Overview of global national or regional legislation and supervision of Web3 Ecosystem in 2024
Reprinted from jinse
01/17/2025·1MSource: Beosin
Currently, virtual asset service providers (VASPs) face multiple challenges such as out-of-sync jurisdictions across countries and regions, inconsistent regulatory maturity, and misaligned anti-money laundering (AML) guidelines. Especially in terms of the legality of virtual assets, contradictions and conflicts between different regions have become increasingly apparent. The lack or fragmentation of regulation in some regions has made the global regulatory framework complex and uncoordinated, exacerbating the operational pressure on companies.
The complexity and inconsistency of the global regulatory environment
Frequent virtual asset security incidents and compliance issues have promoted continued discussions in various countries on the effectiveness of legislation and supervision. However, overlapping and even conflicting authorizations and rules among regulatory agencies bring higher uncertainty to the industry. This environment forces VASPs to be flexible in order to respond to uneven regulatory requirements and navigate the complex global regulatory landscape. At the same time, differences in expectations for regulatory standards in different regions have resulted in VASPs having to bear higher operating costs and resource investment to achieve compliance goals. This asymmetry in compliance costs has seriously affected the globalization process of enterprises.
As global regulatory standardization gradually advances, companies need to develop long-term cross-regional strategies to effectively adapt to the strict and reputable regulatory environment. For example, in jurisdictions that adhere to higher standards, such as Europe, Singapore and Hong Kong, companies can rely on clear regulatory guidance and policy support to build a compliance foundation for long-term development.
Diversity of regulatory developments across regions and their impact
The maturity of regulatory development in each region is not only related to the legislative situation, but also affected by the cost of applying for a license, licensing requirements and subsequent regulatory intensity. Some jurisdictions have adopted policies that severely restrict or even completely ban virtual assets. Such measures can indeed effectively curb illegal activities and regulatory loopholes in the short term, but in the long term, a complete ban on the use of virtual assets may stifle technological innovation and market vitality.
At the same time, regions with slow legislative progress or lack of supervision often find it difficult to provide support for technological innovation and market demand. In this environment, even if VASPs try to introduce advanced compliance processes and anti-money laundering operations, they are often limited by the lack of corresponding legal frameworks. On the contrary, in advanced jurisdictions with clearer regulations, such as Hong Kong, Singapore and parts of Europe and the Middle East, companies can efficiently promote business development and technological innovation under the guidance of policies. These regions have attracted international capital through tax incentives, business environment optimization and the implementation of Travel Rules, and have occupied an important position in the global virtual asset industry.
Seeking a dynamic balance between regulation and innovation
Achieving a balance between supervision and technological innovation on a global scale is the key to promoting the healthy development of the virtual asset industry. Vague or inconsistent regulation can pose risks to VASP operations, but overly strict or inflexible regulation can also stifle innovation. The ideal regulatory environment should be able to protect consumer interests and maintain financial stability, while providing space for the long-term development of the industry.
If VASPs can fulfill their anti-money laundering obligations under a clear regulatory framework while reducing unnecessary compliance costs, this will significantly increase their incentives to do business in relevant regions. For example, Hong Kong and Singapore not only attract companies through tax incentives and policy support, but also cultivate talents in the blockchain field through the improvement of their education systems. Some top universities have already opened blockchain technology courses, establishing a complete ecological chain from technical research to commercial applications.
To promote the development of the Web3 industry, it is also necessary to optimize the business environment based on the actual situation of the region. For example, legislators can balance innovation and risk by establishing a regulatory sandbox to allow companies more flexibility during the testing phase. In addition, the establishment of inter-regional regulatory alliances or mutual recognition frameworks will also help reduce cross-border compliance costs and inject new vitality into the industry.
Synergy of global regulation and technological development
In the future, the development of the global virtual asset industry will depend on the coordination of regulatory policies and the advancement of technological innovation. Countries should adopt inclusive and flexible policy designs to protect consumer rights while stimulating technological breakthroughs. In particular, cross-border cooperation will become an important means to resolve differences in compliance and supervision. For example, by establishing unified regulatory standards and sharing AML data and practical experience, the overall safety and sustainability of the industry can be significantly improved.
As globalization accelerates, VASPs need to have stronger adaptability to cope with the complex and ever-changing regulatory environment. Through in-depth cooperation with governments, industry associations and scientific research institutions, VASP can not only find room for development under strict supervision, but also promote the prosperity and growth of the virtual asset economy on a global scale.
In the next part, we will conduct a detailed analysis of active regulatory countries or regions around the world, focusing on the characteristics and progress of virtual asset regulation in these regions. This will include an overview of the legislative frameworks in major jurisdictions, the implementation of regulatory policies and their impact on industry development. Through these analyses, we can gain a comprehensive understanding of how different countries or regions seek a balance between technological innovation and compliance requirements, and at the same time summarize experiences and strategies that are instructive for VASPs. These insights will provide a powerful reference for industry players to formulate global development plans.
