The situation with cryptocurrency regulation around the world remains tense. The following map from Elliptic’s staff on what’s happening in 2023 can be studied for clarity. White indicates countries awaiting regulation, red indicates prevailing prohibition, orange indicates restrictions on the use of digital assets, and green indicates no problems with crypto-assets.

Changpen Zhao, head of cryptocurrency exchange Binance, previously commented on the topic of good governance in the digital asset industry. He believes that having regulations for the coin industry is far better than not having them. Zhao, however, disapproves of so-called compulsory regulation, which involves punishing companies for their actions in the past.

This has been a particular sin of US regulators, who are reluctant to create an adequate framework for regulating digital assets and instead use the Securities Act of 1933. Obviously, this approach is doomed to fail – after all, not only cryptocurrencies did not exist back then, but the internet as a whole with such advanced technologies did not exist.

Fortunately, the failure of this idea is gradually being recognised globally, which means that there is still a chance of fixing the situation.

What will happen to regulation of cryptocurrencies

Crypto regulation needs global coordination to avoid ambiguity, regulatory overreach and inconsistent enforcement. The paper’s authors have identified a number of problems in cryptocurrency regulation. Here is their quote on the subject, cited by Cointelegraph.

Digital assets and their ecosystem do not always fit into the existing regulatory approach, which is based on traditional business activities and focused on intermediaries. And this is true even if the crypto industry mirrors that of the traditional financial sector.

That is, experts recognise that trying to manage the cryptocurrency industry with already established regulations and laws will not be effective. This observation is primarily relevant to US regulators like the US Securities and Exchange Commission, whose leadership still sees crypto as securities and regulates the industry under a law from 1933.

More uncertainty about regulation comes from the existence of a large number of decentralised platforms, cryptomixers and similar services. They have no close alternatives among traditional financial intermediaries, which makes it difficult to apply the usual regulatory rules to them.

However, this didn’t stop the US government from placing one of the most popular cryptocurrency mixers, Tornado Cash, on its sanctions list. Following the event, a lawsuit was filed against the US Treasury Department by former customers of the cryptomixer. The day before, they had filed new motions with the court, citing evidence of wrongdoing by the agency.

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The WEF guide provides many classifications of the regulatory framework for regulating digital assets. For example, it looks at outcomes-based regulation and risk-based regulation. Separately, it highlights strict sanctions-based regulation, which is used in the US. And the paper’s authors do not endorse this approach.

The key to regulators’ success, they say, is ongoing cooperation with important players in the crypto industry. Here’s a relevant quote to that effect.

Regulators and players in the crypto industry need to collaborate and share lessons learned across countries to ensure consistency and clarity across processes.

Something similar is already on the way in the European Union, where the European Parliament previously passed the MiCA bill to regulate cryptocurrencies. It would create a single set of rules to control digital assets across the EU. In theory, it would eliminate regulatory uncertainty and accelerate the growth of local cryptostartups along with raising capital.

In mid-May, members of the European Union's Economic and Financial Affairs Council (EcoFin) approved MiCA's cryptocurrency regulation bill, and did so unanimously. With this in mind, the bill will become a full-fledged law in the summer of 2023 and will come into force.


We believe these recommendations from representatives of the World Economic Forum are generally sound. Experts believe that regulating the cryptocurrency industry with harsh sanctions will not lead to positive results for local jurisdictions. Accordingly, global regulators could still change their approach to the topic, taking into account global pressure - at least such an outcome would be logical.


Look for even more interesting things in our crypto-chat of ex-wealthy people. There’s waiting for the arrival of the new bullrun, which could happen as early as next year.

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