The bear market is an opportunity for crypto companies to turn, says Chainalysis
The bear market is an opportunity for crypto companies to turn, says Chainalysis
- After the decline of Terrausd, there is among the political decision -makers of general consensus that crypto needs stricter rules
- Nevertheless, Todd Lenfield from Chainalysis sees the opportunity to build legitimate companies in a fast -moving industry
Despite a shrinking cryptom market, the blockchain analysis company Chainalysis believes that the recent consequences are an opportunity for aspiring companies, especially when it comes to strengthening the image of the industry before the law.
After the collapse of Terrausd in May, several regions took action worldwide to take action against what they found as a systemic threat to global financial stability through stable coins and crypto. The legislature also tried to strengthen consumer protection that results from risky crypto bets.
terra got into trouble when his algorithmic stable coin VAT drastically fell under his intended 1-to-1 parity to the US dollar due to a critical error, which effectively put its price into a "death spiral" as soon as he was.
other stable coins such as the USDC from Circle and the USDT from Tether claim to be covered by a basket of reserves, including cash, commercial paper, bonds and means of payment.
Todd Lenfield, Country Manager of Chainalysis for Australia and New Zealand, Blockworks said in an interview that regulation will develop.
"I don't think anyone shouts back before, but we don't want to suffocate the industry either," said Lenfield.
The downfall of VAT surprised many borrowers, especially those who had taken out sub- or unsafely loans in order to penetrate deeper into the Terra ecosystem. These borrowers were forced to accept additional claims and liquidations that led some of the largest lenders in the industry to register bankruptcy.
Bitcoin's Bellwether cryptocurrency has suffered a blow since then and has fallen by almost 50 % since Terra had signs of a capital escape to $ 20,000.
EU-politicians at the end of the last month achieved a Approval for the long-discussed bill for the markets for crypto-assets (Mica) that aims to set up rules for the treatment of digital assets, including stable coins, in the block.
mica tries to find out where the existing financial services laws are inadequate, especially with regard to how stable coins should be monitored and which total reserves should have these projects available. The draft law also aims to proceed against money laundering by demanding that no compliant service providers in a public register be listed in the hope of lifting them out as bad actors.
The manager of Chainalysis sees this as a time of growth
While the effect of effects in preventing the contagion currently to be prevented on the entire market could have argued, the general consensus among political decision -makers is that crypto needs stricter rules - quickly.
The concerns of the regulatory authorities are now focusing on the well -known topic of money laundering illegally obtained profits and the bypass of sanctions, including the bypass of sanctions by Western allies as a result of its invasion in Ukraine in February.
Jason Allegrante, Chief Legal and Compliance Officer The Institutional Custodian Fireblock, Blockworks said in an email that it was important for the cryptocurrency industry to clearly define their positive applications.
"A reason is that we as an industry did pretty bad work to explain the positive applications for blockchain technology, including applications that actually promote the interests of law enforcement," said allegrant.
he continued: "A second reason is the perception that these markets are largely unregulated and work without sensible supervision. In the end, Mica [and other Like IT] will help to minimize this concerns by accepting industry."
, according to Lenfield from Chainalysis, there is a silver stripe on the horizon somewhere between ominous dark clouds.
"We always said that if the market occurs, this is our chance to grow," said Lenfield. "We see crypto companies such as traditional stock exchanges that try to offer different types of services and give their customers added value that does not differ from other companies and what they would do in a downturn."
The main focus of Chainalysis is to support the law enforcement authorities in their attempt to catch illegal actors by analyzing blockchain data and addressing addresses of criminals.
"This room moves so quickly that we have to turn around and think about how we deal with changes that happen in the blockchain room," said Lenfield. "While it grows and we humans want to get on board - we want to build this trust - we have to do this by knowing and sharing some information or using regulations that work with it."
Allenbaten from Fireblocks agrees that a global, principal -based consensus on certain norms of business, including measures to combat money laundering, must be included in the latest projects in the industry.
"Certain companies will do this better and more effectively than others, and those who can adapt will be successful in many cases," he said. "Regulation brings clarity and stability, it is often the case that stable markets with clear business rules become more attractive for newcomers."
bring the best crypto and findings of the day into your inbox every evening. .
The Post Bear Market a Chance for Crypto Businesses to 'Pivot', says Chainalysis, is not a financial advice.