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ShiftCentral / Cryptocurrency and market intelligence a critical relationship

Cryptocurrency and market intelligence a critical relationship

The cryptocurrency market continues to ebb and flow.

Cryptocurrency is not going away anytime soon, so it’s imperative that financial institutions who are considering trading them keep on top of regulation and compliance in relation to it.

Examples of developing crypto compliance regulations include determining how they’re traded and how they’re taxed. Those on the front lines - whether part of a financial institution, an independent wealth manager, or anything in between - need to stay informed to avoid running afoul of the law.

Crypto regulation in the US

The US Securities and Exchange Commission is looking to get a handle on the matter at the federal level.

Recently, the SEC has been looking in particular at brokers. It believes the ICO market is rife with fraud, and as no bank on Wall Street trades cryptocurrencies, it’s the smaller brokerage firms and wealth managers who are coming in for scrutiny.

The SEC isn’t the only government body paying attention. It’s recently been highlighted that - contrary to assertion by some corners of the internet - cryptocurrency trading is subject to the rule of the IRS, just like any other form of property ownership. Despite the fact that it’s relatively intangible, and the SEC isn’t sure how to regulate it, your Bitcoins are still subject to regular tax regulations.

Monitoring regulatory developments

From these two examples, it’s evident that the status of cryptocurrency is still up in the air when it comes to regulation. On one hand you have the SEC saying they’re trying to figure it out with small firms because it hasn’t found a place on Wall Street; on the other, the IRS is giving it enough legitimacy to tax people for trading in it.

With this uncertainty and lack of clarity, market - or more specifically, regulatory - intelligence can help.

Tech” has a tendency to be used as an umbrella term in information-gathering, but it’s essential for any company involved in finance to be more specific than that. One approach would be to consider things in terms of what’s currently regulated in cryptocurrency and what has yet to be determined, adjusting processes and procedures accordingly as developments occur.

With it still essentially in its infancy, wealth managers need to have a consistent understanding, and reliable source of knowledge to continually make informed strategic decisions in working within the law, and advising clients appropriately.

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cryptocurrency and market intelligence