Lack of Regulations and Insurance Hurts Cryptocurrency Industry

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The Asian cryptocurrency traders are facing difficulty in facing in securing their investments.  Large-scale fund managers cannot enter the mainstream market due to rising risks. Incidence of hacks and thefts is increasing. This has resulted in hefty losses, causing concern. There is further confusion about the how and what of cryptocurrency trading. Money laundering is also raising several eyebrows at the industry. Cryptocurrency is still at a nascent stage. There is no guarantee of storage of digital assets yet.

Many cryptocurrency firms desire proper insurance. In several instances, insurance is a legal need. But, obtaining such insurance is nearly impossible.

According to research, some 72 percent investors think that cryptocurrency has a future. Mohamed El-Erian, Chief Economic for Allianz, says that virtual currency will accepted more. The increased adoption of the same by enterprises will help the case.

No Clarity on Regulations

Investors have held off investing till now, as there are no fixed regulations on trading. There are several trust and infrastructure concerns clouding initiation. The increasing numbers of hacks and steep costs add to the uncertainty.

Securities and Future Commission of Hong Kong is taking efforts to regulate the platform. This may lead to need for insuring cryptocurrency assets.

Further, some platforms offer coverage with limitations.

Several cryptocurrency traders offer custody solutions. But, this is not a workable option for top players. Also, the securing process of crypto assets involves alphanumeric keys. Losing the key means the loss of assets as well. Traders are now working on solutions to get past these issues.

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