In a research report published on 8 January, blockchain analytics firm TRM Labs revealed Crypto regulations that nearly 80% of jurisdictions worldwide have taken steps to tighten regulation in the crypto space. Almost half of these jurisdictions have specifically developed initiatives for improved consumer protection.
Although different jurisdictions prioritise different national targets, analysts at TRM Labs found that crypto exchanges operating in countries with established licensing and oversight structures "exhibit lower rates of illegal activity than those in less regulated jurisdictions."
Despite the lack of a comprehensive regulatory framework for cryptocurrencies in the US, TRM Labs expects crucial rulings from federal courts in 2024 on whether specific crypto assets can be considered securities. The following was reported:
"We can also expect enforcement opportunities to continue to increase Crypto regulations, especially against mixers and other tools that enhance anonymity."
Analysts acknowledge uncertainties within the decentralised financial space, particularly with regard to issues of responsibility, accountability and the practical exercise of oversight and authority by regulators. While definitive answers to these questions may not appear in 2024, TRM Labs says the year should be expected as a time of "implementation and standard setting in the next, hopefully less turbulent, chapter of digital assets."
US regulators' current position on crypto remains uncertain, as their previous signals suggested that existing financial laws still apply to digital assets. In December 2023, the US Securities and Exchange Commission (SEC) declared its rejection of Coinbase's Regulatory Request, citing three reasons: existing laws already apply to crypto securities markets, the SEC handles crypto securities markets through regulation and the need to preserve the Commission's discretion in setting regulatory priorities.
Nonetheless, Coinbase's legal director Paul Grewal said the company would still try to get the SEC to abandon its duty to set crypto regulatory standards through another appeal process.