✔️ Information reviewed and updated in December 2023 by Eduardo López
One of the main points against, or at least to take into account, in cryptocurrencies is the great legal vacuum that exists around them. This is because there is still no regulation that considers them as financial assets.
That is why the issue of regulation by bodies such as the Spanish National Securities Market Commission, the Financial Conduct Authority or the United States Securities and Exchange Commission. Here, we will tell you more about this topic and how you should handle it.
➡✨ Why is there a lack of regulation in this area?
Although there is no clear reason why there is such a loophole, We could say that cryptocurrencies, being 100% new, there are no similar parameters to match. In other words, there is no point of comparison for these instruments.
Because there is no clear benchmark for comparison, the development of legislation must be done from scratch, from the beginning. All this has caused the delay to be complete, which has created the void through which we are circulating. In short, there is no legislation because it must be new, there are no bases to create it.
➡✨ Are there regulated brokers?
One broker, or many, may tell you that they are regulated. This is a lie! Actually, about 99% of platforms are unregulated. This is because there is no valid regulation around these operators.
So do not be fooled by a cryptocurrency exchange or purchase platform that offers regulation by laws and organizations. This is only one way to attract potential customers which is likely to not actually deliver on what it promises. Well, he is lying from the beginning.
➡✨The only trusted agencies
If there is a valid legal regulation, according to the experience, prestige, power and scope of the organizations, the only valid ones to back assets would be the CNMV of Spain or the SEC of the United States, For example.
So, If you see that this broker says that it is regulated by the Cayman Islands commission, you should know that this is useless. The only organizations that can really regulate an investment platform and financial assets are those mentioned above, both the CNMV and the SEC.
➡✨ How to deal with security and lack of legal certainty?
We must be aware that operating in cryptocurrencies carries risk due to the current legal vacuum. Some ways to minimize it, for example, are to operate with brokers that are trustworthy and have a good reputation in the market.
Transferring your virtual currencies from the purchase or exchange platform to your private Wallet is another efficient way to protect yourself. In addition, you should know that more and more experts are talking about the soon arrival of new laws focused on cryptocurrencies. So, it only remains to be patient and wait.