IdentifyMind, a Californian regtech company that serves cryptocurrency exchanges among other clients, believes that these platforms will witness explosive growth in the coming months, the company said on Tuesday.
According to Neal Reiter, director of the ICO and virtual currency business unit of IdentityMind, there’s tremendous growth in cryptocurrency exchanges but most people just aren’t seeing it. He expects continued momentum for the months ahead.
“In 2013, when the price of one bitcoin went from US$150 to US$1,200, we saw the formation of hundreds of exchanges in the US and Japan,” Reiter said. “However, this year while bitcoin’s price has fluctuated from US$17,000 to US$6,000, and while we again saw a large number of exchanges, this time they were in Latin and South America, South Asia and Africa.”
While smaller players are having difficulties entering larger and established markets, larger players are giving it a go, hoping to find efficiencies due to their size and ability to subsidize losses in the meantime.
Examples include Japan’s cryptocurrency exchange BitFlyer, which launched in the US in November 2017 and Europe earlier this year, and China’s Huobi, which opened registration for its new US-based platform HBUS just last week. Huobi also operates an Australian platform and recently opened an office in London ahead of a European launch.
As we move into the second half of 2018, IdentityMind anticipates that large companies such as Huobi will continue to expand as they compete against one another to become worldwide exchanges. It also predicts the shaking out and establishment of companies that will take leadership positions in countries without established leaders such as India, Indonesia, and Nigeria.
Reiter expects the US Securities and Exchange Commission (SEC) to continue to shut-down fraudulent ICOs but also begin to target ICOs that claim to be selling utility tokens that are in fact security tokens.
IdentityMind shared its mid-2018 insights and predictions on ICOs and cryptocurrencies after having assisted more than 165 clients conduct ICO or security token offering, the company claims.
The insights are based on conversations and consultations with over 650 global companies conducting ICOs in 2018, from large utility tokens with over 25,000 contributors requiring know your customer (KYC) to small security tokens with 10 contributors needing KYC and accredited investor verification. IdentityMind has also spoken with over 65 companies launching a digital currency exchange in 2018.
IdentityMind provides a software as a service platform that builds, maintains and analyzes digital identities, allowing businesses to perform identity proofing, risk-based authentication, regulatory identification, and to detect and prevent identity fraud. It claims to be working with more than 25 cryptocurrency exchanges.