While re-watching some old Game of Thrones episodes, I was reminded how this show became so popular. Like all great fiction, it speaks truths about human nature and exposes several fundamental flaws in our psychology. I was particularly struck by the following theme — as the white walkers were slowly but surely marching south towards the Wall with their army of the dead, the rulers of the Seven Kingdoms were too consumed by their own petty power games in order to take the threat seriously. They made themselves willfully blind for the sake of greed and expedience. Where am I going with all of this? Well, I can see a similar form of short-sightedness exhibited by the majority of crypto platforms. Sooner or later government regulations will come down full-force. Most exchanges were built without this in mind and are still acting as if it’s not a concern. In fact a . This is going to spell disaster for them in the long run. recent study found out that only 14% of the top 216 global exchanges are licensed A Giant with Feet made of Clay A prime example is Binance, although it seems they have finally gotten the message. In March it was reported that they are . partnering with IdentityMind to “enhance compliance and data security measures” What this means is that they will try to implement proper KYC and AML procedures, which is a big step towards compliance, but they might still be in trouble! See, being compliant isn’t exhausted by implementing KYC and AML procedures. It involves things like your marketing strategies, the types of assets you are listing, the incentive structures you are providing, and more. It also doesn’t just involve how you’re handling things in the present, but also what you’ve done in the past. Binance can still face regulatory trouble on the following two fronts: It’s BNB coin could very well be classified as a security.It had privacy coins such as Zcash and Monero listed. It may prove an to restructure something that has grown so big and was built without a regulatory foresight. Jumping around different jurisdictions can keep away the looming problems only for so long. impossible task What is the Solution? The secure and stable approach is called . compliance-first It consists of building something from the ground-up with regulatory compliance as the first priority. Get permissions, licenses, and court decisions for your features first, and only then proceed implement them. If regulations don’t currently exist, organize lobby groups and work with government to create the rules. It is a long-term strategy and sacrifices some quick profit at the start for securing you position later when regulation kicks in and the rest of the platforms begin to implode. Here is what the founder of taking the long road had to say about the situation: one such platform Both the G7 and FATF, and every other major intergovernmental organization, are now pushing and pushing for more KYC and AML in crypto. The other market players will need to comply at some point. The problem is that while we will already have done it, they will have to go through databases of millions of users and clean them, which will cause major issues internally. Think of the old fable about the hare and the tortoise. This happens all the time in regulated markets. It happens in pharmaceuticals, it happens in finance, it happens in telecommunications. When you lack the vision on the regulatory side, you end up losing. — Kevin Murcko, CEO @ Coinmetro Like the leaders in Game of Thrones, the crypto platforms will have to face the situation eventually, and hope to have not underestimated its seriousness. As the crypto market matures and regulations start kicking in, the old business models, that favored expedience over compliance, won’t be able to continue to exist and new winners are likely to emerge out of the rubble. Valar morghulis!
