After much hype on the World Wide Web and in the developed and developing economies alike, the honeymoon for the virtual currency or Bitcoin as it is generally referred to have reached its conclusion; if one can say or conclude that. On the back of the fact that the regulators worldwide were skeptical about the whole concept and were still firming up their calculated response, the trading of the few entities in the developed economies like that of United States did come under the regulatory Radar; not the federal reserve, by the New York state authority department of financial services looking into the practices of these companies; there level of transparency and above all the extent of objective analysis ; they were undertaking to guide their prospective client.
Here it is pertinent to note that investments in company shares, pension funds and now bitcoin or virtual currency are squarely guided by the level of astute analysis the company is able to undertake to convince the prospective investor to undertake a chance. The regulatory probe by the NY regulators revealed that there were a number of shortcomings visible in the way these companies were operating in a completely new domain of business. While the organizational shortcomings from a sample survey of 14 companies were glaringly evident, the most alarming aspect was lack of costumer protection.
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The weak customer protection aspect can potentially become an Achilles heel for the bitcoin or crypto currency business and trading despite its all. The overlapping of interests on part of these companies has alarmed the regulatory authorities about what they feel bad business practices.
The crypto currency trade in the state is further plagued by other developments too. Two Wall Street regulators have levied fines of such companies. Further the ruling of one federal judge also open the gate for taking up any dispute cases emanating from the crypto currency dealers as Fraud cases.
While the bitcoin and crypto currency investments might have sounded flashy for many around the globe; the lack of transparency, expertise and the lack of defined regulatory red lines have created enough ground for the regulators around the world in general and the regulators in developed economies in particular to view the exercise with deep skepticism.
