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Developments in the Regulation of Cryptoassets

In April 2019, the Law Library’s foreign law specialists completed a new multinational report titled Regulatory Approaches to Cryptoassets. This was our fourth major report on cryptocurrencies and other assets that utilize distributed ledger technology, such as blockchain. We first wrote in 2014 about what forty governments were saying and doing in relation to the emergence of “bitcoin.” In 2018, we wrote about multiple additional countries – 130 in total — showing the progress of the issues and discussions. Accompanying the 2018 report was another one that looked at fourteen jurisdictions where regulatory frameworks for cryptocurrencies were at a relatively advanced stage.

Poker chips with cryptocurrency coins. Photo by Flickr user Marco Verch Professional Photographer and Speaker, Feb. 12, 2019. Original photo at https://foto.wuestenigel.com/poker-chips-with-cryptocurrency-coins/. Used under Creative Commons License, https://creativecommons.org/licenses/by/2.0/.

The April report primarily focuses on the treatment of cryptoassets under regulatory systems for financial products, markets, and services, such as those used to regulate the trading of shares or securities, and on the development of separate systems specifically for cryptoassets. It covers 46 jurisdictions that have indicated particular policy approaches or enacted laws in this area. The report also provides updates on other areas of regulation, including taxation and anti-money laundering rules applicable to cryptoassets.

The report shows that around a dozen countries have recently enacted new laws that specifically regulate aspects of cryptoasset markets, including exchanges, brokers, and wallets. There has been a particular focus in some countries on initial coin offerings (ICOs), with several financial regulatory agencies providing detailed guidance on how such offerings might be regulated (or not) in the absence of specific rules (see, e.g., the Security and Exchange Commission’s webpage on ICOs). In addition, many regulatory agencies around the world continue to provide warnings to the public with respect to investing in cryptocurrencies.

There are ongoing developments in this area — both in terms of the technology and the regulatory approaches — and a number of countries covered in the report have announced plans for new laws and regulations. The report is therefore a kind of “snapshot” of the current situation around the world with respect to regulating cryptoassets. It seems very likely that we will be looking at this topic again in the future. You can also find information on some new regulatory developments on cryptocurrency in our Global Legal Monitor publication.

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