zondacrypto: We Need Regulation, and Now’s the Time to Do It

The crypto industry is ready for a fresh start and more regulation.

Until recently, international regulatory forces haven't shown much interest in crypto. While some markets like the United States had taken a passive approach through regulation by enforcement, almost nobody wanted to take action and create a workable framework to separate the good actors from the bad in the crypto industry.

Though this status quo approach was maintained for the majority of crypto’s existence, eventually the industry became too big to ignore. Industry participants and consumers have grown tired of “black swan” and “once in a lifetime” events. Bad actors have repeatedly set the crypto industry back and continued to diminish the reputation of what should be the future of finance.

For the crypto industry to move forward, it’s time to stop asking, “Why regulation?” and start asking “When regulation?” To have a truly fresh start, global regulators and the industry need to work together to create a workable framework that fosters innovation, supports the good actors and filters out the bad.

Adoption starts with regulation

If you’ve ever tried to convince your friends or family to get into cryptocurrency, then you definitely already know all the reasons they believe it's a scam. You can tirelessly try to explain to them that crypto isn’t for criminal activity or money laundering, or that the crypto providers and services you use are regulated, but these rebuttals often fall on deaf ears.

To their credit, those statements aren’t exactly incorrect; crypto has been used in criminal activity and money laundering and moved by unregulated services. Even if all of these activities combined made up only 1% of the crypto industry, that one percent is going to leave the wrong impression on those who may be unwilling to enter the industry.

Until we can ensure that the industry properly deals with bad actors, these arguments will always be used against adoption. For every 1,000 industry participants acting correctly, there’s going to be one company like FTX that will damage the reputation and validity of crypto. It’s not your responsibility to make sure that the one bad actor doesn’t exist – that’s the responsibility of regulation.

We need regulations set in place for this industry to succeed because people need to know their crypto providers and be assured that they are acting legitimately. Until recently, many crypto exchanges operated in an unregulated manner and many international exchanges still operate similarly today.

Just recently in the United States, Binance CEO CZ pled guilty to violating the Bank Secrecy Act (BSA) for failing to maintain proper AML programs and now faces up to three years in prison. At the same time, exchanges like zondacrypto have long held compliance as a top priority, and possess regulatory licenses in Canada and several European markets.

Without proper regulation, users will not know where to find a trusted crypto service provider and the industry will continue to suffer as the result of a few bad actors. While zondacrypto has put clients first and embraced regulations for over ten years, the crypto industry needs clear policies globally in order to create a clear and safe path toward adoption.

MiCA: Blueprint for innovation through regulation

When on the subject of regulation, the EU’s recent enactment of Markets in Crypto-Assets Regulation (MiCA) is almost always the first topic of discussion. For those opposed to crypto regulation, this was one of the largest blows to the industry. But for everyone else, MiCA demonstrated that providing regulatory clarity to the crypto industry is possible, and serves as a blueprint for future legislation around the world.

Cryptocurrency knows no borders, and the EU-wide legislation supports this notion with a framework for consistent enforcement and regulatory compliance for anyone looking to do business in Europe. A cohesive and tailored framework is essential for fostering innovation and ensuring fair competition in the crypto industry, while simultaneously maintaining robust consumer protection and upholding market integrity.

Rather than push back at regulations and jeopardize the safety of client funds, zondacrypto has wholly embraced MiCA as an opportunity to operate and better safeguard the industry. Maintaining regulatory compliance isn't new to zondacrypto; in fact, the company was already licensed in key European markets, including Estonia, Switzerland, Lithuania, Italy, Slovakia and Poland. While the crypto industry tried to run fast and break things, zondacrypto made a the decision to self-regulate and regularly met with regulators in Europe to prepare for upcoming regulation.

While MiCA’s innovation supporting measures don’t take action until 2025, zondacrypto is already ready for compliance, with its existing license in Estonia providing protections exceeding that of MiCA itself. When Estonian license requirements saw the number of licensed entities drop by 90%, zondacrypto embraced regulation and continued to operate. Now, without having to move quickly and adjust to new regulations, zondacrypto can continue to focus on innovation and building new products like the ZND platform and app.

With crypto receiving a fresh start in Europe, MiCA also presents consumers and industry participants with the opportunity to do the same and start asking whether your crypto-asset service provider is ready or risking being kicked off the market.

The crypto industry is ready for a fresh start and more regulation. While zondacrypto is committed to providing effective and compliant crypto services, we cannot rely on others to do the same. To foster both adoption and innovation, we need to stop questioning and start embracing international regulation.