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NextGen Magazine

 
 

As Scrutiny Grows, Use of Peer-to-Peer Cryptocurrency Exchanges Grow

By:
Chris Gaetano
Published Date:
Jul 11, 2019
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As regulators increasingly call for controls on the cryptocurrency market, those who want to preserve its wild west feel have increasingly been turning to peer-to-peer networks, which proponents say are not subject to the rules governing more traditional exchanges, according to Bloomberg. For example, one such peer-to-peer exchange, Bisq, has gone from about 31,000 users in 2017 to 6 million today. 

These peer-to-peer networks are different from typical exchanges in that all they provide are a platform for buyers and sellers to connect. They do not have custody of any assets, nor do they maintain order books. Due to these factors, the owners of these exchanges believe they are not subject to the new rules and regulations that have cropped up in recent years, such as know-your-customer. However, Bloomberg noted that even if this impression is wrong, it will be all but impossible to shut them down anyway, as some of them aren't even technically companies but software platforms.  

Other cryprocurrency players, however, are running the opposite direction and seeking legitimacy instead. For instance, the Wall Street Journal recently reported that blockchain startup Blockstack has been cleared by the Securities and Exchange Commission to offer digital tokens through Regulation A+, the first of such offerings to get regulatory blessing.