From all over the world we are hearing governments and other institutes expressing their skepticism about bitcoin and other cryptocurrencies. In New York exchanges are considered ‘a risk for manipulation’, while Germany thinks crypto isn’t even close of replacing fiat money. At the same time the UK calls the world of crypto a wild west.
A report from the New York Attorney General’s office says that crypto exchanges are vulnerable to manipulation, conflicts of interest and other consumer risks. The research from the NY Attorney General started in April when Eric T. Schneiderman sent letters to thirteen exchanges, requesting information about their operations, internal control points and other issues that are common in trading.
The study by Schneiderman and his office found that there’s a complete lack of accepted methods for auditing virtual assets. Therefore there is no consistent and transparent approach. This puts consumer funds at risk. Other risks for consumer, are the automated traders (bots) installed and allowed by trading platforms. This can also benefit price manipulation.
At the same time we are hearing similar sounds from the United Kingdom. The U.K. Treasury Committee wants regulations in place in order to protect investors, as was reported by the BBC. Price volatility, poor consumer protection, risk of hacks, and money laundering are among the issues expressed by the committee. They want the Financial Conduct Authority (FCA) to supervise crypto, but they are currently not legally allowed to regulate either issuers of digital assets or cryptocurrency exchanges.
The German Minister of Finance Olaf Scholz isn’t that impressed by crypto. He sees no possibility for cryptocurrencies to replace fiat currencies at this moment. He’s still worried about a possible bubble, while he also referred to the energy intensity that comes with these coins. This was reported by Reuters during a public speech in Munster. [Obviously Scholz only thinks about PoW mining, and not about PoS -red.]