Hong Kong region
Regulatory bodies and laws
In recent years, Hong Kong's status as a global financial center has been challenged and questioned to a certain extent. In response to the growing popularity of virtual assets and related activities in Hong Kong’s economic activities, while consolidating its status as an international financial center, the Hong Kong government actively promotes cryptocurrency regulatory policies and strives to take the global lead in Web3 and encryption innovation. status. The Hong Kong government has adopted a multi-agency collaboration approach by issuing the "Policy Declaration on the Development of Virtual Assets in Hong Kong" and the corresponding anti-money laundering legislative infrastructure, and is gradually establishing a sound regulatory framework. The Legislative Council of Hong Kong is the core body for approving and passing legislation related to financial markets. The Hong Kong Securities and Futures Commission (SFC), the Hong Kong Monetary Authority (HKMA), and the Hong Kong Financial Services and the Treasury Bureau are all competent regulatory authorities and play an important role in supervising cryptocurrency and virtual asset service providers to ensure Market transparency and investor protection develop in parallel.
The Hong Kong government introduced a new virtual asset service provider licensing system in June 2022, in accordance with the Securities and Futures Ordinance (Chapter 571) and the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Chapter 615) (" The Anti-Money Laundering Regulations) requires all institutions that wish to provide virtual asset services to apply for a license from the SFC. One of the core policies of the regime is the Anti-Money Laundering Act, which is the main legislation that all VASPs must follow to ensure transparency and compliance in the market. On December 6, 2024, the Hong Kong government announced the highly anticipated "Stable Currency Bill" in the official gazette. The legislation introduces a detailed regulatory framework tailored for issuers of fiat reference stablecoins (FRS) and aims to position Hong Kong as a global leader in the virtual asset space.
Latest regulatory developments
1. Licensing by the China Securities Regulatory Commission
Currently, Hong Kong SFC has legally licensed seven virtual asset trading platforms (VATP) operations, namely OSL Exchange, HashKey Exchange, HKVAX, HKbitEX, Accumulus, DFX Labs, and EX.io, and 11 more applicants are waiting for approval. The Hong Kong Securities and Futures Commission’s license list effectively improves the transparency of the virtual asset industry, helps the public verify the license application status of virtual asset trading platforms, and ensures that these platforms will not make misleading or false statements about their applications to the Securities and Futures Commission. Investors should always refer to the "List of Licensed Virtual Asset Trading Platforms" provided by the SFC to reduce potential investment risks. This shows that Hong Kong’s VASP license system is meeting new regulatory challenges and will also test the soundness of Hong Kong’s cryptocurrency regulatory framework.
2. Stablecoin supervision
On December 27, 2023, the Hong Kong Treasury Bureau and the Hong Kong Monetary Authority (HKMA) jointly issued a public consultation document, inviting the public to provide opinions on the legislative proposals for the regulatory system for stable currency issuers. Subsequently, on March 12, 2024, the HKMA launched an innovative measure called the "Sandbox Initiative" to provide a pilot environment for entities preparing to issue stablecoins in the Hong Kong market before the relevant legislation officially takes effect. Conduct iterations of regulatory decisions. On July 18, 2024, HKMA announced three stablecoin issuers: JINGDONG Coinlink Technology Hong Kong Limited, RD InnoTech Limited, and joint application Person: Standard Chartered Bank (Hong Kong) Limited, Animoca Brands Limited and Hong Kong Telecommunications (HKT) Limited. On December 6, 2024, the Hong Kong government announced the highly anticipated "Stablecoin Bill", which is an important development in the regulatory framework for stablecoins. The draft aims to provide a legal basis for the issuance, trading and use of stablecoins to ensure market transparency and security. The announcement of this draft marks Hong Kong’s progress in becoming a global leader in the field of virtual assets and also lays the foundation for the future digital financial ecosystem.
3. VAOTC supervision
On February 8, 2024, the Hong Kong government released a public consultation document on the "Legislative Proposal for the Regulation of Over-the-Counter Trading of Virtual Assets". The proposal plans to establish a virtual asset OTC trading service provider with Hong Kong Customs as the regulatory agency. The licensing system requires that all services that provide any virtual assets and money spot transactions in the form of business in Hong Kong (covering all virtual asset over-the-counter trading services) must obtain relevant licenses issued by the Hong Kong Customs and empower the Hong Kong Customs to supervise the licensees. Anti-money laundering compliance and implementation of corresponding statutory and regulatory requirements.
4. Exchange Traded Funds
On April 30, 2024, Hong Kong launched six spot Bitcoin and Ethereum exchange- traded funds (ETFs) and opened them to trading, becoming the first funds in Asia to provide retail investors with the ability to trade cryptocurrencies at spot prices. These include ChinaAMC Bitcoin ETF (3042.HK), ChinaAMC Ethereum ETF (3046.HK), Boshi HashKey Bitcoin ETF (3008.HK), Boshi HashKey Ethereum ETF (3009.HK), Harvest Bitcoin Spot ETF ( 3439.HK) and Harvest Ethereum Spot ETF (3179.HK). These Hong Kong cryptocurrency ETFs have a unique physical redemption model that allows investors to hold cryptocurrencies indirectly by holding ETF shares.
