80% of Major Jurisdictions Tighten Crypto Regulations in 2023
Around 80% of 21 major jurisdictions, representing approximately 70% of global crypto exposure, have strengthened their regulations within the crypto space in 2023, according to data compiled by TRM Labs.
Increased Measures for Consumer Protection
In a recent research report, TRM Labs revealed that nearly 80% of jurisdictions worldwide have implemented measures to tighten regulations in the crypto industry. Notably, almost half of these jurisdictions have focused on initiatives aimed at enhancing consumer protection.
Regulation and Illicit Activity
TRM Labs’ analysts found that crypto exchanges operating in countries with established licensing and supervision frameworks demonstrate lower rates of illicit activity compared to those in less regulated jurisdictions. Different nations prioritize various national goals when it comes to implementing regulations.
Pivotal Rulings Expected in the US
Despite the absence of a comprehensive regulatory framework for cryptocurrencies in the United States, TRM Labs anticipates significant rulings from federal courts in 2024 regarding the classification of specific crypto assets as securities. These rulings will have far-reaching implications for the industry.
“We can also expect the enforcement momentum to continue, especially against mixers and other anonymity enhancing tools.” – TRM Labs
Uncertainties and Challenges in Decentralized Finance
The decentralized finance (DeFi) space presents uncertainties and challenges when it comes to responsibility, accountability, oversight, and authority exercised by regulators. While definitive answers may not emerge in 2024, TRM Labs believes this year will be a crucial period for implementation and establishing benchmarks in the next chapter of digital assets.
The Uncertain Position of American Regulators
American regulators’ stance on crypto remains uncertain, as existing financial laws were previously deemed applicable to digital assets. The US Securities and Exchange Commission (SEC) recently denied Coinbase’s Rulemaking Petition, asserting that current laws already cover crypto securities markets. However, Coinbase plans to appeal and challenge the SEC’s authority in determining crypto regulation standards.
Hot Take: Crypto Regulations Evolve Globally
Regulatory measures for cryptocurrencies continue to evolve globally, with 80% of major jurisdictions strengthening their regulations in 2023. Enhanced consumer protection initiatives and the focus on licensing and supervision frameworks have contributed to lower rates of illicit activity in regulated jurisdictions. While uncertainties persist in decentralized finance, 2024 is expected to be a year of implementation and benchmark setting for digital assets. The position of American regulators remains unclear, but pivotal rulings on the classification of crypto assets are anticipated. The industry awaits further developments as it navigates the regulatory landscape.
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