The dichotomy of regulation and security are seen by some as opposing forces, and others as one that can provide unifying stability to the cryptocurrency industry. Irrespective of the views, at a juncture where scams, frauds, and misrepresentations are running rampant in the industry, regulation and security are undoubtedly a priority.
BitGo, the digital currency security company finds itself at the intersection of this duopoly, plying their trade to maintain crypto-security, while under the radar of the United States regulators. In light of security-regulation crossroads, Tom Pageler, the Chief Security Officer at BitGo, shed light on the company’s response to regulatory concerns.
In a recent interview with BlockTV, the former US secret service operative stated that regulation should “absolutely” be at the state-level over one that is self-endorsed on an institution-by-institution level. Despite several institutions using independent measures to comply with regulations, an overarching regulatory guideline would be better for the industry, claimed the CSO.
Pagelar contends that if the cryptocurrency world wants to compete on the same level as the traditional finance sector, regulation needs to be commensurate as well. He added that federal regulators should look at the virtual currency industry like they do the banking sector.
“We think that regulation is good, and its makes it so the players who are trying to do this right and actually want to mirror the banking world, just to make it quicker and faster and more disruptive do succeed and we don’t have consumers with issues.”
In order for the cryptocurrency industry to be seen as “legitimate,” players should state clearly the controls they follow and get the same verified by the big four auditors, with the same propelled by state regulators, added the CSO.
Pagelar also shed light on the growth of auditors within the cryptocurrency space, given the increasing need for third-party oversight. However, he added that these parties have to be brought up to speed given the difference between in the projects they generally handle and cryptocurrency and several key aspects will inevitable be divulged to be public as companies operate on a distributed public ledger.
Cryptocurrency exchanges, which are one of the main targets of regulatory pressure often adopt varying protocols to deal with security. On one hand, they adopt internal measures and partnerships to maintain risk compliance, like Binance which joined forces with IdentityMind to build its KYC and risk management protocol. On the other hand, exchanges like the Winklevoss’ Gemini exchange calls for increased state-regulation on the industry as a whole rather than a case-by-case system.
Furthermore, in an era of the cases like Cryptopia, QuadrigaCX, Bithumb, and Bitfinex, it is quite clear that security cannot be ignored, and in that sense, state-regulation will play a vital role.
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