Rather than passively waiting for ideal regulations or hoping for a regulation-free environment, as we saw with false reports of U.S. Securities and Exchange Commission Chair Gary Gensler’s resignation, it is imperative that we shift our focus towards action grounded in expertise and sound judgement. Despite the ongoing debate regarding the adoption of a traditional finance (TradFi) framework for crypto, it is clear that regulation looms ahead. This trajectory is evident from enforcement cases in the U.S. and the issuance of prudential guidance notes from Europe and Asia. There is also a growing consensus that crypto users require protection from theft, fraud and manipulation. Addressing these challenges necessitates taking action through due diligence efforts and consensus-driven measures.
When evaluating a crypto investment in this environment, it becomes crucial to investigate the project’s governance, risk and compliance (GRC) approach, especially with regard to fraud prevention. Due diligence should show a tech GRC program informed by U.S. Department of Justice (DOJ) guidelines and smart risk mitigations that reflect planning for what is ahead. As Europe, Asia and the U.S. compete to become the global hub for crypto, those who enable regulatory technology (regtech) while avoiding reliance on legacy bureaucratic approaches will be a breakaway leader. To thrive in the crypto space amid regulatory challenges, proactive steps are vital. By prioritizing due diligence and embracing consensus-driven measures, investors and participants can shape the growth of the crypto ecosystem. Taking the lead in regulatory innovation will lay a strong foundation for the crypto’s future. Fraud prevention must be imperative to foster trust and credibility.
In order to address the regulatory uncertainty that has been plaguing the crypto landscape, it is essential to take action grounded in expertise and sound judgement. This includes investigating a project’s GRC approach, utilizing DOJ guidelines, and enabling regtech while avoiding reliance on legacy bureaucratic approaches. By taking proactive steps such as prioritizing due diligence and embracing consensus-driven measures, investors and participants can shape the growth of the crypto ecosystem and foster trust and credibility.