Cryptocurrency regulation has been slow to catch up to the speed of innovation in the industry. As a result, there are still significant gaps in investor and consumer protection. Recent market volatility and scandals (such as the 2022 collapse of crypto trading firm FTX) highlight the need for clearer rules to ensure the integrity of the sector.
A lack of clear crypto-specific laws forces businesses to interpret existing financial regulations in a variety of ways, leading to uncertainty and misinterpretation. This has made it difficult to crack down on bad actors and ensure that consumers are protected.
In the US, the GENIUS Act and other legislation are a step toward clearer rules for stablecoins and digital assets. The CFTC has been designated the lead regulator for the space, and the SEC has a role to play as well. The Treasury Department has also taken an active role in promoting crypto innovation and identifying regulatory gaps.
In addition to efforts by federal agencies, individual countries have been taking their own approaches to crypto regulation. Some have banned the product, while others are embracing it. In the UK, for example, the Chancellor has published draft legislation that would bring crypto firms into the regulatory perimeter and require them to meet clear standards on transparency, operational resilience, consumer protection, and anti-money laundering compliance. This will help protect millions of UK consumers from risky firms and scams. Other governments, such as Australia and New Zealand, have issued guidance clarifying which crypto activities are subject to existing rules.
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