United Arab Emirates
Regulatory bodies and laws
UAE Cabinet Resolution No. 111 gives the power to regulate virtual assets to the Securities and Commodities Authority (SCA), a federal financial institution in the UAE, while payment services are supervised by the Central Bank of the United Arab Emirates (CBUAE). SCA's management responsibilities in the Emirate of Dubai are handed over to the world's first regulatory agency specifically focused on the cryptocurrency industry: Dubai Virtual Asset Regulatory Authority (VARA), which is responsible for regulating virtual assets in all areas of the Emirate of Dubai (excluding the Dubai International Financial Center) and virtual asset-related activities to protect investors and establish international standards for virtual asset industry governance. The regulatory agency of the Abu Dhabi Global Market (ADGM) is the Financial Sector Authority (FSRA), which issues a Financial Services License (FSP) to VASPs. On September 9, 2024, VARA and SCA reached a cooperation agreement to clarify their respective regulatory scopes and formulate licensing and supervision rules for VASPs. Subsequently, on September 30, 2024, VARA revised a number of regulations. The new regulations expanded the scope of supervision to cover the marketing, promotional activities, consulting services, decentralized finance (DeFi) and custody services of virtual assets. There are currently 23 VASPs regulated by VARA (21 active and 2 pending). Relevant legislation "Law No.(4) of 2022 Regulating Virtual Assets in the Emirate of Dubai" provides the basis for legal supervision, and "Law No.(4) of 2022 Regulating Virtual Assets in the Emirate of Dubai" provides the basis for legal supervision. "Virtual Assets and Related Activities 2023" Regulations (Virtual Assets and Related Activities Regulations 2023) provide relevant regulatory framework and guidance for licensing applications. In addition, the Dubai International Financial Center (DIFC), a financial free zone established in the UAE, has independent cryptocurrency regulatory authority. The regulatory authority is the Dubai Financial Services Authority (DFSA) and has an independent virtual assets (VA) framework, including investment and encryption agents. currency system. VARA has no legal jurisdiction within the DIFC and the two regions in Dubai operate independently under different regulations.
Stablecoin Regulation
In June 2024, the Payment Token Services Regulation (Payment Token Services Regulation) issued by CBUAE provides a regulatory framework for legal currency stablecoins, requiring any company operating in the UAE and providing token issuance (Payment Token Issuing), token exchange (Payment Local or international institutions that provide services such as Token Conversion) and Payment Token Custody and Transfer (Payment Token Custody and Transfer) need to obtain permission from the UAE Central Bank in advance.
In October 2024, the Central Bank of the UAE approved in principle AED Stablecoin under the Payment Token Services Regulatory Framework, making it the first regulated dirham-pegged stablecoin in the UAE. If fully approved, AED Stablecoin’s AE Coin will be able to be used as a native trading pair on exchanges and decentralized platforms, while allowing merchants to use AE Coin to pay for goods and services. In addition, Tether also plans to launch a stablecoin pegged to the dirham.
Taiwan region
Regulatory entities and laws
Taiwan's Financial Supervisory Commission (FSC) is the competent authority for anti-money laundering on cryptocurrency platforms and trading businesses, and is responsible for the supervision and regulation of local cryptocurrency transactions.
In order to strengthen the supervision of virtual assets, the FSC has formulated a number of management measures and guiding principles, including the "Measures for Preventing Money Laundering and Combating Terrorism Financing on Virtual Currency Platforms and Trading Businesses" promulgated in 2021 and the "Banks and Virtual Currencies" formulated in 2023 Self-regulatory regulations for establishing business relationships and transaction monitoring between platforms and trading businesses. Article 6 of the Money Laundering Prevention Law (Addition to the VASP Anti-Money Laundering Registration System and Criminal Liability of Illegal Business Operators), which was revised and passed in July 2024, was officially implemented on November 30 of that year, requiring those who have not completed anti-money laundering registration not to provide VA services, and New amendments to the Anti-Money Laundering Law have been added. At present, the FSC has formulated the "Registration Measures for Money Laundering Prevention of Enterprises or Persons Providing Virtual Asset Services" (referred to as the VASP Registration Measures) in accordance with the second authorization of Article 6 of the Law. At present, the FSC has studied the draft provisions of the "Special Law on Virtual Asset Management" and is expected to submit the draft law to the court before June 2025 (FSC plans to promote the improvement of VASP supervision through four steps: managing virtual asset operators, establishing an association to formulate self-discipline, strengthen anti-money laundering management, and formulate special laws).
