Crypto-Regulatory Predictions for 2019

Traditionally, the very beginning of the new year is time to outline market trends of the outgoing year and make assumptions for the next 12 months to come. It is worth noting that it is not legal advice, but simply a personal, yet professional opinion.

I would like to begin with summarizing the developments of the previous year, which have laid the foundation for the events coming in 2019, and then make my predictions on how such developments will impact blockchain industry in 2019.

1. SEC’s policy transition from “punitive” to “educational” measures. In the most recent SEC rulings there has been a move towards imposing sanctions regarding the return of funds to investors and paying the fines rather than sentencing to “years of imprisonment”.

2. Transformation of stablecoins into electronic money. In 2018 we have witnessed the emergence of the first issuers of stablecoins, which conduct their business activities in accordance with the requirements of the EMI license.

3. Attempts to liberalize the U.S. securities regulation. Should the legislative proposals advocated by the supporters of “crypto” adoption be accepted in Congress, this can act as the catalyst of the new virtual financial instruments’ “boom”.

In the light of the trends described above, I am predicting the following events to materialize in 2019.

Most importantly, the above-mentioned trends are likely to result in the end of the “Wild West” era in altcoins trading, crypto-exchange manipulation and “bubbling” token sales. To my mind, even more exchanges will transform into financial companies in 2019.

As a result, the citizens from a bigger number of countries will be limited in accessing the websites of such exchanges altogether, and more users from non-restricted countries will find it challenging to successfully pass heightened verification procedures.

Along with that, new trading platforms are likely to appear, that will only be open to licensed brokers, who are likely to eventually knock out “crypto-trading” with pumps and dumps, liquidation of orders, to which the market has already become accustomed to.

All of this, will bring a lot more interesting and challenging tasks for lawyers, working in this sphere. This will, surely, lead to more exciting work for all of us in the legal field and this is definitely great news.

Nestor Dubnevych, Co-Founder at Legal Nodes