Upcoming global crypto regulations from G20 and FATF

What’s everyone thinking about the upcoming regulations that might cause a crypto crash? Micheal Burry, you know the guy Christian Bale played in The Big Short, has been sounding the alarm. He called the housing crisis, bet against Elon Musk, and got involved with the GameStop saga. Now he’s tweeting about a potential massive crash in crypto due to government actions. I think he’s talking about how the G20 countries have tasked FATF with creating global regulations for cryptocurrencies this October. Here’s a reddit post on the topic and the paper linked there.

A lot of the comments I read from multiple sources mention that privacy coins will be impacted the hardest by this crackdown but I do not agree.  To be honest, the best response is everyone moving right now to transaction history obfuscating methods like Wasabi's CoinJoin or just move to Monero instead.  If nobody publicly wants to be against their new regulations, this is the best way to counter it.  Hide your tracks. I am going to respond this way as well.  All my assets are anonymized or have an obfuscated history and it does not matter how many regulations they come up with, we can all still own and use cryptocurrencies.  Unfortunately, we are very close to the moment where only transparency is legal while privacy becomes a suspicion of crime. This, however will trigger the buildup of a very strong moment for privacy coins once people truly start caring about their financial privacy.  Hopefully this will also trigger some interest of Bitcoin developers for privacy and make Bitcoin at least a bit more fungible and private than it is.  So far, not enough of us seem to care. - Regards, PrivacyG

1. Michael Burry recently predicted that a very big crash is coming in the stock market too which means not only crypto is going to suffer but the global Markets as a whole would suffer. 2. Most of the people really don't consider Michael Burry an intelligent market forecaster, infact most of the people consider his 2008 prediction as a mere guess or chance. Because most consider that he build his thesis of crash only after the crash. 3. Talking about global regulations, I don't think countries would take such a big decision on a global forum, today millions of retail investors have put their money into Cryptos, if it goes down due to such news all the countries would consider these leaders as culprits and they could face serious political backslash in their countries. There might be a lot of discussion but I doubt there would be any hard pact on it.

One thing for sure and that is crypto forecasts are merely predictions and the crypto market has always been unpredictable. If there are governments that are planning to take action and give some negative signal to cryptocurrencies. Why people are always looking that negative side. Look at those countries that shows good news like the most recent about El Salvador and probably next is Paraguay, they got something for the world about bitcoin.

It could be a reason for a crash when regulations are going o crackdown and ask companies for KYC which among the VASP like exchanges and cold storage wallets. Regularization is actually a crackdown for KYC and when this is ongoing, people will sell. If we have to look at it with a lens, wallets like Coinomi or Trust wallet will be forced to ask KYC to their users.

I don't think that the price will going to crash just because of a new regulations. We have seen FATF rules and guidelines last year and so far it didn't put a dent on the market. It's more of the participants like exchanges and VASP that are going to adjust. As far as KYC goes, majority of crypto exchanges are now requiring it so I don't know what more could the FATF would ask from us.

The main job of FATF to ensure no dirty money is flowing in the economy and also to ensure transparency within the traditional financial economy. So it's no wonder that they will advise the countries against privacy coins. Privacy coins are indeed a big threat for the security of any country. It makes money laundering and terrorism financing much easier for the miscreants. But I don't think FATF will come down heavily on all type of cryptos because majority of the cryptocurrencies are actually much transparent than the existing system. But if they generalise all cryptos as a threat, then there will be a serious impact on the crypto market.

Having recently talked with members of FATF and OECD on policy issues my understanding is that they will be looking to set up a baseline KYC procedure for bringing digital assets into the traditional regulatory/finance world. The most common framework i've see so far would use some sort of gatekeeping wallet where deposits will need to sit in a "deposit wallet" first where the receiver can then risk score the assets with KYT info (blockchain analytic firms) before accepting it into their wallet. Privacy coin deposits wont be banned but they would subject the depositor to non-blockchain based source of funds analysis.

The upcoming cryptocurrency regulation can be viewed in two dimensions. 1. It can bring about general acceptability of cryptocurrency. This will enable those who are scared to be into cryptocurrency have a trust in it. 2. It can also bring about many big investors who use Bitcoin as a means of moving funds from across the world with little transaction fees and fast delivery of funds drop it because of government intervention in the movement of funds across borders, and that can lead to crash in the prices of cryptocurrencies.

Are the decisions of G20 binding on all countries? Countries benefit from these decisions because they mean that many investments will go to that country rather than staying in the same country. International regulations will not succeed unless countries unite on unified taxes or a collective ban on cryptocurrency, something that will not happen soon because many countries have many economic consequences and will try to make profits from anything, even if they put 40% as taxes. It will only encourage the movement of Bitcoin to other countries just as it happened with the ban of China.

G20 is big organization the member itself from europe usa and asia so when crypto is the topic its gonna be huge, but if they talking about banning its gonna be very bad

The seriousness and bindingness of the decisions taken by the FATF can be judged even by the FATF decision of June 21, 2019 that all transactions over one thousand euros must be identified in order to prevent money laundering and combat the financing of terrorism. My country, which has not even legalized cryptocurrency yet, adopted a law at the national level within a year that duplicated these FATF recommendations. Any state that does not implement such recommendations within a year in its domestic legislation will further be limited in access to the global financial system and suffer large material losses. It is also an answer to the question whether the G20 decision is binding on all states. The decision is not obligatory, but it is better to make it, otherwise there will be big financial troubles in the future. Therefore, I take the new FATF recommendations from October this year very seriously and the new rules for cryptocurrency as well. However, we will judge them when they are adopted. The good news is that a strict ban on cryptocurrency is not yet foreseen.