regulatory or other requirements
Since July 2021, Taiwan has promulgated the "Virtual Currency Platforms and Trading Businesses to Prevent Money Laundering and Combat Fundraising" for businesses engaged in cryptocurrency acceptance, currency exchange, token transmission/storage, token issuance and sales. Fearful Measures". In 2024, Taiwan's "Executive Yuan" passed the amendments to the "Four New Anti-Fraud Laws", which include drafts such as the "Regulations on the Prevention of Fraud and Crime (Special Anti-Fraud Law)" and the "Money Laundering Prevention Law". Following the formulation of a number of regulatory guidelines for virtual asset service providers in Taiwan in 2023, including the "Self- regulatory Code for Establishing Business Relationships and Transaction Monitoring between Banks and Virtual Currency Platforms and Trading Business Enterprises", on March 29, 2024, Taiwan approved the The establishment of the VASP Association. Currently, a total of 26 virtual asset service providers have completed compliance declarations. It is planned to continue to conduct special financial inspections on 6 VASP operators in Q4 of 2024 (previously, 4 VASP anti-money laundering special inspections have been completed). At present, the FSC has issued the "Money Laundering Prevention Registration Measures for Enterprises or Persons Providing Virtual Asset Services" (VASP Registration Measures), which has been implemented on November 30. VASP platform operators must apply for registration before March 31, 2025, and complete the registration before September 30, 2025; if they fail to complete the registration after the expiration date and continue to operate, they may be sentenced to a maximum of 2 years in prison, or a combined fine of 500,000 yuan Fines of up to 10,000 yuan.
South Korea
Regulatory entities and laws
On July 19, 2024, South Korea’s Virtual Asset User Protection Act (PVAU) officially came into effect. It was passed by the National Assembly of South Korea and gave the South Korean Financial Services Commission (FSC) the power to regulate the cryptocurrency industry. The bill aims to protect the interests of domestic investors and promote market integrity: it defines virtual assets as digital assets that can be traded or transferred electronically, and stipulates the basic rights and obligations of users and service providers (such as requiring VASPs to purchase commercial Insurance, establishment of reserves, establishment of transaction monitoring and reporting systems, payment of interest income on Korean won deposits to customers, etc.), while negative enumeration excludes certain assets (such as NFT and CBDC) from supervision. According to the Amendment Act to the Executive Order of the Financial Services Commission (FSC) Establishment Act, virtual asset operators are required to pay corresponding regulatory fees based on operating income. Cryptocurrency exchanges such as Upbit, Bithumb and Coinone will begin to pay regulatory fees starting in 2025. fee.
The Korean FSC and the Korean Financial Intelligence Unit (KoFIU) (an agency established under the Financial Transaction Reporting Act) are responsible for the specialized supervision of virtual assets, ensuring that virtual asset service providers comply with laws and regulations and protect the interests of investors. Among them, the FSC is responsible for formulating policies and has the authority to supervise, inspect and punish virtual asset service providers (VASPs) to ensure that VASPs comply with the "Anti-Money Laundering and Anti-Terrorist Financing Business Regulations", including customer identification, transaction monitoring and other measures. In accordance with the revised "Reporting and Use of Certain Financial Transaction Information Act", the FSC will implement travel rule requirements for VASPs starting from March 25, 2022. The travel rule, designed to prevent money laundering using virtual assets, requires VASPs to provide relevant information about users sending and receiving virtual assets when asked to transfer virtual assets to another VASP. KoFIU is responsible for processing business activity declaration information and receiving suspicious transaction reports (STRs) submitted by financial institutions and analyzing them before sending them to the corresponding law enforcement agencies.
regulatory or other requirements
South Korea implements a licensing system for cryptocurrency trading. VASPs not only have basic anti-money laundering obligations and reporting obligations to the FIU, but also have additional obligations such as user classification and transaction details classification. Virtual asset operators also need to set acceptance conditions, such as the issuance of deposit and withdrawal accounts with real-name confirmation of financial company operators, information protection management system certification (ISMS), and representatives with no criminal experience, etc. Failure to declare business operations will result in a prison sentence of not more than 5 years and a fine of not more than 50 million won. The obligations that financial companies that trade with VASP need to comply with include: checking the operator's representative and transaction purpose, checking whether the operator submits declarations, and whether the funds are managed separately, etc. Recently, KoFIU announced the virtual asset business reporting status of 40 virtual currency operating companies as of January 3, 2025.
Japan
Regulatory entities and laws
In Japan, cryptocurrency regulatory entities include national regulatory agencies and virtual asset self-regulatory organizations, namely the Japan Financial Services Agency (FSA), the Financial Intelligence Center (JAFIO), the Japan Cryptocurrency Exchange Association (JVCEA), and the Japan Securities Exchange Securities Issuers Association (JSTOA), Japan Blockchain Association (JBCA). In Japan, the Financial Services Agency (FSA) is the main agency that regulates business activities in digital currencies such as Bitcoin. While strengthening its own supervision, the Japan Financial Services Agency has also given greater power to the Japan Cryptocurrency Exchange Association, an industry organization, giving it the power to regulate and punish industry companies. The government and the industry collaborate in depth to jointly promote the healthy development of the industry. The Japan Financial Services Agency is responsible for licensing and registering cryptocurrency trading platforms to ensure that the platforms have necessary compliance requirements and security measures; supervising and monitoring cryptocurrency trading platforms to ensure that the platform’s trading activities are compliant, fair and transparent; responsible Assess and manage the risks of cryptocurrency trading platforms, including network security risks, market risks, investor risks, etc.; impose penalties and penalties for violations to maintain market order and investor rights. Japan’s cryptocurrency anti-money laundering law, which will be implemented from June 2023, incorporates the Financial Action Task Force’s “Travel Rules”, requiring financial institutions that handle the transfer of crypto assets to pass customer information to the next institution, including the sender and recipient. The name and address of the violator. The target crypto assets include stablecoins or cryptocurrencies pegged to currencies such as the U.S. dollar or commodities. Violators who fail to comply with the authorities’ corrective orders will face criminal penalties. Starting in April 2024, Japanese companies will no longer pay taxes on the unrealized gains on their cryptocurrency holdings. This will bring corporate tax obligations more in line with those of retail investors under current Japanese law.
