Crypto Regulation Landscape 2024 Key Global Trends
The global crypto regulatory landscape in 2024 is undergoing a significant transformation as the crypto ecosystem matures. Explore key trends shaping the landscape: MiCA, the Travel Rule, stablecoin regulation, sanctions, and enforcement action.
MiCA Sets a Precedent for Comprehensive Crypto Regulation
The European Union’s Markets in Cryptoassets (MiCA) regulation is a comprehensive framework that harmonizes crypto regulations across the EU. MiCA went into effect for stablecoin and e-money token issuers starting in June 2024. Broader crypto regulation for cryptoasset service providers (CASPs) will come into force at the end of 2024.
MiCA’s principles are influencing regulatory approaches in other regions, particularly regarding the need for comprehensive frameworks to manage cryptoasset-related risks.
Expansion of the Travel Rule to Crypto Transactions
The expansion of the Travel Rule to include crypto transactions is a global trend aimed at enhancing transparency and combating illicit finance. The Travel Rule requires financial institutions to share information relating to payments above defined value thresholds with the receiving financial institution to combat money laundering and terrorist financing.
The Travel Rule increases the regulatory burden on virtual asset service providers (VASPs) and demands a more rigorous level of compliance with global anti-money laundering and counter-terrorist financing (AML/CFT) standards. In the EU, the Travel Rule obligations for CASPs will take effect on December 30, 2024. Other jurisdictions have already made it a requirement, though global implementation remains uneven.
Growing Focus on Regulating Stablecoins
Globally, there is growing focus on regulating stablecoins, driven by concerns about financial stability, consumer protection, and financial crime. Regulators are emphasizing the responsibility of stablecoin issuers to mitigate risks.
Major jurisdictions like the EU, Singapore, and Hong Kong are leading the way in regulating stablecoins.
Increased Scrutiny of Crypto-Related Sanctions Evasion
There is a strong emphasis on ensuring robust sanctions compliance in the crypto industry. Global authorities, especially in North America, are intensifying efforts to oversee the crypto industry and prevent money laundering. The US has imposed multiple financial sanctions involving cryptoasset activity, particularly targeting entities involved in illicit activities and evading US sanctions.
Increased Enforcement Action
The US Securities and Exchange Commission (SEC) has taken an aggressive stance, targeting DeFi projects. Additionally, the US Department of Justice has charged several crypto companies for violating US sanctions and AML/CFT laws.
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