Regulators should put crypto on notice—but with precision, not blanket crackdowns. The case is strongest around stablecoin resilience and reserves, market-abuse controls, truthful marketing, custody and operational risk, and AML/CTF enforcement where global gaps persist. Meanwhile, mainstream adoption via spot Bitcoin and Ether ETFs, plus comprehensive regimes like the EU’s MiCA and Dubai’s updated rulebooks, show how clear guardrails can expand access without encouraging risk.
What has changed since 2024: the regulatory baseline
ETFs brought crypto into retail and retirement accounts at scale. The U.S. SEC approved spot Bitcoin ETPs on January 10, 2024, followed by spot Ether ETFs going effective for trading in July 2024. Hong Kong listed Asia’s first spot Bitcoin and Ether ETFs on April 30, 2024, using in-kind features. These moves increased market breadth—and with it, the need for robust conduct, disclosure, and safekeeping standards.
Europe’s MiCA is now live, with a long tail of compliance
The EU’s MiCA regime applied to stablecoins from June 30, 2024 and to crypto-asset service providers from December 30, 2024; transitional “grandfathering” can extend to July 1, 2026 for firms previously authorized under national law. Early supervisory work and consultations continue as ESMA/EBA calibrate Level 2/3 details. For global firms, this means authorization planning and product re-papering are no longer optional.
The United Kingdom tightened retail promotions
Since October 2023 the FCA has required prominent risk warnings, banned “refer-a-friend” bonuses, and imposed a 24-hour cooling-off period for first-time crypto investors—rules it has been actively supervising through 2024. These are classic consumer-protection tools that other markets can emulate.
Asia’s rulemaking: licensing and stablecoins
Hong Kong operates a licensing regime for virtual-asset trading platforms and has continued to refine supervision; it also enabled spot crypto ETFs in 2024. Singapore finalized a stablecoin framework in August 2023 requiring high-quality reserves, redemption at par within five business days, and strong disclosure—an example of targeted policy for payment-like tokens. Dubai’s VARA updated its activity rulebooks in May–June 2025, tightening market-abuse, reporting and issuance standards with near-term compliance deadlines.
The United States: from enforcement to legislation
Beyond ETFs, Congress advanced federal crypto law in 2025. The Senate passed the GENIUS Act to regulate payment stablecoins; in July 2025, the House cleared a counterpart stablecoin bill and a broader market-structure bill. If enacted, the U.S. will move from patchwork enforcement toward statute-based oversight for stablecoins and trading venues.
The risk picture regulators are reacting to
Global AML/CTF implementation still lags: FATF reports show many jurisdictions have yet to fully implement or enforce the Travel Rule for virtual assets. On market integrity and cyber risk, 2025 saw record thefts driven by large exchange breaches and state-sponsored actors, even as some illicit flows declined overall. Stability concerns around stablecoins remain a supervisory focus for BIS and central banks.
Should regulators “go hard”? A balanced test
Where tougher rules are justified
Stablecoins used as quasi-money require reserve transparency, liquidity and clear redemption rights to avoid run dynamics. Global AML/CTF, sanctions compliance and Travel Rule enforcement need sharper teeth. Supervisors should also push for real-time market-abuse controls, custody segregation, operational resilience (DORA-style), and truthful retail promotions.
Where proportionality matters
Open-source software, developer tools, and low-risk utility tokens should avoid bank-level obligations. Over-broad bans can push activity offshore or into less transparent channels, undermining the very objectives regulators seek. MiCA’s phased timelines and authorization pathways, and the FCA’s tailored promotions regime, illustrate proportionate approaches.
What “put on notice” looks like in practice
Stablecoin rulebook
Mandate high-quality, short-duration reserves held with supervised custodians; daily disclosure and monthly attestations; hard T+0/T+5 redemption rights; recovery/wind-down plans; and perimeter clarity for non-payment tokens. The EU, Singapore and pending U.S. bills are converging here.
Trading venue integrity
License exchanges with fit-and-proper tests, token-listing due diligence, surveillance for wash trading and manipulation, segregation of client assets, and incident reporting. Hong Kong’s VATP regime and Dubai’s updated rulebooks provide detailed playbooks.
Consumer communications
Require prominent risk warnings, appropriateness checks for complex products, and cooling-off for first-time buyers; ban refer-a-friend bonuses and misleading yield claims. The FCA model is tested and ready to copy.
AML/CTF enforcement
Close Travel Rule gaps, supervise cross-border VASPs, and coordinate with analytics providers. FATF’s 2024–2025 updates show where enforcement still falls short.
Signals that rules can grow responsible adoption
Institutional wrappers like spot ETFs expand access while plugging into securities-market surveillance and disclosure. In parallel, MiCA’s full application and Dubai’s updates demonstrate that clear, comprehensive regimes can coexist with innovation—reducing regulatory arbitrage without throttling real use cases.
Operator checklist for 2025–2026
Map your perimeter
Identify whether you’re an issuer, CASP/VASP, or service provider under MiCA, FCA, VARA, MAS, or pending U.S. law; plan authorizations and grandfathering to July 1, 2026 where eligible.
Stabilize your stablecoin exposure
If you issue or integrate stablecoins, align reserves, disclosures, and redemption mechanics with EU/MAS standards and track U.S. GENIUS/STABLE negotiations.
Upgrade conduct and custody controls
Adopt market-abuse surveillance, strict token-listing due diligence, cold/hot wallet segregation, and tested incident response consistent with Hong Kong/Dubai expectations.
Close AML/CTF gaps
Implement Travel Rule messaging, sanctions screening, and case management; document cross-border policies where counterparties sit in partial-implementation jurisdictions.
FAQs
Is crypto already “regulated” enough?
In major markets, yes for some activities (ETFs, promotions, MiCA licensing), but no for others: Travel Rule enforcement remains inconsistent, and stablecoin guardrails are still being finalized in the U.S.
Why focus so much on stablecoins?
They behave like money for many users. Central banks and BIS flag run and spillover risks; frameworks now stress high-quality reserves and fast redemption to prevent disorderly unwinds.
Won’t tough rules push activity offshore?
Experience suggests clear rules attract compliant capital while enforcement deters illicit flows. Jurisdictions with transparent regimes (EU, HK, Dubai, Singapore) are drawing licensed activity onshore.