regulatory or other requirements
The Japan Financial Services Agency adopts a registration system to supervise cryptocurrency trading institutions. To register and establish a Japanese digital currency trader, certain conditions must be met, including establishing a Japanese legal person company, leasing a Japanese office, employing Japanese employees (one of whom is a director of a Japanese company), the Japanese company opening a public bank account, and having normal transactions. system (Japanese version is not required), provide KYC information, etc. According to data on May 13, 2024, there are currently 29 cryptocurrency exchange service providers registered in Japan. Since 2018, the Japan Financial Services Agency has become very strict in its approval of cryptocurrency exchanges. At the same time, the Japan Financial Services Agency requires digital currency exchanges, including Bitcoin, to implement stricter KYC policies than currently. Exchanges must begin to verify the identity of account users, keep transaction records, and report suspicious transactions to regulatory agencies.
Stablecoin issuance and supervision
On March 4, 2022, the "Bill to Partially Amend the Payment Services Act and Others to Establish a Stable and Efficient Fund Settlement System", which aims to introduce new regulations on stablecoins, was submitted to Congress. The bill was approved on June 3, 2022, and will come into effect on June 1, 2023. Institutions that are allowed to issue EPI (i.e. currency-denominated stablecoins) directly to Japanese residents are limited to banks, fund transfer service providers, trust banks or trust companies licensed in Japan. This is because the issuance and exchange of EPI constitutes a "funds remittance transaction" (kawase-torihiki). Without being registered as an EPIESP (Electronic Payment Institution License) CAESP cannot list EPI on any exchange, nor can it manage EPI for its users. EPIESP is subject to anti-money laundering/counter-terrorist financing regulations, including the “travel” rules. In addition, EPIESPs that regularly send or receive EPI to overseas virtual asset service providers (VASPs) need to check whether these VASPs are conducting appropriate anti-money laundering/anti-terrorist financing due diligence on their users.
Singapore
Regulatory entities and laws
Singapore’s cryptocurrency regulation is jointly responsible for multiple government agencies, the most important of which is the Monetary Authority of Singapore (MAS), which is responsible for supervising the entire financial market including cryptocurrency (cryptocurrency)-related activities and Develop corresponding policies. Cryptocurrency exchanges and wallet service providers are required to obtain licenses under the Payment Services Act (PSA) to ensure the security and consumer protection of digital payment tokens. The Payment Services Act provides regulatory certainty to an ill-defined industry. Payment services under the PSA include account issuance services, electronic currency issuance services (comparable to stablecoin issuance in the context of cryptocurrencies), cross-border remittances There are 7 types of services, domestic remittance services, merchant collection services, digital payment token (DPT) services and currency exchange services. All enterprises classified as payment service providers need to obtain a PSA license. In April and September 2024, the Guidelines on Consumer Protection Measures by DPT Service Providers were revised. The Guidelines set out MAS’ expectations on what measures digital payment token service providers should take to address consumer protection risks. In October 2024, the MAS released a consultation paper outlining the regulatory regime applicable to digital token service providers providing services outside Singapore under the Financial Services and Markets Act (FSMA), moving towards a regulatory boom. The digital asset market has taken an important step.
regulatory or other requirements
Under the Payment Services Act, cryptocurrency service providers need to register and obtain a license from MAS to operate. The current three types of PSA licenses are: Money-Changing License currency exchange license, Standard Payment Institution (SPI) standard payment license and Major Payment Institution (MPI) large payment license. Currently SPI and MPI can be applied to digital currency exchanges. This includes, but is not limited to, cryptocurrency exchanges, e-wallet providers, etc. Service providers also need to demonstrate their capabilities and procedures that comply with anti-money laundering requirements, such as risk-based assessment methods, strict customer identification (KYC), transaction monitoring (identifying suspicious transactions, large transactions, frequent small transactions, or transactions with high-risk countries or regions), suspicious activity reporting (if service providers detect signs of money laundering or terrorist financing activities, they must report to the Financial Services Authority of the Monetary Authority of Singapore (MAS) and the Singapore Police Force (Singapore Police Force). reporting of suspicious transactions by criminal investigation departments), complete record keeping (cryptocurrency platforms are required to retain transaction records for at least five years), etc. In addition, the Bank of Singapore issued a Digital Payment Token (DPT) service license to enable companies to provide cryptocurrency services. It is reported that Crypto.com, Genesis and Sparrow Exchange have obtained this license.
