Cryptocurrency was supposed to solve a real problem, but that didn’t happen


The New York Times chose 5 events and trends that could impact on the sharp depreciation of the major cryptocurrencies. AIN.UA results abridged translation of the material.

The lack of regulation of infrastructure and exchangers

Most cryptocurrency trading are outside the United States in the absence of regulatory oversight. It gives more freedom to investors, but is fraught with risks.

For example, researchers from the University of Texas has published materials indicating that manipulation of the Tether cryptocurrency. Its creators, the exchange Birfinex, allegedly used a token to artificially raise the value of bitcoin.

On 20 November the press reported that the U.S. Department of justice is investigating price manipulation with the use of the Tether. Thought that each coin will be secured by a dollar, but the managers Birfinex and Tether are unable even to prove the existence of their Bank accounts.

Chinese exchange OKEx, in turn, changed the work rules without prior announcement of the changes. According to hedge Fund Amber AI, because of this, the customers lost millions of dollars. In OKEx apologized for the order changes, but not acknowledged and not compensated for the damage, explaining the suppression of the chaotic trade.

Regulatory pressure

Where the authorities still made it to the oversight of the cryptocurrency market the situation develops not in the best way.

The Commission on securities and exchange Commission (SEC) has begun to issue fines to companies that violate the rules of dealing in securities during the ICO — initial issue tokens. In November, the SEC fined two firms $250 000 and forced them to recognize the tokens of securities, with all the attendant obligations.

Cryptocurrency is run by the developers is not always good

In the NYT are paying attention to the series hardforce — division of the main blockchain cryptocurrency. So, first Bitcoin, due to disagreements within the community, last year separated the Bitcoin Cash.

But the new coin has existed in this form for long. In November Bitcoin Cash also went through hardwork: now there’s Bitcoin and Bitcoin ABC SV. According to the newspaper, the new coins caused chaos in the market, and the exchange did not immediately learned to work with the new coins.

In addition, frequent hardforce questioned one of the key qualities of cryptocurrencies — their limitations. For example, produce only 21 million bitcoins. But what’s the point in this restriction, if the number is increasing at the expense of clones.