Apart from passing the law to allow for fast approval of initial coin offerings, the British territory has a law in the works to open the doors to cryptocurrency exchanges and related services. And many of the countries’ moves are already having an effect, with dozens of companies - including the largest exchange in the world - announcing plans to set up offices in the small jurisdictions that have passed laws.īermuda has been a leading player. But his agency has not provided clear guidance on the line demarcating legal and illegal projects.Īll of this has opened the door for smaller countries to provide a friendlier environment, separate from private efforts - such as in Puerto Rico - to create crypto havens. In the United States, the head of the Securities and Exchange Commission, Jay Clayton, has warned that most companies that have raised money by selling cryptocurrencies have most likely not followed the law. And Japanese authorities halted the operations of several crypto exchanges this year after one of the biggest licensed exchanges was hacked. In China, the government banned cryptocurrency exchanges and initial coin offerings after many of its citizens were swept up in the frenzy and bet their savings on digital tokens.
Volatility and uncertainty have deterred some countries and caused others to hesitate in embracing crypto companies. The use of cryptocurrencies by hackers was reinforced this month when the Justice Department announced charges against 12 Russian intelligence officers accused of hacking the Democratic National Committee and said they had principally used bitcoin to fund their work. And the cryptocurrencies are hardly stable, with the prices of most having plunged in 2018 after skyrocketing last year. They have been aided by the underlying technology introduced by bitcoin, known as the blockchain, which was built to make it possible to send money without requiring approval from government agencies or existing financial institutions. Hackings and scams have followed the industry everywhere it has gone. But the drive to be a crypto nexus also comes with significant risk.
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