The 2026 policy question in context
Crypto is now plugged into mainstream finance: the U.S. approved spot Bitcoin ETFs in January 2024 and spot Ether ETFs in July 2024, while Hong Kong listed Asia’s first spot Bitcoin and Ether ETFs in April 2024. In parallel, the EU’s MiCA regulation began applying in phases from 2024, creating a harmonised single-market rulebook. These shifts raised the stakes for investor protection, market integrity and cross-border AML standards.
The case for putting crypto “on notice”
Illicit finance and platform hacks remain material. Chainalysis estimates illicit addresses received roughly $40.9 billion in 2024 and reports more than $2.17 billion stolen by mid-2025, including a record service hack—evidence that enforcement and security need continued tightening.
Global standard-setters warn about stablecoin and DeFi risks. FATF’s 2024–2025 updates urge full implementation of AML/CFT rules for virtual assets and VASPs, highlighting gaps around stablecoins, DeFi, NFTs and unhosted wallets. BIS research flags run risks and financial-stability concerns if stablecoins scale without robust safeguards.
National consumer rules are also tightening where retail exposure is high. The UK now requires clear risk warnings and a 24-hour cooling-off period for first-time crypto investors under its financial promotions regime.
The case against blanket crackdowns
A blunt approach can push activity offshore and forgo the benefits of transparent, auditable ledgers. The IMF and FSB advocate comprehensive, risk-based frameworks that safeguard stability and integrity while allowing innovation to operate within clear rules. In practice, that means proportionate standards for disclosures, custody, capital, governance and market abuse—coordinated across borders.
What “good” crypto regulation looks like in 2025–2026
EU: a single market under MiCA
MiCA’s stablecoin provisions have applied since 30 June 2024, with the rest of the framework for crypto-asset service providers applying from 30 December 2024. Transitional “grandfathering” lets existing firms operate under national law up to 1 July 2026 or until MiCA authorisation is decided. This turns 27 markets into one passportable regime.
UK: marketing safeguards for retail
The FCA’s crypto promotions rules ban “refer-a-friend” incentives and require prominent risk warnings plus a 24-hour cooling-off period for first-time investors—aimed at fair, clear and not-misleading communications.
U.S.: mainstream access via regulated ETFs
The SEC’s approvals of spot Bitcoin and Ether ETFs opened supervised, exchange-listed exposure paths—bringing crypto under securities-market surveillance and disclosures while leaving underlying networks permissionless.
Hong Kong: licensed venues and spot ETFs
Hong Kong’s SFC now licenses trading platforms for retail access and authorised the first batch of spot Bitcoin and Ether ETFs listed on the SEHK in April 2024, signalling a regulated gateway for Asian investors.
Singapore: bank-grade rules for stablecoins and DPTs
MAS has finalised a stablecoin framework for single-currency stablecoins and is phasing in consumer-protection and custody requirements for digital-payment-token service providers from mid-2024, including safekeeping of customer assets.
UAE (Dubai): activity-based rulebooks with 2025 updates
Dubai’s VARA operates a full activity-based regime. Updated rulebooks effective June 2025 strengthen issuance, market conduct, and compliance expectations—part of a prescriptive framework for brokers, exchanges and custodians.
Should regulators put crypto on notice?
Yes—targeted, risk-based oversight is warranted, and the direction of travel is clear. The most credible path is not a blanket crackdown but tighter, enforceable rules on where harms concentrate: stablecoins, custody, marketing to retail, market manipulation/abuse, and AML/CFT across centralised and decentralised venues. At the same time, regulators should preserve on-ramps that channel activity into supervised rails, as seen with ETF access and licensing regimes. This combination mitigates systemic and consumer risks while allowing responsible innovation to compete in the open.
A practical compliance checklist for 2026 builders
Governance and disclosures
Publish clear risk factors, token issuance details, and reserve attestations where applicable. Map operations to MiCA, FCA, MAS, VARA or relevant local regimes and keep a living compliance matrix aligned to license scope.
Custody and asset segregation
Implement formal segregation of customer assets, independent key management, and incident response playbooks aligned to local custody rules.
Market integrity
Adopt surveillance for wash trading, pump-and-dump patterns, and manipulation; document kill-switch and trading-halt criteria consistent with exchange and ETF surveillance norms.
Stablecoin risk management
Maintain high-quality, liquid reserves, daily reconciliation, and credible redemption processes; stress-test for runs and disclose methodologies regularly given BIS-identified run dynamics.
AML/CFT by design
Screen counterparties, implement Travel Rule data exchange where required, and extend risk controls to DeFi interfaces and unhosted-wallet flows as FATF expects.
Frequently asked questions
Will stricter rules kill innovation?
Evidence from MiCA, UK promotions rules, U.S. and Hong Kong ETFs, and Singapore/UAE frameworks suggests that clear guardrails can coexist with capital-market access and product growth—provided rules are proportionate and enforceable.
What areas are likely to see the next wave of enforcement?
Stablecoin reserve quality and disclosures, custody/segregation lapses, misleading promotions, market manipulation, and AML gaps—especially around DeFi front-ends and cross-border flows—are priority themes in recent guidance and reports.
