Cryptocurrency Industry Requires SEC-Styled Whistleblower Program for Regulation and Growth
Summary:
This article discusses the need for a whistleblower program in the cryptocurrency industry, similar to the Securities and Exchange Commission's (SEC) program. Such a scheme could offer monetary rewards and protection to insiders who report violations and help clean up malpractice in the crypto realm. Collaboration with the SEC and regulators in critical crypto jurisdictions could create a global standard for whistleblowing in the crypto industry. This initiative could prevent financial disasters through proactive measures against fraud and misconduct, thus building trust and stability in the industry. If not addressed promptly, the market remains exposed to manipulation, fraud, and damaged public trust, hindering the growth of the cryptocurrency industry.
Tau with the Securities and Exchange Commission (SEC) and cryptocurrency aficionados has been a recurrent topic. However, the crypto realm can definitely learn a thing or two from the SEC, especially its whistleblower standard. This is a scheme that even the most fervent opponents of the SEC find tough to criticize. The program's design is to incentivize insiders to reveal breaches in securities laws by offering pecuniary rewards and safeguarding them against revenge. Cryptocurrency, to prosper in the coming years, must rectify corrupt practices, and employing a whistleblower policy type after the SEC's may be beneficial, tailored to crypto-centric requirements. Active collaboration with the SEC and legislative bodies in significant cryptocurrency regions - including Hong Kong, the United Arab Emirates, the European Union, and other growing crypto spaces - is essential for evolving a universal whistleblowing yardstick for the crypto sector. The introduction of whistleblower protection and reward schemes globally can likely alleviate some risks induced by the knowledge gap between the users and the administrators of the crypto platforms.
Sorting out such a scheme is a daunting task. However, without making an effort, we still render our industry susceptible to the risk of illicit operations and deplorable ethics by not providing enough defense to those who can bring out misdemeanor. The requirement for a worldwide joint whistleblower benchmark is evident. The SEC and the Commodity Futures Trading Commission programs embrace components that the crypto realm can emulate. However, a global crypto industry needs a more exhaustive and explicit scheme that understands its intricacies.
It is open to crypto exchanges and other participators of the ecosystem to liaise with regulators for establishing a worldwide consensus on a whistleblower program focusing exclusively on crypto. A program designed exclusively for our industry could cover domains such as misdeeds at centralized exchanges, ICO frauds, and deceptive projects, manipulation of decentralized finance (DeFi) protocols, breaches, and sudden pulls, to mention a few. Numerous noteworthy instances could have been averted if a plan like this was already put in place. Any circumstance where a fiduciary duty was breached and someone knew about it could have been prevented if appropriate safeguards and incentives were not just established but, globally aligned. This could have potentially happened at FTX, QuadrigaCX, OneCoin, JPEX, and more.
Such instances accentuate the severe repercussions of deficient supervision and how instrumental whistleblowers can be in circumventing financial catastrophes. They serve as powerful reminders of the indispensability of stringent schemes that enable people to report illicit activities without fearing revenge, thereby making the crypto marketplace safer and more transparent.
A significant segment of us in the industry is working assiduously towards creating a more fair and equitable financial system and these are tasks that should not be hindered by the misdeeds of a few. A whistleblower scheme, to have an impact, must be put in place by regulators who can enforce action against wrongdoers and simultaneously protect those who wish to reveal these acts but could face considerable risks. If linked to licensing, where the license application may be deemed unserviceable without adhering to whistleblowing standards, it could expedite worldwide acceptance of such schemes.
Exchanges continue to play a pivotal role in onboarding people into crypto. However, with asset managers offering ETFs entering the scene, the need for exchanges to step up their game, restore faith and be recognized as reliable pathways into digital assets is even greater. The SEC serves as an unlikely source of inspiration, however, this pressing call-to-action arises at a culmination point for our industry. As increased scrutiny and calls for regulation progressively surface, a crypto whistleblowing standard might not just be considered a compliance tool but a basic constituent for forming a lasting and ethical crypto economy.
The time to counter this is now, as the potential bull run gains momentum, it is crucial for us to tackle misdeeds, regain the trust of newcomers, and restore confidence amongst users who may have been affected by the wrongdoings of unethical individuals. The market may remain prone to manipulation, fraud, and loss of public trust if the industry does not react promptly, thereby limiting the growth and maturity of the crypto industry and hindering the progression of constructing a superior financial system that caters to everyone. Our society deserves better.
Published At
2/17/2024 2:59:54 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.