Regulation
More than 20 countries have cracked down on crypto in 2023 – and more laws are coming – DL News
- A new report from TRM Labs indicates that 80% of surveyed jurisdictions have increased crypto regulations in 2023.
- International trendsetters have played a “critical” role in setting global regulatory standards for crypto.
- The Financial Action Task Force is one of the most important bodies for cryptocurrency watchers to follow this year.
The Financial Action Task Force is poised for a global regulatory crackdown as authorities increasingly deliver on pledges to tame the “crypto Savage West”, according to a new report.
As many as 17 jurisdictions, which cover the majority of global crypto exposure, have tightened their regulations in 2023, according to the new report from TRM Labs, the blockchain intelligence firm.
“Over the past year, we have seen all major standards bodies devote their attention to crypto standards,” said Angela Ang, senior policy advisor at TRM Labs. DL News. “We have also seen national regulators refer to these standards. »
The report comes at a pivotal time for the crypto ecosystem, which is awaiting the green light from US regulations for asset managers to offer Bitcoin Spot exchange-traded funds.
Analysts say approval is essential for the young industry to be accepted by traditional financial institutions.
If crypto is really going to go mainstream, there needs to be a clear regulatory path, experts say.
Setting global standards
According to Ang, the FATF will be one of the most important international bodies shaping regulatory policy around crypto in 2024.
As part of its efforts, the FATF classifies countries with sketchy money laundering policies on “grey lists” and urges policymakers and businesses to exercise caution when doing business in these countries.
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“This year we will see countries on the gray list working on rules for virtual assets to get off the list,” she said.
In 2023, the FATF found that only a quarter of its 39 members were fully compliant with its anti-money laundering and anti-terrorism financing measures for virtual assets.
Other international organizations – such as the G20, the world’s 20 largest economies – have also contributed to the adoption of rules governing crypto.
The G20 monitoring bodies in the Financial Stability Board have promised to review the extent to which their policy recommendations have been implemented by the end of 2025.
The International Organization of Securities Commissions also issued recommendations for DeFi, prompting backlash Of the industry.
The idea is that these international bodies can help harmonize an otherwise fragmented policy landscape. Vast differences between jurisdictions would make it difficult and expensive for crypto companies to comply with all the different regimes.
“The reality is that national priorities will always be somewhat different,” Ang said. “I think we will find ourselves in a situation similar to traditional finance, where the approaches are aligned but the implementation will vary. »
Countries push for regulation
Jurisdictions have had a significant year in advancing their crypto regimes.
Last year, the European Union approved the Crypto-Asset Markets law. Before MiCA goes live by the end of the year, member states like France and Germany have updated their own rules.
The United Kingdom has introduced a fire hose new laws, and is preparing another comprehensive framework that optimists hope can be completed this year.
Its Financial Conduct Authority and the Bank of England have launched its new Digital Titles Sandbox to boost the blockchain development of financial companies on January 8.
In the United States, regulators have taken tough measures barrage of lawsuits against cryptocurrency companies dealing in purported unregistered securities.
The Government Treasury Department propose new regulations to target sanctioned crypto mixers and illicit actors.
Hong Kong introduced a new regime for virtual asset service providers and Singapore finalized its legal framework while implementing consumer protection rules.
As a result, perhaps unsurprisingly, “countries with comprehensive licensing and oversight regimes have lower rates of illicit activity than less regulated jurisdictions,” according to TRM Labs.
Inbar Preiss is a regulation correspondent based in Brussels. Contact her at inbar@dlnews.com.