eBook

The State of Crypto Regulations & Compliance

In this eBook, you will learn about regulatory challenges facing crypto, the types of international regulatory models that might be mirrored in the US, and what you can do today for your crypto compliance program.

Cryptocurrency is the newest frontier in commerce today. And the treatment of cryptocurrencies from a regulatory and legal standpoint is incredibly complex due to their mostly decentralized, self-governing, and highly volatile nature. The crypto-asset market is maturing fast, with more involvement from both investors and service providers over the last year. There is more willingness from banks and other financial institutions to undertake activities in – and gain exposure to – cryptocurrencies, which is a sign of evolution for these otherwise risk-averse institutions.

That being said, the Summer of 2022 has proven to be difficult for the crypto market, leading to what economists call the “crypto winter”¹. The prices have plummeted and continue to stay low for the moment, amid a wider economic slump. Meanwhile, the regulations are tightening. The challenge is that there is no global consistency in government standards with regard to the treatment of cryptocurrencies. And whatever standards there are, they only apply to the jurisdiction that licenses them, creating siloed legal guidelines. This often means that transacting in different cryptocurrency markets brings complex legal and compliance hazards.

In the US, crypto companies have to deal with both federal and state regulators who often have their own interpretations of crypto; virtual currency is explicitly included in the definition of a money transmitter in some states, but not in others. In the meantime, while Congress takes its time defining clear rules, the industry is left guessing. The caveat is, however, that just because international consensus is lacking on how to regulate cryptocurrencies, it does not mean that crypto-related activities will not get fined or penalized for misconduct. In fact, recent enforcement actions amount to tens of millions of dollars in disgorgement and civil penalties.

This is why it’s important to have clarity and understanding of the key challenges for crypto-handling organizations, and the preparatory measures that can be implemented today in anticipation of the regulations to come. In this eBook, you will learn what those challenges are, the types of international regulatory models that might be mirrored in the US, and what you can do today for your crypto compliance program.