of virtual currency. I want people to be able to decide for themselves if they understand and are willing to take on risk - if they are not, then don't. Only allowing winners and losers and warts and unicorns will allow virtual currencies to find their place.
I DO want fraud prosecution, but we already have that.
Sure it can, it can just ban crypto currencies and start fining all businesses which accept them and/or allow exchanging them for fiat currencies. While technically people still be able to transfer them I'm not sure how useful that would be in practical terms.
I agree. I think it’s actually far more legislatively contained and reasonable to just ban currency-based applications of blockchain than such a prohibition.
Regulators don’t have to ban cryptocurrency use among citizens, they only have to ban/overtax everyone trying to cash it out or to run a legal business in it, to reduce liquidity to a level when it’s more risky or expensive than regular laundering. Cryptokids may then play their encryption penny as usual.
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