The cryptocurrency industry has been struggling with regulations for years now, and the main issue, for the most part, is that there are no crypto-specific regulations. Since digital currencies are a new asset class, they don’t exactly fit in with any existing regulations. That put pressure on the regulators to come up with new rules and guidelines, which many have struggled with for a variety of reasons.
First things first — regulating things is not easy. It requires time and a deep understanding of the matter, realizing all different methods that the topic of regulations affects itself, people, the world, other industries, potential benefits, potential risks, and more.
Now, the crypto industry itself is incredibly complex. But, that’s not all. It has also been evolving ever since the first day Bitcoin was launched, and it is evolving faster and faster. This means that it is constantly changing, so the state it has been in yesterday is not necessarily the same state in which it is now.
So, how do you regulate something that constantly changes so drastically and so quickly?
There are also other obstacles, such as the regulators not having a proper understanding of crypto and blockchain, and also the fact that many have been against crypto for a long time now, not even trying to understand it.
Meanwhile, the crypto industry has been developing and progressing, attracting new people, inventing new products, and more. And, all of these investors are seeking safety and reassurance, so the only thing left for crypto companies is to self-regulate by following the existing regulations as best as they can. Finhaven, for example, is dedicating a lot of its efforts towards achieving this goal.
Finhaven and FinToken
Finhaven is a Candian FinTech company providing a capital markets platform based on Distributed Ledger Technology (DLT) and digital securities that removes friction from public and private securities purchase, sale, and handling. They are now about to issue their own token, called FinToken. The token serves as a bridging point for the use of crypto as a commodity and the use of cryptocurrencies as securities. It does this through the token itself, as well as through its personal gateway, called GatewayFH.
The purpose of FinToken — or, at least, one of its use cases — is to be used to facilitate the trading of cryptocurrencies for digital securities. The project integrated decentralized finance into its platform, making it safe with security regulations, which is an important step, as the financial regulators around the world have been going after securities tokens for years now.
Ensuring that the platform is regulated in a way that security regulators like the SEC would approve is putting the project in a lot better position than many other companies of similar type.
Furthermore, users are completely safe and given full custody of their securities in their FINWallet. Settlements for all transactions occur in real-time, which makes this system excellent even for international transactions. These are the same securities that might otherwise be illiquid for years.
So, essentially, Finhaven offers to connect all issuing companies in the marketplace to new sources of capital simply by accessing a pool of pre-approved, accredited investors who can afford to invest in their business.
It is all done via blockchain technology and FinToken, and, of course, it includes all the necessary requirements, such as KYC, AML, capital rise, settlement, suitability, primary distribution, depository, marketplace, corporate action management, investor relations, and more. In doing so, it eliminates the need for external clearing agencies, custodians, central depositories, and alike, making the processes cheaper, faster, and fully in users’ control.