In the realm of cryptocurrencies, validation through regulation has been acknowledged as a significant element to catalyse mainstream adoption. Nevertheless, a recent discovery by Cointelegraph raises questions about the authenticity of these claimed regulatory approvals, invoking caution.
The crypto firm named Bitspay, reported to be fourth-largest by daily trading volumes on CoinMarketCap, had been alleged of displaying false license information, claiming to be regulated in Estonia. Now, after having faced scrutiny, Bitspay has quickly erased its reportedly fraudulent license data, shaking trust in the crypto community.
Until the scratching of license information, Bitspay firmly insisted that it was regulated by Estonia’s Financial Intelligence Unit (FIU). However, when the supposed regulatory status was challenged by Cointelegraph, Estonia’s FIU responded stating that Bitspay did not possess any valid license in the country.
This case illustrates repercussions concerning the credibility of other cryptocurrency platforms claiming regulatory status as well. Several platforms have reported considerable daily trades at CoinMarketCap, but their details about regulation and licenses remain under a shroud of ambiguity, as evidenced by Bitspay’s example.
There’s a certain degree of faith users put in platforms that ascertain they are controlled by specific regulations. It lends a sense of security and avoids the fear of direct interactions with murky, unregulated elements. However, the Bitspay incident may force individuals to rethink their assessments on trusting these alleged licenses.
CoinMarketCap has continuously faced criticism for providing possibly inflated exchange trading volumes. While it indeed ranks exchanges based on reported volumes with scoring systems, the credibility of such systems may be questioned as this incident reminds everyone – “don’t trust, verify” is not just an empty adage in the world of digital currencies.
Nevertheless, Bitspay’s actions do not represent the entire crypto market. Many companies, firms, and exchanges operate under legitimate licenses and adhere to regulation in the true sense. Users should conduct careful research before opting for a platform.
This episode leverages both the necessity and flaws of crypto regulations. It reasserts the importance of regulation in boosting credibility and ensuring secure transactions. However, on the underside, false claims about regulatory status can immensely harm the trust users place in the industry and in regulatory bodies themselves. Hence, regular verifications and rigorous checks become crucial to guarantee authenticity.
Source: Cointelegraph
