A growing coordinated attack against bitcoin (BTC) and the wider cryptocurrency industry has recently intensified, with U.S. Senator Elizabeth Warren (D-Mass.) expressing hostility towards digital assets.
Key stakeholders in the industry, however, have been inadvertently providing ammunition to detractors by engaging in activities that raise ethical and legal concerns.
Crypto growing pains
One example is the recent controversy involving Arbitrum, a popular layer two scaling solution for ethereum (ETH). The project has faced criticism for allocating funds before securing proper community approval through a vote.
This incident has sparked a wider conversation about transparency and governance within the blockchain ecosystem, particularly when it comes to layer two networks such as Arbitrum and Optimism.
Experts participating in a recent livestream hosted by finance YouTuber Ivan on Tech stressed the need for robust governance structures to prevent corruption and ensure that these networks do not run afoul of regulatory requirements.
They specifically highlighted the risk of layer two networks being classified as money transmitters, which would entail stringent regulatory compliance obligations.
The speakers emphasized the importance of not cutting corners and adhering to regulatory requirements to safeguard not only individual projects but the entire industry. They argued that transparent governance and compliance with regulations are key to fostering trust and driving mass adoption of cryptocurrencies.
In addition to discussing governance and regulatory challenges, the livestream speakers also highlighted the usefulness of some resources for researching and tracking coins. They warned investors of the risks associated with trading and shorting low-scoring crypto projects, advising them to exercise caution and diligence when making investment decisions.
Collaboration and team building were underscored as vital elements for achieving mass adoption of cryptocurrency. The speakers urged industry participants to work together in addressing the challenges and overcoming the hurdles that lie ahead.
As the cryptocurrency industry continues to mature, the importance of transparency, proper governance, and regulatory compliance will only grow. By adopting best practices and fostering a culture of cooperation, the industry can build a strong foundation for sustainable growth and widespread adoption.