OPINION: More regulations won’t fix cryptocurrency
FTX cryptocurrency recently went bankrupt, causing many investors to lose millions of dollars.
Even though FTX plummeted, more restrictions would tarnish crypto’s freedom and should not be regulated due to cryptocurrency’s nationwide payments.
Cryptocurrency is a free market that allows individuals to exchange nationwide without a middleman. Liquid cash needs a middleman like PayPal, Apple Pay or banks.
FTX cryptocurrency exchange allows customers to swap cash or other currencies in order to trade, according to an article by the New York Times. FTX holds customers’ funds like a bank.
The company crashed after CoinDesk published an article on Nov. 2 about how the CEO of FTX, Sam Bankman-Fried, took money out of the company.
Customers were upset with this and withdrew their funds, causing FTX to crash.
The company filed for bankruptcy Nov. 11, according to an article by CoinDesk. At least $1 to $2 billion in customer money has disappeared, according to a Reuters article.
Some customers have expressed their concerns on Twitter.
https://twitter.com/1lkerguler/status/1597560117809250306
Others believe that the money Bankman-Fried used to donate should be used to reimburse customers.
https://twitter.com/Groosage/status/1595138518506156033
With this recent economic crash, some people believe cryptocurrency needs “very careful regulation,” according to a New York Post article.
However, more regulation defeats the purpose of cryptocurrency.
Not having a third party allows users to have more control over their funds, giving them transactional freedom. The more limitations placed on cryptocurrency, the less transactional freedom it has.
Cryptocurrency also allows customers to trade easily nationwide, making it very effective. A user in one country can send money to another in a different country instantly.
If governments start to regulate cryptocurrency it will make nationwide trading less effective since different countries have varying regulations.
FTX losing customers’ funds is an extreme loss, yet, more regulations are not the answer. Cryptocurrency is a free market that gives users financial freedom and reaches across borders making it unique to other currencies.
Regulations will not stop people from manipulating the market. Instead, users need to do more research on the investments they are making to avoid misinformation.
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