Crypto already deals with the joint explanation of the FDIC FED on risk systems
Crypto already deals with the joint explanation of the FDIC FED on risk systems
The Federal Reserve and the FDIC (Federal Deposit Insurance Corporation) published a joint statement on Tuesday, January 3.. The paper describes the risks of keeping digital assets. But here are some of the possibilities on how crypto are concerned with network design and code.
The Fed and FDIC say that at Krypto there is a "risk of fraud and fraud among the participants of the crypto asset sector". But there are also several countermeasures and security techniques in crypto. In addition, cryptocurrency actually uses them to reduce the risk of fraud or fraud.
Nobody claims that cryptocurrency is completely incorruptible. It is also not said that crypto is immune to fraud, fraud or cyber criminal use of the code. There is no perfect software solution, just as there is no perfect company solution.
Everything in an economy is a compromise between comparative advantages. In addition, these compromises are part of a market game that is about producing the most and fulfilling most of the wishes.
But cryptocurrency offers some functions and advantages that provide more security. This not only serves to keep their cryptos, but also against fraud or fraud. However, these fraud and fraud advantages are a compromise. You get less control over your account by a centrally regulated corporate customer Helpdesk.
“Risk of fraud and fraud among participants in the crypto asset sector…”
Defi protocols are increasingly developing countermeasures against fraud and fraud. Defi is the abbreviation for "decentralized finances". Developers for these platforms constantly create scripts for fraud and fraud defense against blockchain.
For example, zero-knowledge-proof techniques are advertised as one of the great things that will appear next step forward. Crypto can combine ZK techniques with the enforcement of money laundering (AML) and KYC (Know your Customer). Therefore, you can regulate the exchange volume for authentic transactions. With ZK-Proofs, developers can implement this on a large scale. In addition, it can proactively contain solvency problems, as happened in FTX due to fake volume.
A study by the National Bureau of Economic Research (NBER) on statistical and behavior patterns on crypto exchanges showed that about 70 % of unregulated stock market transactions are wash trading. Since these upgrades are still scaled on the ecosystems, there will be less fraud and fraud.
"Legal uncertainties related to the custody practice ..."
This is an understandable point on the list of the precautionary measures of the FDIC and the Federal Reserve in relation to cryptocurrencies. After 2022, many crypto consumers would now say that there was an unfair level of ambiguity in terms of service and misleading marketing.
This was true for many companies that became insolvent in 2022 in the course of the crypto price winter. These include crypto companies such as Blockfi, Genesis, 3 Arrows Capital, FTX and more.
At the same time, many cryptocurrencies have already solved this problem before it became a real, full-blown crypto financial crisis in 2022. In fact, the leading cryptocurrency Bitcoin (BTC) is based on the idea that it could not be clearer whose money is whose blockchain:
not your private keys, not your Bitcoin. Your private keys, your Bitcoin.
It is ironic that cryptocurrency companies that had solvency crises gained their fame through Bitcoins rock shots. The reason why Bitcoin was invented was that they could be sure that their deposits were still there and they could be sure that they were not bloated by unfair economy.
"inaccurate or misleading representations and disclosures ..."
Again, according to the type of insolvency plague that we saw in the crypto industry in 2022 when customers turned to places such as FTX and Celsius and found that their crypto was gone, this is an understandable warning.
Many people who give their money to this crypto depot banks who offer return did not understand that they award an unsecured loan. The small print on websites for companies such as Celsius explained that they lend their money to these companies.
The customers considered this to be deposits. They did not know that they became creditors and that if the loan was not paid back, they would only have to be legally lost. So that was obviously very unfair. It was definitely a misleading tactic to increase your customer registrations.
The bad year for centralized financing offers a chance for Defi. Intelligent contracts, DAPPS and Web3 platforms continue to develop to combat fraud and fraud. Users will reward solutions that are simple, fundamentally solid and automated.
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