CRYPTO REGULATION AND INNOVATION: STRIKING THE OPTIMUM BALANCE

AUTHOR – GARIO MENDEZ, STUDENT AT CHRIST (DEMMED TO BE UNIVERSITY), BANGALORE

BEST CITATION – GARIO MENDEZ, CRYPTO REGULATION AND INNOVATION: STRIKING THE OPTIMUM BALANCE, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 4 (1) OF 2024, PG. 386-394, APIS – 3920 – 0001 & ISSN – 2583-2344.

ABSTRACT

The cryptocurrency industry’s continuous growth, combined with a succession of exchange failures, has spurred several debates about the necessity for regulatory frameworks. Regulators worldwide have expressed worry about the hazards presented by digital assets, with some attempting to control as much of the space as feasible. Cryptocurrencies have been associated with fraud, money laundering, market manipulation, and other financial crimes, which have undermined the credibility of the industry and posed significant challenges for regulators. 

One of the main attractions in the market is the continuous innovations in the crypto space. The main attraction in the crypto market is the limited regulatory mechanisms prevalent, which provides for the investors and traders, with various opportunities for innovation. Over the past few years, various new cryptos have been introduced, along with newer innovations such as Defi and NFT’s.

In the fast-changing ecosystem of cryptocurrency and blockchain technology, regulators, industry participants, and stakeholders face a tough dilemma when it comes to regulation and innovation. Various reasons emerge, which pushes the agencies to adopt policies for crypto regularions. While some individuals argue for implementing strict regulations in the crypto space, others argue against the same, stating innovation hurdles.

This research investigates the vital importance of finding the right balance between regulatory monitoring and enabling innovation in the cryptocurrency ecosystem. Key words: Crypto regulation, Innovation, Money-Laundering, investor protection