With more regulators circling the crypto-industry, learn how you can develop long-lasting relationships with them to minimise disruptions.
This raises a lot of issues for crypto-businesses, especially if business owners haven’t dealt with regulators before, or if they are based in different countries to the company’s residence.
With this in mind, it’s essential that you know what is required to ensure your business stays in their good books for the foreseeable future.
Communication is key
(Photo by Aymanjed, CC0 / Pixabay.com)
Instead of seeing a regulator as a burden, you should use this as a means of advancing or benefitting your business’ interests.
Although a lot of regulators will understand your business model, this isn’t always the case. If your business has a complex level of intricacy, it’s vital that you articulate what you do and why you do it clearly and precisely.
Or if you really want to show the regulator a deeper level of care and attention to detail, try explaining how your business model is delivered in line with applicable regulation and policies. Failure to effectively explain what your business does to a regulator could mean your company is misinterpreted.
For instance, are you able to show the regulator how your business is customer-centric? Or can you tell them what you are going to do and why are you going to do it this way?
If you can successfully articulate the unpredictable process-orientated interactions and describe the ins and outs of your framework, you will start to build trust with the regulator.
Be clear and transparent while sharing your data and answering questions to ensure they’re not just nodding their head to hurry the conversation along or misunderstanding you altogether. Listen to what the regulator wants, use clear language (with no jargon) and remember to answer the question.
Completing an industry consultation is the perfect opportunity to put across a well-constructed argument about a point. However, it’s essential that you respond in the right way. If you come across rude and give off the impression that the regulator is just doing their job for the sake of it, this could make them take a disliking to your business or raise a few unwanted questions.
At the end of the day, regulators are hard-working individuals who live a life outside of work as well. That’s why it’s important to get to know your case officer on a personal level.
Try to find a common interest or ask him/her about their education, hobbies or general opinions. This will enable you to communicate with him/her more effectively.
It’s also worth noting that many officers liaise with other ones, so be careful what you say.
Things to consider going forward
- Don’t accuse a regulator of not knowing what they are doing. Most of the time, their decision is final and bad mouthing them will only damage your reputation further.
- Respond to any requests very quickly — this includes answering phone calls.
- Give the regulator clear financial information which they can’t challenge or get confused by.
- If you make a mistake, admit it and tell the regulator how/why it won’t happen again. Always keep in mind that there’s a (big) difference between an error/infringement discovered by the regulator and one immediately disclosed to the authority.
- Use clear language without any jargon.
- Before making any drastic changes in your business, try seeing what the regulator would make of it. One question can save you a lot of issues down the line.
- If a regulatory issue occurs, jump on it quickly.
- As regulators might not be experts in your field, they encourage you to give respectful feedback on their decision.
(Photo by rawpixel, CC0 / Pixabay.com)
The key to building a positive relationship with a regulator is ultimately communication. Get to know your regulator and always try to remain transparent throughout the process. If you give them a reason to doubt your business from the outset, you’ll essentially face an uphill battle.
Offering the regulator a clear narrative on what you do and how you plan to carry out these points within the boundaries of current regulations and policies will give you the springboard to success.