Now that blockchain companies and blockchain solutions have become a common aspect of daily existence, it is time to take a closer look at the updates that have taken place in blockchain development. However, blockchain development tends to raise more legal questions than it actually answers. These questions encompass a number of different areas of blockchain development.
Blockchain companies that are looking to remain ahead of the curve will want to check out these latest updates and developments. To learn more about the legal updates that are slated to define blockchain solutions in the future, be sure to read on and check out the most important questions that need to be answered:
1. How Will Violations of the Law Be Handled?
Ever since Warren Buffet’s comments about the type of people that would be willing to use blockchain technology, there has been a great deal of hand wringing. Many are worried about the technology’s level of safety and want to know how their transactions are going to be safeguarded in the years to come.
The dreaded “tech veil” has finally been pierced. If smart contract code developers are found to have broken the law, they will be prosecuted. Ever since the CFTC vowed to uphold the law in this regard, unregistered exchanges have been closing their doors. The old perception of blockchain as being the new wild west is now outdated.
2. What About Decentralized Exchanges?
It was once believed that decentralized exchanges would be unstoppable. These exchanges were not interested in implementing the proper procedures getting to know customers. Now that the SEC has decided to intervene, major changes are being made. Guidance is now being offered to online platforms that are responsible for trading assets.
Know your customer procedures (also known as KYC) have now become a must. Software creators are now being fined for creating software that allows users to skirt the KYC procedures. These regulatory pushes are designed to create a safer environment for blockchain users.
3. Will Privacy Coins Be Banned?
Since privacy coin transactions are difficult to trace, the legal questions abound. While the United States is still in the process of regulating the usage of privacy coins, other countries have already taken important steps. These coins will one day be traded on regulated exchanges.
If transactions that involve privacy coins are conducted outside of a blockchain exchange, the parties involved could find themselves in hot water from a legal standpoint. The United States is currently looking to list these coins on a regulated exchange instead. Meanwhile, Japan is asking for these coins to be removed from lists. These coins will either be traded under the watchful eyes of various governing bodies or removed from the equation entirely.
4. How Is International Regulation Going To Work?
International regulators are in the process of facilitating global coordination. While governments and regulators all over the world are going to have differing takes on how the necessary regulation should take place, productive conversations are already taking place in this regard.
The framework has already been provided to United States blockchain investors. Blockchain solutions must adhere to the securities law framework that has been put into place. As foreign governments continue to update their laws, experts believe that policy harmonization will soon take place across the board.
5. Will Blockchain Systems Be Able To Remain In Compliance With New Regulations?
There are some naysayers who believe that increased levels of regulation are only going to cause more problems. They also believe that it is too difficult to make sure that their blockchain usage is in compliance with the laws that have been put into place. On the contrary, these regulations are not designed to make life more difficult.
No wide reaching solutions have been implemented at the present time but important conversations are taking place. Private keys are expected to become a thing of the past. Zero knowledge proofs are also expected to be implemented in the years to come. The guidelines and regulations are easy to follow and forward thinking businesses will have no trouble complying.
6. Is a Crypto Exchange Traded Fund Realistic?
This is one of the more common questions that is asked about crypto and blockchain development. Bitcoin stock prices have remained steady as observers wait for the highly anticipated decision regarding the proposal for a VanEck/SolidX ETF. The proposal is widely expected to receive SEC approval.
If the proposal is successful, the aforementioned fund will become the first of its kind in the United States. There are many who did not believe that such a day would ever come. On the other hand, those who are looking to bring fresh monies into this space and create a more liquid marketplace believe that the SEC’s delay in saying yes or no to the proposal is a good sign.
7. How Is Sufficient Decentralization Going To Be Defined?
The SEC is responsible for deciding on this definition and blockchain observers believe strongly in their regulatory guidance. The ethereum network is already believed to be sufficiently decentralized. This news comes directly from the commissioner of the Securities and Exchanges Commissioner, William Hinman.
These developments are important because they show a willingness to move beyond the initial comments that were made. While other SEC staffers have made inflammatory statements, none of them have been attributed to the highest levels of the decision making process. Eventually, the SEC will decide on a stage where security tokens are universally agreed to transform into a non security.