Caitlin Long Warns the Crypto Community About Bermuda’s New Crypto Regulations - Bitcoin Exchange Guide

The cryptocurrency industry is asking for regulations in the space. It is important to have a legal framework that would allow all interested parties in the market to invest in digital assets knowing that their funds are safely stored and protected. However, it is sometimes difficult to achieve this.

In a recent thread on Twitter uploaded by Caitlin Long, a Wall Street veteran and former president of Symbiont.io, warns users about specific regulations to exchanges and custodians.

The first thing she mentioned is that users should be careful if there is a regulatory agency asking for a custodian or a crypto exchange to have a minimum amount of assets on-hand to withstand the withdrawal for all client assets.

1/ CRINGE ALERT: if the regulator of your #crypto exchange/custodian requires this, run! "A DAB (digital asset biz) shld have a minimum amount of assets on-hand, within the organisation, to withstand the withdrawal of all client assets." @BermudaMonetary https://t.co/dQYs5T51lg

— Caitlin Long [Jan/3➞₿🔑∎] (@CaitlinLong_) January 5, 2019

She is making reference to the Digital Asset Custody Code of Practice presented by the Bermuda Monetary Authority on December 2018. Although this is a draft, it could be very harmful to the whole cryptocurrency industry.

Long explains that she would never agree to store clients assets in a firm that would have to meet low requirements. She is making reference to the fact that there are no specific requirements asking Digital Asset Businesses (DAB) to hold clients funds 1:1.

Long says that in crypto there is no lender of last resort so if the custodian or exchange does not hold the asset it might not be able to meet the withdrawal requested by the client.

8/ …so "assets" could include all kinds of IOUs, rehypothecated claims etc. There's no rqmt to hold 1:1 REAL CRYPTO–but remember there's no lender of last resort for #crypto, so if your exchange/custodian doesn't hold the real thing it may not be able to meet your withdrawal..

— Caitlin Long [Jan/3➞₿🔑∎] (@CaitlinLong_) January 5, 2019

Caitlin Long says that Bermuda can do better and that the regulatory agency in the island is able to deliver improved regulations for the cryptocurrency space. She ended the thread saying that she would never support a pension agreeing to a vague and one-sided contract used by exchanges today.

The cryptocurrency market is requesting more and better regulations in order for it to expand and reach new investors. Virtual currencies were born with the intention to change the financial world. If they want to do that, regulatory agencies around the world would have to make a better effort to protect investors and financial institutions.

There are some other countries such as Japan or Malta that are creating a clear and safe regulatory environment for companies to settle their operations in the country. In 2019, the space is going to experience an increase participation from regulatory agencies.

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