What Web 3 Entrepreneurs Should Do Amid US Crypto Scrutiny

Web3's founders face unprecedented challenges, especially in light of the recent encryption crackdown in the United States. The $4 billion settlement with Binance and lawsuits against its CEO highlight intense regulatory scrutiny of the cryptocurrency market.

This campaign reflects the need for Web 3 startups to adapt their strategies to effectively navigate the regulatory environment.

Regulation strengthens investor confidence in Web 3

The American regulatory environment has become For cryptocurrencies More and more strict. Regulators emphasize compliance with financial regulations, anti-money laundering (AML) standards and customer protection mechanisms.

“The $4 billion settlement with Binance, as well as the legal action against its CEO, represents an important moment for the global cryptocurrency market,” Maria Fiorentini, co-founder of Mujeres en Derecho, told BeInCrypto.

This increased oversight requires Web3 founders to implement robust cryptocurrency compliance frameworks to align with regulatory expectations. In fact, investor confidence plays an important role in the success of startups.

Directed Regulatory measures against Major players such as Binance, Coinbase and Kraken have shaken investor confidence due to significant risks and uncertainties in the cryptocurrency market. However, in the long term, strict regulations can clean up the sector, thereby boosting investor confidence.

“The impact on investor confidence can be seen from two perspectives... These measures can boost investor confidence by cleaning up the sector or discourage them due to strict regulations,” Fiorentini noted.

Web3 founders must focus on transparency and compliance to reassure investors and attract long-term investments.

Therefore, to navigate the regulatory environment, Web 3 startups must implement strong AML and Know Your Customer (KYC) programs. Includes procedures KYC Effectively verifies customer identities, conducts background checks, and ensures compliance with international sanctions lists.

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Enhanced due diligence is essential for high-risk clients, including those involved in large transactions or operating from high-risk jurisdictions. According to Fiorentini, Web3 founders can mitigate risks by creating these programs and demonstrating their commitment to regulatory compliance.

Comprehensive compliance framework

Fiorentini believes that a comprehensive compliance framework is vital for Web 3 startups. This includes creating a dedicated regulatory compliance team, responsible for understanding, implementing and updating company practices in accordance with applicable laws and regulations.

Regular internal and external audits of compliance programs can help identify weaknesses and ensure compliance with regulatory requirements.

Advanced monitoring and reporting systems are also essential for detecting and preventing suspicious activities. In fact, real-time transaction monitoring techniques can identify large transactions, rapid asset movements, or patterns indicative of money laundering.

It is also important to promptly report any suspicious activity to the appropriate authorities. This includes developing clear processes for identifying, reviewing and submitting suspicious activity reports (SARs), which are essential to maintaining regulatory compliance.

For Web 3 startups operating internationally, meeting regulatory standards across jurisdictions is essential. This includes following the recommendations of the Financial Action Task Force (FATF) and other international guidelines. By ensuring global compliance, Web3 company founders can mitigate the risks associated with cross-border operations and build a strong foundation for sustainable growth.

“There are more requirements depending on the country you work in sotck exchange. These are just general things to do. I would recommend having a strong legal team that really understands how cryptocurrencies work and thoroughly investigates their regulation based on each country,” Fiorentini told BeInCrypto.

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Collaborative efforts with regulatory agencies can significantly improve the compliance capabilities of Web 3 startups. Global cooperation between regulatory and enforcement agencies is essential to combat cross-border fraud and track down perpetrators.

Encourage the development of industry standards and best practices in transparency, security and...Customer protection Promote a safer and more reliable digital currency market.

Focus on education and web awareness 3

Education and awareness campaigns are essential to protect investors and maintain market integrity. These campaigns should educate investors about the risks of investing in cryptocurrencies, how to spot scams, and the importance of due diligence.

Establishing easy-to-use reporting mechanisms for suspected scams and fraud can ensure prompt action and protect investors' interests.

“Educational campaigns and reporting mechanisms are essential...Investors need to understand the risks and how to address them.”

The regulatory environment for cryptocurrencies is evolving, with a trend towards greater clarity, stricter compliance, stronger consumer protection and international harmonization. Although difficult for certain market players, these regulatory adjustments are necessary for its sustainability and legitimacy. Cryptocurrency industry Long-term.

“While the details and pace of these changes vary by jurisdiction, the general trend points to a mature market that is increasingly integrated into the global financial system,” Fiorentini concluded.

In conclusion, Web3 founders must adopt comprehensive strategies to effectively navigate the US crypto campaign. By implementing strong compliance frameworks, building investor confidence, and ensuring international compliance, Web3 startups can thrive and contribute to the maturation of the global cryptocurrency market.