European Union
Regulatory bodies and laws
The EU’s Sixth Anti-Money Laundering Directive (6AMLD), adopted in 2020, expanded the definition of the crime of “money laundering” to cover more criminal activities, including the use of cryptocurrencies. After long negotiations and revisions, the MiCA regulations were approved by the European Parliament on April 20, 2023. However, its entry into force is not immediate, as a transition period was set up to allow market participants to adapt to the new rules. The publication date of the MiCA regulations in the Official Journal of the European Union is June 9, 2023, marking the beginning of this transition period. Implementation of the MiCA regulations will be carried out in phases, with a transition period of 24 to 36 months set for the 27 EU countries. This gradual implementation is intended to ensure a smooth transition to the new system, giving businesses the necessary time to comply with these new requirements. Before MiCA is fully implemented, each EU member state has established its own cryptocurrency service provider (VASP) licensing and registration requirements. The financial regulatory agencies of each member state (such as the UK's Financial Conduct Authority, Germany's BaFin, etc.) have implemented specific registration and regulatory requirements in accordance with the EU's anti-money laundering directives (such as 6AMLD). Once MiCA officially comes into effect (which will take effect gradually from 2024), all EU member states will follow a unified virtual asset service provider licensing framework to ensure consistent regulatory standards for the cryptocurrency industry. MiCA establishes a unified regulatory framework for cryptocurrency service providers, including a regulatory licensing system for cryptocurrency issuers and virtual asset service providers (VASPs).
regulatory or other requirements
The CASP regulatory rules will take effect in December 2024 to ensure that virtual asset providers comply with anti-money laundering regulations and further strengthen the supervision of cryptocurrency. Any company that provides virtual asset services (such as cryptocurrency exchanges, wallet service providers, custody service providers, etc.) in the EU needs to obtain a license from EU regulators. These service providers need to apply for licenses from relevant regulatory agencies and comply with a series of compliance requirements, including consumer protection, anti-money laundering (AML), customer due diligence (KYC), transaction monitoring and identification, suspicious activity reporting, employee training, and capital adequacy requirements, etc. MiCA has made a detailed classification of cryptocurrency-related activities, including the issuance of crypto assets (such as initial coin offerings (ICOs), etc.), crypto asset trading and exchange (activities involving cryptocurrency exchanges), cryptocurrency wallet management (involving digital Asset storage and management), and other related services such as cryptocurrency clearing, settlement, investment advisory, etc. At the same time, MiCA provides cryptocurrency service providers with the possibility of operating cross-border in the EU market, that is, a license from one member country can be valid in other EU member states without repeated applications. This means that once a company is licensed in one member state, it can operate throughout the EU. At the same time, the European Securities and Markets Authority ESMA has the power to take enforcement measures against non-compliant CASPs.
Stablecoin issuance and supervision
The governance rules of stablecoins will take effect in June 2024, which provide stablecoin issuers with clear guidance on reserve requirements and redemption mechanisms for the issuance of fiat currency stablecoins. Multiple criteria are used to define whether requirements are met, such as market size, business scenario, customer base, transaction volume, etc.
USA
Regulatory entities and laws
The U.S. virtual currency regulatory system is relatively complex, involving two levels of regulation at the federal and state levels. The U.S. Securities and Exchange Commission (SEC) is responsible for the supervision of securities virtual assets, and the U.S. Commodity Futures Trading Commission (CFTC) is responsible for the supervision of commodities and derivatives virtual assets. U.S. anti-money laundering measures are closely linked to international anti- money laundering standards such as the Financial Action Task Force, and FinCEN, the Financial Crimes Enforcement Network, is responsible for anti- money laundering and counter-terrorism financing-related supervision. May 22, 2024 The U.S. House of Representatives passed the Financial Innovation and Technology Act for the 21st Century (FIT 21), demonstrating bipartisan support for clear encryption policies and providing clearer guidelines for the division of jurisdiction between the CFTC and SEC. The cryptocurrency and virtual asset industry provides a clearer regulatory framework that enhances market transparency and compliance. It also provides more effective regulatory tools to prevent cryptocurrency abuse, protect consumers, and maintain financial stability. For cryptocurrency platforms and exchanges, the FIT 21 bill may bring higher compliance costs, including strengthening compliance teams, system development, and compliance audits. For some small or start-up encryption companies, they may face. It’s not a small burden. And because cryptocurrency transactions are often cross-border, the implementation of the FIT 21 bill may require global cooperation to ensure international regulatory coordination and information sharing, which constitutes supervision of the global cryptocurrency market. Challenges. Although the bill helps prevent the abuse of cryptocurrencies, overly strict regulation may have an inhibitory effect on innovation in blockchain technology and cryptocurrencies, especially in the development of new decentralized finance (DeFi) applications and innovations products. Under the new administration, there may be more new encryption legislation to come.
regulatory or other requirements
The regulation of cryptocurrency in the United States does not have a unified national licensing system, but relies on multiple federal and state-level regulatory frameworks. Specific license and permit requirements vary by state and business type. According to FinCEN regulations, cryptocurrency trading platforms (such as Bitcoin exchanges) and other cryptocurrency service providers (such as wallet service providers, payment service providers) need to comply with anti-money laundering regulations including MSB (Money Services Business) registration and reporting , Customer Due Diligence (CDD), large amounts (more than US$10,000) and suspicious transaction reports (Suspicious Activity Reports). Although there is no unified cryptocurrency licensing system in the United States, other federal regulatory agencies, the SEC and CFTC, also have different regulatory requirements for certain specific businesses. For example, the SEC may require certain cryptocurrencies to be classified as securities in certain circumstances, meaning that these cryptocurrencies must comply with securities laws and registration requirements. The CFTC regulates cryptocurrency futures and derivatives markets.
