Be ready for anything regulation throws your way | Fyllo

Be ready for anything regulation throws your way

By Conrad Lisco, CMO

Cryptocurrency, at its core, is the story of two worlds colliding. 

The new world is characterized by open-architecture, no centralized authority to throttle innovation and global developers working around the clock. This universe is racing ahead at a daredevil pace, propelled by individual entrepreneurs, private investors and even public companies passionate about what is possible.

The old world is also working around the clock, racing to understand the landscape, imposing enough regulation to avoid chaos and building consensus on how to create a reliable bridge between what was and what will be.

In order to realize its full potential, the new world of crypto and blockchain-based experiences needs the scale that only the old world can enable — the infrastructure, the banks, the customers and the trust. And the old world of legacy institutions needs the spirit of passion and possibility that only crypto futurists, pioneers and innovators can provide.

What’s open and unregulated drives fear and uncertainty. This creates opportunities for emerging businesses with little to lose, and challenges for established businesses with much at stake. Keeping track of the speed and trajectory of regulation is vital for both, because it impacts the direction the future will take.

For any company, no matter where you are on the risk curve, there is a compelling need to be ready for whatever may happen. The future always wins, even if it’s not at all clear today exactly what the future will be, what rules will govern it, or who will enforce it. 

The tension in this struggle is multiplied by literally an entire world of agencies vying for  regulatory authority and control. It’s an agency alphabet soup: the CTFC, IMF, IRS, FDIC, FSB, IRS, the SEC and USDT (not to mention the Federal Reserve and beyond) can’t agree on the ideal level of regulation, never mind which entities should be entrusted to write and enforce those regulations in the first place. 

Here, too, the regulatory world cannot avoid action because the demands for stability are only getting louder. Choices must be made, and regulatory actions are being taken. Dozens of countries and jurisdictions have either banned cryptocurrencies entirely or severely restricted them. China, Egypt, Iraq, Qatar, Oman, Morocco, Algeria, Tunisia and Bangladesh have all banned cryptocurrency (for now), while forty two more countries have put crippling restrictions on it, according to a 2021 summary report by the Law Library of Congress. 

In the U.S. the Treasury Department has slapped sanctions on a crypto exchange found to enable ransomware while the SEC publicly denounced cryptocurrency as “rife with fraud, scams, and abuse”. Those scams don’t even have to be anything cutting-edge and exotic: scammers recently stole $1.7 million wotrth of NFTS from OpenSea Customers using a good old-fashioned phishing email. Wherever there is something worth stealing, thieves will try to steal it. 

In this kind of environment, how can executives make smart decisions about where (and when) to accelerate investments in currency, infrastructure, and beyond? How are they working to balance the fervor against the fear, knowing that while markets hate risk, they disproportionately reward those who can manage through it? 

The ability to navigate both worlds while maximizing the flexibility to move on opportunities isn’t easy, but that’s the task every executive must now face. 

It’s impossible to scenario plan for every possible future for crypto. There simply isn’t a big enough whiteboard on Earth to outline an infinite set of possibilities and accommodate infinite branching points for each.

But having the technology to turn a confusing flurry of contradictory regulatory initiatives from every government agency into a focused point of view drives serious value. And having a predictable, foolproof compliance capability enables everyone — from scrappy startups to global Enterprises — to maintain focus, drive regulatory readiness, and stay ready to move at the speed of crypto the moment opportunities become clear.

High growth, highly regulated industries are systems with significant tension in them. Like a coiled spring, when the tension is released it happens with a lot of energy.

Active, not passive, compliance is the critical pivot function that lets organizations build trust with regulators, customers and partners who crave stability, while staying on their toes and ready to move fast as the environment changes. 

In this new, hyper-ambitious, anything-can-happen industry, regulation readiness is everything. The expansion of this new world — in whatever form it ultimately takes — will happen with or without you.

The only question is whether or not your company will be ready to keep pace. And the companies that win will be those that turn compliance into a competitive advantage.

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