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Crypto Regulation in 2024

Crypto Regulation in 2024

Cryptocurrencies and regulation: Expectations for 2024. Regulation is one of the issues for the cryptocurrency market. The massification of these digital assets depends on it.

Regulation is a big issue in the cryptocurrency world and all the expectations we place on it. If the plans turn out as expected, the bull market will attract the attention of millions of people around the world. In that troubled river, there will be no shortage of frauds and other crimes, which will draw the attention of government regulatory agencies. The need for clear rules seems to be the next step in an industry rapidly moving towards massification. But the key to this whole issue lies within the United States.

It is worth mentioning that in other developed markets, such as the European Union, the Digital Assets Act, or MiCA, will come into force. All indications are that the more orthodox decentralization enthusiasts will not have a dream year. On the positive side, the various regulatory frameworks will allow companies to have rules and a clear path for growth. The doubt lies in the so-called decentralized finance (DeFi). 2024 will be a year of advances in legalizing these digital assets.

What to expect in the field of cryptocurrency regulation?

Within the framework comprising cryptocurrencies and regulation, there are numerous expectations for implementation. However, two fields will be the epicenter of the agencies: anti-money laundering and anti-terrorist financing. If these two items are successfully locked down, regulations will have already done much of the work, and there will be little to worry about. In that case, the conduct of companies and the supervision of token sales would be two perfectly tractable issues. However, the big question mark points to the SEC’s issue about the nature of tokens. According to the U.S. agency, the vast majority of tokens are securities. However, the owners of crypto projects do not think so.

How would authorities treat these assets? Securities, commodities, or a new class to be defined. Asset classification will be addressed in 2024, although it will certainly not be solved this year. As already mentioned, the massification of digital currencies and the possible bull run will highlight the urgency of the regulatory issue. It should not be lost sight that regulators in different jurisdictions have the crypto sector in their sights after the events of 2022. Back then, two events resulted in users losing billions of dollars: The Terra crash and the FTX fraud. From there, many regulators raised some red flags that were not entirely clear to the public. Will they be known in 2024?

United States

The United States is the strong point of expectation in this game of regulation and cryptocurrencies. It is the largest market in the world and the leading source of retail and institutional investors that may exist internationally. Any project that wants to succeed must have the regulator’s approval in that country. The problem is that those regulators do not have the slightest sympathy for the crypto sector. There are several publications about SEC and CFTC lawsuits against crypto firms. All in all, the lawsuits by these agencies against ventures in this particular technology area add up to more than 200 cases.

The motivation of the agencies is to fight against illegal activities. However, in the crypto world, there are also good actors mercilessly crushed by lawsuits. Generally, industry exponents criticize regulatory authorities for sabotaging technological entrepreneurship. The latter could have negative consequences, leaving the U.S. lagging in this race against other rival powers. The SEC’s vision is that cryptocurrencies must adapt to the regulation established about a century ago. This year is unlikely to see the birth of a clear body of law in the world’s leading economy.

Gary Gensler. Chairman of the SEC.
Gary Gensler. Chairman of the SEC.

European Union and the United Kingdom

Two other sectors of great importance focus on Europe: the E.U. and the United Kingdom. MiCa regulation will come into force in the former, as noted above. Mica is one of the most advanced regulations in the world, and about which there are great expectations. If the uncertainty continues in the United States, numerous U.S. firms will likely move to the old continent. It is still too early to know what the practical effects of this regulation will be among crypto companies. However, it is far better to have flawed regulation than none, or so common sense dictates.

In the British Isles, there is also an initiative not to treat the crypto sector with its feet regarding making it enter the regulatory lane. Thus, since 2020, London has been looking to undertake numerous maneuvers to protect crypto companies. As time goes by, they seem to be close to a formula that maintains the balance between the security of the financial world and the stability of these technological ventures. With the Financial Conduct Authority FCA’s new adjustments, the U.K. aspires to become a global epicenter of the crypto world. Whether or not it will achieve this by 2024 depends on meeting the expectations between regulation and cryptocurrencies that its government has generated.

Asia and the Pacific Regions

Another area that is impossible to ignore is Asia-Pacific. Regulatory developments in the area are enormous, with advanced cases such as Singapore and Hong Kong. South Korea and Japan also stand out in this geographical region. Despite the cautious attitude of the latter two, the struggle to become the technological hub will become more acute in 2024. The latter requires consolidation of laws that regulate the world of cryptocurrencies. Expectations in the region are high, with China totally out of the equation, at least for now.

With all this, you can take for granted that 2024 will be a year of big news in the regulation world. On the other hand, it is worth noting that the rest of the countries could take these first experiences to tackle the complicated issue of cryptocurrencies.

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