5 Crypto Regulatory Updates You Should Know

The world of cryptocurrency is no stranger to disruption. With the rise of Bitcoin and other digital assets, a new era of financial freedom and endless possibilities emerged. However, with this freedom there is uncertainty in the industry, as regulators struggle to keep up with it. This has led to the constant introduction of crypto regulatory updates in the industry.

In recent years, a series of high-profile scandals and collapses – from Terra Luna to FTX – have highlighted the need for clear and effective regulations. As the crypto market continues to mature, governments and regulatory bodies worldwide take steps to establish a framework for this new asset class.

But what do these regulations mean for you? Whether you’re a seasoned crypto enthusiast or just starting to explore the world of digital assets, understanding the crypto regulatory updates is crucial.

Here, we will see the most important crypto regulatory updates you need to know, from fresh SEC appointments to Anti Money Laundering stipulations.

5 latest crypto regulatory updates

New Faces at the SEC

The U.S. Securities and Exchange Commission(SEC) now has a new leadership. As such, experts believe crypto regulation will gain clarity and instead of witch hunts. In addition, companies will enjoy fairness, transparency, and collaboration from the government.

Trump has quickly eliminated most of the past administration’s approach to digital assets and established the President’s Working Group on Digital Asset Markets. With new appointees like acting SEC Chairman, Mark Uyeda, and Crypto Task Force head, Hester Peirce, optimism for relaxed restrictions is at a fever pitch. Then you look at nominees including Paul Atkins, Brian Quintenz, and Jonathan Gould, and understand why crypto enthusiasts are so bullish.

Trump’s recent executive order titled “Strengthening American Leadership in Financial Technology” gives preference to open, public blockchains, and opposes the US creating a Central Bank Digital Currency (CBDC). It also aims to redefine the boundaries within which crypto establishments can operate. These ideas have effectively led to a stay in lawsuits against Coinbase, Binance, and Ripple.

MiCA regulation in the European Union

The EU’s Markets in Crypto-Assets (MiCA) regulation has a robust framework that aims to promote market integrity and financial stability. MiCA was finalized in June 2023 and became applicable on December 30, 2024. It covers crypto-assets not currently regulated by existing financial services legislation, including asset-reference tokens and e-money tokens.

The European Securities and Markets Authority (ESMA) supports MiCA through ongoing public consultation on technical standards. These standards require crypto-asset service providers to be transparent and make full disclosure on transactions. Also, ESMA has published a series of Regulatory Technical Standards (RTS) to handle complaints and guide crypto operations.
Recently, seven final RTS have entered into the Official Journal of the European Union and become active from March 5, 2025.

These standards cover approval of white papers, crypto service audits, and stipulations for crypto operations to liaise with financial authorities.

STABLE Act

The Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act is a proposal that aims to regulate stablecoins. Stablecoins are digital currencies pegged to a stable value, like the US dollar. If passed, this law will require stablecoin issuers to get a banking license, just like traditional banks. This ensures they follow strict rules to keep your money safe.

Also, issuers must keep a 1:1 ratio to cash, central bank reserves, or short-term treasury bills, and anyone who desires to maintain custodial services for payment stablecoins is subject to the supervision of the Office of the Comptroller of Currency(OCC). By regulating stablecoins, the law aims to build digital alternatives to the US dollar and maintain trust in the financial system.

The GENIUS Act

The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, introduced by Senator Bill Hagerty, provides a clear regulatory framework for payment of stablecoins in the United States. This proposed legislation outlines requirements for the issuance of US dollar-pegged crypto tokens.

Some key provisions of the GENIUS Act include:

• Payment Stablecoin Issuers: The bill identifies three types of permitted issuers: subsidiaries of insured depository institutions, federal nonbank payment stablecoin issuers, and state payment stablecoin issuers.
• Bank-like Regulation: The GENIUS Act establishes bank-like regulation and supervision for all permitted payment stablecoin issuers.
• State-Level Regulatory: The bill allows payment stablecoin issuers to opt out of the federal regulatory framework and into a state-level regulatory regime, provided the issuer has a market capitalization of $10 billion or less.
• Priority in Insolvency: payment stablecoin holders would be given priority over all other claims against a payment stablecoin issuer in an insolvency proceeding.

