Many voices have been raised in recent months asking that regulators impose on the crypto ecosystem; rules supposed to put all players in the sector on the same level and avoid situations of financial scam or piracy. But why do standards absolutely have to be adopted? Discover a story that brings you answers.
Derek’s disappointment
The story we tell you is of a man named Derek who got an inheritance of $10,000 from his uncle who died a few months earlier. For Derek, the best way to use this heritage was to buy cryptocurrencies and try your luck in the sector. For this, he followed explanatory videos on YouTube and read several articles on the subject.
After doing some research and getting all the information he needed, Derek decides to take action and buy some ethereum (ETH) cryptocurrency. He also decides to explore the world of decentralized finance (DeFi). His first investments were positive, since they generated considerable income for him. He then celebrates his success, like any good investor.
However, when Derek decides to exchange some of his cryptocurrency stock for fiat currency, transaction fails. Moreover, his transaction was suddenly blocked due to a high money laundering (ML) risk score.
Rules must be made
Faced with the worrying situation in which he finds himself, Derek decides to seek the help of specialists to receive advice on how to withdraw his money. He does not understand how his legally invested money can generate income considered money laundering. Well, the answer is simple: for the majority of exchanges, such a large investment of $10,000 still represents money laundering risk. It arouses suspicion and attracts attention.
Like Derek, millions of people around the world believe that if clear and precise rules were established, there would be no problem relating to the decentralized finance market. Thus, investors would not have a problem with cryptocurrency exchanges. Also, they would not have to deal with situations that arise when stock exchanges believe their investments carry money laundering risks.
It is time for regulators to take steps to regulate the cryptocurrency and decentralized finance (DeFi) market. Indeed, investors like Derek, whom we have discussed in this article, face situations in which their legally invested funds are considered money laundering.
Source: bitcoin news
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TCT writing
Behind the generic signature “TCT Writing” are young journalists and authors with specific profiles who wish to remain anonymous because they are involved in the ecosystem with certain obligations.
