This week, TRM’s policy team—Ari Redbord, Angela Ang, and Isabella Chase—got together to unpack another busy quarter for crypto policy around the world. Read the recap below for the key highlights, or watch the recording for the full discussion, including some curveball questions from the audience!
Implementation, implementation… implementation?
In APAC, Singapore and Hong Kong saw significant strides in regulatory implementation. In Singapore, the much-anticipated licensing and regulation regime for crypto custody providers—and crypto consumer protection measures—finally went live in April. In Hong Kong, the grace period for virtual asset trading platforms to operate without a license concluded on June 1, which brought with it a cleansing of sorts as numerous firms dropped out of the application process.
In Europe, bumps have emerged as the June 30 implementation deadline for the first tranche of MiCA rules for electronic money tokens and asset-referenced tokens approaches, particularly around definitions. Tokenization was a theme this quarter, with more clarity on the EU DLT pilot regime, as well as a report from the UK Investment Association finding no significant regulatory barriers to tokenization.
Meanwhile in the US, we did not get quite so close to implementation—but the quarter did see the House of Representatives passing the FIT Act. The Act, which would address regulatory jurisdiction over crypto markets, still needs Senate and presidential approval to pass, but this was a step forward. For insight into current US policy thinking, Ari’s recommended reading included the Treasury’s NFT risk assessment and the CFTC Technology Advisory Committee report on DeFi.
Is this the year of the crypto election?
Elections were also a major influence on crypto policy, for better or worse. The UK election has paused several key pieces of work, including stablecoin regulation and staking policies. Over on the continent, the French snap election could add further uncertainty.
In the US, crypto is definitely an election issue, with both Biden and Trump expected to touch on crypto in the upcoming presidential debate. With the Trump campaign strongly supportive of crypto, the Biden administration’s rhetoric has also softened.
With close to half the world heading to the polls in 2024, the team debated whether 2024 would be the year of the “crypto election.” While the impact of politics on crypto policy is undeniable, it has yet to emerge as a defining issue for electoral victory, especially in jurisdictions seeing bipartisan support for the digital asset space.
Law enforcement wins
One theme worth celebrating were the significant law enforcement victories in the crypto space.
This quarter, Europe saw the takedown of the LockBit ransomware group and arrests related to an illegal exchange that processed over a billion pounds. These wins are reflective of a broader global trend we have observed since last year—where TRM Labs’ analysis found that a drop in illicit crypto volumes coincided with stronger law enforcement actions across the globe. Investment in tooling and expertise were an important driver. In TRM’s law enforcement survey, over 50% of respondents that said they had the right tools viewed crypto investigations as easier than conventional ones.
Sanctions also played a significant role in targeting illicit finance in crypto. Isabella highlighted the proactive measures taken by the US and UK in response to the Russia-Ukraine conflict, and the recent European Council sanctions aimed at curbing financial networks supporting the war effort.
The road ahead
Angela expected the focus on regulatory implementation to continue in APAC, with Singapore and Hong Kong leading the way.
Isabella will be watching MiCA implementation dates in Europe, as well as the upcoming elections, which would undoubtedly define what 2025 has in store for the world of digital assets.
With Singapore’s FATF presidency concluding this month, the agenda of the new presidency will also be something to look forward to.
And over in the US, Ari anticipated a hot crypto summer in DC, with July being a key month to watch for any further legislative movement before November’s elections.
Overall, the group remained hopeful for the development of the crypto industry, and that the industry would continue to build well even as regulatory policy evolves.
For a regular dose of policy updates and first dibs on the next policy roundtable, subscribe to The Weekly Roundup on LinkedIn.
Access our coverage of TRON, Solana and 23 other blockchains
Fill out the form to speak with our team about investigative professional services.
