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When they emerged in 2008, cryptocurrency markets were seen as a kind of Wild West, with the blockchain fulfilling the role of the kindly sheriff who kept assets secure and identities anonymous. Fast forward to today, new investment demands and integration with the traditional financial system require transparency, along with greater regulation and compliance.
“Today’s investors are very concerned that any digital asset or cryptocurrency they transact with has a legitimate source,” says Lance Morginn, president of Blockchain Intelligence Group (BIG). “Institutional and retail investors want to know that the cryptocurrency they’re investing in is clean money and hasn’t been part of illegal activity or crossed any regulatory boundaries.”
BIG’s BitRank Verified tracks cryptocurrency and provides a transaction risk score to help institutional investors comply with regulatory standards; its QLUE platform provides deep insight into cryptocurrency transactions for law enforcement agencies tracking criminal activity.
Lance Morginn“ Increasing compliance enhances credibility of an asset class like cryptocurrency, and that will fuel further increases in price.
President, Blockchain Intelligence Group
“Wider adoption requires that safety and regulation are in place and people know that they’re not going to lose any of their hard-earned money to fraudulent activity,” says Mark Binns, CEO of BIGG Digital, which owns the Blockchain Intelligence Group and Netcoins. “Once people know that the endpoint providers and trading platforms are operating legal platforms, have proper checks and balances in place, do proper pricing and fair trade execution, and have secure custody of assets and proper insurance, adoption will flourish.
“Even retail investors are increasingly aware that it is essential to ensure that their crypto assets be held by a money services business registered with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and has a privacy policy published on their website,” he says. “It’s important that people understand who they’re doing business with.”
For this reason, Netcoins, another BIGG Digital company, was built on transparency as well as technology, says Mr. Binns. “We’ve made it a priority to show who is behind the company – real people with personal reputations and experience in this space or the financial world. On a lot of these platforms, there’s no team, no real contact information for someone to reach out to and no one who can personally be held responsible if something goes wrong. Doing your due diligence as an investor requires knowing who you’re transacting with.”
Investors have to be cautious, stresses Mr. Morginn. “Increasing compliance enhances credibility of an asset class like cryptocurrency, and that will fuel further increases in price. Right now, we’re still hearing about unfortunate cases where people are falling victim to fraud – you invest some money and then are told you need to put another $5,000 in before you can withdraw it, for example. There are pyramid schemes. You really need to do your homework and invest only through credible platforms.”
In the near future, global regulation and greater transparency through innovations like DeFi, stablecoins and others, will unleash the next waves of investment opportunity, and the blockchain offers the potential to exceed cash in terms of security, he adds. “Most money laundering is in cash, and it will always be that way. We have much greater visibility in crypto transactions through tools like those we offer. From day one, our goal had been to bring crypto currencies mainstream.”
Advertising feature produced by Randall Anthony Communications. The Globe’s editorial department was not involved.