U.K.
Regulatory entities and laws
The UK has an independent legal framework for virtual assets rather than under the MiCA framework. The Financial Conduct Authority (FCA) is one of the main agencies regulating cryptocurrencies in the UK. It regulates certain crypto- related activities to prevent financial crime, protect consumer rights, and ensure market integrity. For example, companies engaged in crypto-related businesses are required to register and comply with relevant regulations such as anti-money laundering (AML) and counter-terrorism financing (CTF). Cryptocurrency trading platforms and wallet providers are regulated to ensure that their operations comply with regulatory requirements and prevent It is used for illegal activities.
regulatory or other requirements
Regulation of cryptocurrencies in the UK takes the form of registration and licensing. Companies providing crypto services to the UK need to obtain FCA approval. Registered companies also need to be re-evaluated and confirmed according to the new requirements after the new system is implemented. Additionally, foreign companies wishing to conduct regulated crypto business in the UK can apply for UK authorization for a UK branch. Currently, 48 crypto asset companies have registered with the FCA.
Issuance and supervision of stablecoins
The Financial Services and Markets Bill was passed in 2023. The passage of this bill laid the foundation for the UK's regulation of cryptocurrencies, including stablecoins, and clarified that the Ministry of Finance, the Bank of England and the Financial Conduct Authority (FCA) have the authority to regulate cryptocurrencies and Stablecoin. Stablecoin issuers will need to obtain authorization from the FCA to engage in stablecoin issuance activities. The FCA has the right to require stablecoin issuers to deposit all reserves in legal trusts to protect the stability of the value of stablecoins and the rights and interests of investors. The government plans to develop a financial market infrastructure sandbox to support companies using blockchain and other technologies to provide financial market infrastructure services. This also provides a certain experimental environment for the innovative issuance and application of stable coins.
Türkiye
Regulatory entities and laws
As the world's fourth largest cryptocurrency market, Turkey's trading volume in 2023 reached US$170 billion, surpassing Russia and Canada, demonstrating its important position in the cryptocurrency field. However, Türkiye still faces many challenges between regulation and market development. Although buying, holding and trading cryptocurrencies is legal in Turkey, using cryptocurrencies as a payment instrument has been banned since 2021. This means that although investors are free to trade, they cannot directly apply cryptocurrencies to daily consumption scenarios.
CMB (The Capital Markets Board of Turkey) is the national financial management and supervision agency, also known as SPK (Sermaye Piyasası Kurulu). On July 2, 2024, CMB officially announced the Capital Market Law Amendment No. 7518 (Law No. 32590) to incorporate regulations on crypto asset service providers (crypto asset service providers "CASPs") and crypto assets into legislation. Furthermore, on December 25, 2024, the main provisions of the new anti-money laundering regulations were clarified, focusing on the setting of transaction thresholds, processing of risky transactions and restrictions on unregistered wallets, striving to improve the transparency and security of cryptocurrency transactions.
regulatory or other requirements
Crypto-asset service providers (CASPs) are required to be licensed by the CMB, and activities related to investment consulting and asset management related to crypto-assets will require the CMB to issue an activity authorization certificate and comply with the standards set by TUBITAK (Turkey’s Scientific and Technological Research Council). As of December 2024, 77 cryptocurrency companies have applied to the Turkish Capital Market Commission for operating licenses. According to the new regulations, when users perform cryptocurrency transactions exceeding 15,000 Turkish lira (approximately $425), they are required to submit complete identity information to the service provider. For transactions below this threshold, service providers may optionally collect relevant information. This regulation aims to ensure the traceability of large transactions, thereby effectively curbing illegal financial flows. If a cryptocurrency sender fails to provide sufficient information, their transaction will be marked as "high risk." The service provider has the right to take a variety of measures in this case, including refusing the transaction, restricting cooperation with relevant financial institutions, and even terminating the business relationship with the transaction party. This provision provides service providers with greater discretion and helps improve the security of the overall transaction system. Wallet addresses that are not registered on the platform are also strictly regulated. The service provider needs to collect the identity information of the sender, otherwise the relevant transactions will be restricted. This measure is aimed at combating illegal activities such as money laundering and financing of terrorism through anonymous wallets.
Through the above measures, the Turkish government hopes to establish a more transparent and secure trading environment in the cryptocurrency field and lay the foundation for the standardized development of the industry in the future.
