TRM Labs Finds Link Between Stronger Regulation and Reduced Illicit Activity In New Report

2023 was a year to be remembered in crypto policy. It began with FUD in the wake of the collapse of FTX. However, the following 12 months saw an extraordinary boom in regulation across the globe.

The EU passed the watershed Market in Crypto Assets (MiCA) legislation. Hong Kong’s licensing regime went live. Singapore finalized its stablecoin framework and enhanced consumer protection rules. South Korea passed its first omnibus digital asset legislation. Australia detailed its regulatory framework for digital assets and stablecoins. And in the US, stablecoin and market structure bills progressed out of Congress’ House Financial Services Committee. 

In our latest report:

• TRM Labs looks at 2023 crypto policy developments in 21 jurisdictions representing approximately 70% of global crypto exposure.
• We found that 80% of these jurisdictions have moved to tighten crypto regulation, and almost half have specifically progressed consumer protection measures.
• Our analysis also found a correlation between stronger regulation and reduced illicit activity – virtual asset service providers (VASPs) in countries with full licensing and supervision regimes have lower rates of illicit activity than those in less regulated jurisdictions.