The Swiss Federal Assembly, which handles government legislation, approved on March 20th a motion directing the Federal Council to regulate cryptocurrencies.
Liberal Assemblyman Giovanni Merlini will instruct the Federal Council on adapting existing legislation to include and accommodate cryptocurrency and associated risks. The Council approved the motion with 99 to 83 votes in favor and 10 abstentions.
Why Regulate Cryptocurrency?
The motion is the first step in tackling issues like money laundering, extortion, and criminal fraud. While these are all major issues in government-backed fiat currencies like the Swiss Franc, fiat currency has strict regulations in place allowing the government to prosecute criminals and regulate market activity and unfair practices like price manipulation.
In cryptocurrency there is often no such regulation, allowing major asset holders (“whales”) to apply what are, in the stock market, illegal price manipulation tactics without any legal repercussions. Much of the volatility in the price of bitcoin in recent years has been attributed to deliberate manipulation.
US Justice Department Probes Tether for Bitcoin Price Manipulation: Report https://t.co/NSYQuIkIhf
— CCN.com (@CCNMarkets) November 20, 2018
While whales manipulate prices by suddenly placing massive buy or sell orders to create market panic, cryptocurrency scams are often difficult to prosecute as well on the basis that cryptocurrency is often not recognized as legal tender.