Malaysia
Regulatory entities and laws
The Securities Commission of Malaysia (SC) is one of the important entities responsible for cryptocurrency regulation and is responsible for regulating the securities market, including cryptocurrency trading. It supervises cryptocurrency trading platforms, digital asset custody institutions, etc. in accordance with relevant laws and guidelines to ensure that market participants meet regulatory requirements. Bank Negara Malaysia (BNM): Mainly responsible for formulating anti-money laundering and counter-terrorism financing policies. Although it does not regard cryptocurrency as a legal currency or payment instrument, it will pay attention to the risks related to the cryptocurrency field and monitor trends in key indicators to maintain financial stability. Stablize.
regulatory or other requirements
The Securities Commission of Malaysia (SC) requires companies engaged in cryptocurrency-related businesses to comply with the licensing system: Relevant companies need to be recognized by the Securities Commission of Malaysia and comply with its regulatory standards. For example, digital asset exchanges must accept SC’s registration application before they can register with the SC. Operating legally in Malaysia. As of December 2024, there are 12 institutions under the supervision of the SC, including 6 Digital Asset Exchange (DAX) Operators, 2 Initial Exchange Offering (IEO) Operators, and 4 Digital Asset Custodians (DAC).
Thailand
Regulatory bodies and laws
The Securities and Exchange Commission of Thailand (SEC) is one of the core entities in Thailand’s cryptocurrency regulation. It is responsible for supervising cryptocurrency-related businesses and market participants, including the licensing and supervision of cryptocurrency exchanges, brokers, dealers, etc., and for digital tokens. Conduct review and supervision on issuance, trading and other activities. The "Digital Asset Business Act" is the basic law for the supervision of cryptocurrency in Thailand. It came into effect on May 14, 2018. The Act defines cryptocurrency and other digital tokens as "digital assets" and clarifies the legal status of digital assets. It stipulates the legal framework for digital asset-related businesses and provides an important basis for cryptocurrency supervision in Thailand.
regulatory or other requirements
The Securities and Exchange Commission of Thailand (SEC) requires that a business must be a company registered under Thai law and have a certain amount of paid-in registered capital, ranging from 1 million baht (approximately US$30,000) to 50 million baht, depending on the license type. Businesses such as digital asset trading centers, brokers, and dealers must obtain approval from the Securities and Exchange Commission of Thailand.
Cryptocurrency exchanges and other related business operators need to obtain a license from the Securities and Exchange Commission of Thailand and have an initial capital of at least 50 million baht. The platform must have strong security measures to protect user assets and prevent hacker attacks. Digital asset business operators and digital token portal service providers adhere to strict anti-money laundering and counter-terrorism financing requirements, including conducting due diligence on customers, implementing risk-based internal controls, and reporting suspicious transactions to authorities. In addition, cryptocurrency exchanges must promptly disclose user information to protect investors’ right to know. Currently, a total of 38 Digital Asset- related operating licenses have been issued.
the Philippines
Regulatory bodies and laws
The Bangko Sentral ng Pilipinas (BSP) is one of the important entities in cryptocurrency regulation in the Philippines. It regulates cryptocurrency transactions by issuing relevant guidelines and regulations, such as BSP Circular No. 944, which requires cryptocurrency exchanges to register with it as a remittance and Transfer companies and comply with relevant operational requirements, including consumer protection measures, anti-money laundering and anti-terrorist financing regulations, etc., and are also responsible for supervising the pilot work of stable coins.
The Philippine Securities and Exchange Commission (SEC) is responsible for regulating activities such as initial coin offerings (ICOs) and cryptocurrency investments in the cryptocurrency field. The SEC will issue relevant guidelines and warnings, requiring companies conducting ICOs to register with it and comply with securities regulations to protect the rights and interests of investors and prevent fraud and market manipulation.
regulatory or other requirements
The Philippines adopts a licensing system for the regulation of cryptocurrency. VASPs such as cryptocurrency exchanges need to obtain a license issued by the BSP to operate in the Philippines. Different businesses may also require additional licenses, such as electronic money issuers (EMI) and remittances. Money Transfer Company (RTC) and other licenses. In addition, the Philippine Special Economic Zone Cagayan Economic Zone Authority (CEZA) also planned to issue a limited number of cryptocurrency exchange licenses and set strict investment and investment requirements for licensed exchanges and their subordinate traders and brokers. Operational requirements, but these are regulations in specific economic zones. So far, 14 cryptocurrency service providers have been licensed.
The BSP set travel rules, which are triggered for cryptocurrency transactions of at least 50,000 Philippine pesos (approximately US$1,000) or its equivalent in foreign currencies, requiring VASPs to share information about parties to cryptocurrency transactions to prevent the exploitation of cryptocurrencies. Conduct illegal fund transfers and other activities.
Issuance and supervision of stablecoins
On May 9, 2024, the BSP approved a pilot project for the Philippine peso- backed stablecoin PHP C issued by Coins.ph, which will be conducted within the BSP’s regulatory sandbox to evaluate the functionality of the stablecoin and its impact on the Philippines potential impact on the financial system.
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