Oct 10, 2019 08:03 UTC
Oct 10, 2019 at 08:06 UTC
Despite the cryptocurrency industry rocketing into the limelight in the years following the launch of Bitcoin, there remains very little overlap between the developing crypto industry and the brand-rich landscape of most other industries.
You would be forgiven for thinking this is due to the size of the industry—quite the contrary, brands tend to have a reputation for seizing opportunity in developing markets and niches and getting an early foothold.
Instead, the problem can likely be owed to the thin regulatory net on the industry, which can make it a dangerous place for those not in the know.
The Problem of Lack of Regulation
The push for a robust set of regulations for the cryptocurrency industry has long been a popular talking point for evangelists in the space. After all, with regulation comes safety and with safety comes the investment needs to grow the industry.
Unfortunately, few countries have stepped forward to take the initiative in laying down a clear regulatory framework for crypto companies, which has had its consequences when considering how the industry has developed.
Because of this, the industry is still often referred to as the wild west, since it is often extremely difficult to know who can be trusted, which sources are legitimate, and which set of rules or regulations an outfit must adhere to.
This has also led many companies working in the space to take what can only be described as a survival-centric approach to operations—doing whatever they can do to protect themselves against the uncertainties of the niche.
This can include setting up shop in so-called crypto-friendly countries, such as Antigua and Barbuda and Malta. For the most part, these countries offer favorable conditions to these businesses, have relaxed tax requirements and do little to curb the sometimes shady business practices of those seeking a crypto safe haven.
This also means that when these companies fall foul of the law, or begin participating in shady business practices, that very little can be done to bring them into line. This essentially means that bad actors, outright scams and suspect businesses are often able to continue operating without fear of a legal crackdown.
While this path of least resistance tactic does ensure that more crypto businesses stay operational, it fails to address arguably one the industry’s major hold-ups—crime and corruption.
One of the easiest ways to visualize the problems caused by lack of regulation, is by examining the effects of the false PR which has become so prominent in the cryptocurrency space today. Where such press would likely lead to the news outlet being shuttered and sued in practically any other industry, not so is the case in the cryptocurrency space due the championing of privacy in every facet.
Negative coverage on high authority websites can be particularly damaging to a company’s reputation since the reader almost invariably believes that the journalist behind the piece has already fact-checked before publishing. However, this is sadly not always the case in the cryptocurrency space, since paid PR often trumps the impartiality and accuracy claimed by many news outlets in their editorial policy.
This essentially gives anybody with enough gusto and financial backing the means to launch an attack against anybody, or anything without fear of legal recourse. By providing these unscrupulous individuals with an outlet to spout lies, misinformation, and propaganda, these publications are providing extortionists and deviants with the sword needed to attack and defame anybody without fear of consequences.
This inevitably means that companies with brands that have a strong focus on brand awareness and equity, as well as consumer trust will be hesitant to enter an industry where these can be easily damaged by just about anyone with a vendetta.
Even my own company, Karatbars International GmbH has been a victim of such attacks, with an unknown assailant posting lie-ridden articles, outright fabrications and other materials designed to damage the flawless reputation we have been building for close to a decade.
In a recent article published on CoinDesk, for example, a journalist made various claims that we are able to prove false. Additionally, the author of the said article even stated that Karatbars did not reply to CoinDesk’s requests for comment, although we have no records of any commenting request from CoinDesk during the past weeks or even months.
Who was behind these attacks? We simply do not know, since these news outlets not only act as the sword but also the shield to their benefactors. Fortunately, as an internationally acclaimed crypto organization with years of experience in this space, we know how to defend ourselves against such attacks.
However, other companies or brands less experienced in the space might not be so lucky and could have their public image irreparably damaged by such attacks. This, understandably, can be a major sticking point for major brands looking to invest in, or work in the industry, since doing so can bring with it vulnerable.
A Call for Favorable Regulation
Let’s face it, the aforementioned can be attributed to the cryptocurrency industry still being in its relatively nascent stages. With the first cryptocurrency launched towards the end of 2008, the industry has had scarcely more than a decade to develop.
Despite its infancy, the industry has already become remarkably well developed, with much of the core and surrounding infrastructure being well fleshed out, making it ripe for innovation, investment and further development.
However, the gross lack of regulation has also seen the industry pillaged by scams, false promises and failures that have burned the hands of many, while giving pause to companies and brands that recognize the potential of this burgeoning industry.
As many people are well aware, large companies, corporations and brands have a major influence on how regulations are formed. Without the involvement of these entities, it is unlikely the industry will be looked upon favorably by regulators, despite its immense promise.
In light of this, it is clear that by making the industry more hospitable to brands of all sizes, e.g. by providing them a way to protect their intellectual property and brand image, we can ensure the industry develops towards a more favorable future for everyone involved.