The GENIUS Act is a bold step towards providing clarity and regulatory stability for the stablecoin market in the US. As one of the crypto regulatory updates, it aims to promote innovation, and protect consumers.

U.S AML Policy

In the U.S., anti-money laundering (AML) regulations for cryptocurrencies have become stricter. The AML Act of 2020 significantly expanded AML requirements, mandating that cryptocurrency exchanges and other Virtual Asset Service Providers (VASPs) register with the Financial Crimes Enforcement Network (FinCEN) and adhere to Bank Secrecy Act (BSA) regulations. This includes implementing robust AML programs that monitor transactions, report suspicious activity, and conduct customer due diligence.

The new crypto regulatory updates aim to enhance compliance. In that regard, crypto businesses must also implement Know Your Customer (KYC) protocols to verify customer identities. The Travel Rule, inspired by the Financial Action Task Force (FATF), requires VASPs to share customer data for transactions that exceed 1000 dollars. This doesn’t mean transactions with lower amounts are completely spared. However, the scope of data collection increases with the amount spent.

Major events that raised the need for crypto regulation

As there’s no smoke without fire, certain events have led to the formation of these crypto regulatory updates. Here are some landmark happenings;

• FTX collapse: back in 2022, there was a high-profile collapse of the FTX exchange which exposed weaknesses in the crypto market’s regulatory framework. This led to calls for stricter regulations to prevent similar failures in the future.
• SEC’s Lawsuits Against Binance and Coinbase: major crypto exchanges, Binance and Coinbase, are facing a lawsuit from the US Securities and Exchange Commission (SEC). This has underscored the need for better regulations and a more comprehensive oversight of the industry.
• Rise of Meme Coins: The surge in popularity of meme coins, such as Dogecoin and Shiba Inu, has raised concerns about market volatility and the potential for price manipulation. Anybody can launch a token in minutes today and decide its supply and distribution.
• Bitcoin’s $100,000 Milestone: in 2024, Bitcoin hit an all time high. This record-breaking price surge brought attention to the need for regulations to address issues like tax compliance, anti-money laundering (AML), and know-your-customer (KYC) requirements.
• Gary Gensler’s Resignation: The resignation of Gary Gensler as SEC Chair and the subsequent shift in regulatory approach under the new administration has created uncertainty and underscored the need for clearer, more consistent regulations.

These events have shown that crypto needs laid down rules. Therefore, if left alone, the sector will flood with bad actors looking to exploit loopholes. So what are the effects of continued crypto regulatory updates?

Implications of the crypto regulatory updates for traders and investors

• Increased Transparency and Accountability
  Crypto regulation will require exchanges, wallets, and other service providers to implement know-your-customer (KYC) and anti-money laundering (AML) procedures. This increased transparency and accountability will help prevent illicit activities and protect investors from fraudulent schemes.
• Compliance costs translate into fee burden.
  Regulatory compliance will come at a cost for traders and investors. There will be a need for exchanges and service providers to invest in infrastructure and personnel in order to meet regulatory requirements. This may invariably lead to higher fees for users.
• Market Stability
  Regulation will help reduce market volatility by introducing stricter standards for listing and trading cryptocurrencies. This stability will be beneficial to traders and investors. How? It will reduce the risks that are incurred as a result of sudden price swings of assets.
• Improved Consumer protection
  Regulation will also introduce mechanisms to protect investors, such as dispute resolution processes and compensation schemes. This will give traders and investors greater confidence in the market and recourse in case of disputes.
• Reduced Anonymity
  Crypto regulations might reveal the people behind cryptocurrency transactions. This is because regulators will demand that exchanges and service providers collect and report user data. In order to do this, traders and investors may incur taxes to report their cryptocurrency gains and losses.

Conclusion

As more understanding about the cryptocurrency industry increased, so does it regulation. Each regulatory effort, from the EU’s MiCA to the US’s AML laws, is proof that governments worldwide are establishing frameworks to safeguard investors and prevent illicit activities. As these regulations unfold, traders can expect increased security in the industry.
Ultimately, effective crypto regulatory updates will pave the way for widespread adoption, driving growth and innovation in the crypto space. As regulators and traders navigate this new landscape, one thing is clear: the future of crypto is bright, and it’s here to stay.

For more updates, visit our WEBSITE to learn more.