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Central bank and regulatory bodies all around the world have a varying view on the legality of cryptocurrencies. From a strict declaration of illegal, to accepting it in forms of tax returns, the global rulings are polarized.

Cryptocurrency regulations for 2021

Why Difference of Opinion?

Cryptocurrencies are often referred to as a disruptive economic and financial system. This is because the vision of Satoshi Nakamoto, creator of Bitcoin, and subsequent financial models created by crypto enthusiasts, largely ignores the centuries-long system devised by professionals for managing finances and economics.

The current rules and laws are inadequate to cater for cryptocurrencies. Tokens that are offered by blockchain platforms can occasionally come under the securities regulations, even if they are declared as utility ones. Governments are only now starting to react and either declaring different cryptos as compliant, illegally distributed, or totally illegal from the start.

Case Study: XRP

Ripple (XRP) is a token created by Ripple, a crypto platform that designed a blockchain based inter-bank transactional system that rivals SWIFT. XRP was offered to large investors and the RippleNet is already being used bay large banks for inter-bank transactions.

SEC had declared in 2017 that companies and firms that raise funds through offerings of crypto tokens is equivalent to offering securities or shares. Since then, there has been a lot of debate whether XRP falls under the category of securities or not. SEC decided after three years that XRP is a security and last month brought a lawsuit, claiming the token to be unregistered security.

Ripple XRP

Photo credit: Miloslav Hamřík / Pixabay

The lawsuit sees Christian Larsen, the co-founder and former CEO Bradly Garlinghouse being sued for raising over $1.3 billion through offering XRP tokens to US and global investors. Director of Enforcement Division of SEC, Stephanie Avakian explained,

“We allege that Ripple, Larsen, and Garlinghouse failed to register their ongoing offer and sale of billions of XRP to retail investors, which deprived potential purchasers of adequate disclosures about XRP and Ripple’s business and other important long-standing protections that are fundamental to our robust public market system.”

XRP, the third largest cryptocurrency has seen a massive fall in value since then. Many crypto exchanges that offer their services in the US have also delisted the asset in anticipation of compliance.

Global Cryptocurrency Regulations: 2023 Edition

  1. General Trends: The global cryptocurrency market has been growing rapidly, with its value significantly increasing. This growth has prompted governments and regulatory bodies worldwide to pay more attention to the sector, formulating rules, policies, and regulations to curb fraudulent activities while fostering blockchain and digital asset innovation (source.)
  2. Regulatory Focus: The primary focus of global regulators has been on anti-money laundering (AML) measures, counter-terrorist financing (CTF), and ensuring the security and stability of financial systems. There’s an increasing trend towards establishing clear regulatory frameworks to govern the operations of cryptocurrencies and related services (source.)
  3. Country-Specific Developments: Different countries have taken varied approaches to crypto regulation. For instance, Nigeria, one of the most crypto-curious nations, has seen its Securities and Exchange Commission publish comprehensive rules on digital assets, indicating a move towards a more regulated crypto environment (source.)

U.S. Cryptocurrency Regulations: 2023 Edition

  1. SEC’s Active Role: The U.S. Securities and Exchange Commission (SEC) has been particularly active in regulating the crypto space. The SEC’s approach has been to treat many cryptocurrencies as securities, thereby subjecting them to existing securities laws. This has led to several high-profile enforcement actions and legal battles.
  2. Focus on Investor Protection: U.S. regulators have emphasized protecting investors from fraud and ensuring transparency in crypto transactions. This includes efforts to crack down on unregistered securities offerings disguised as ICOs (Initial Coin Offerings) and scrutinizing crypto exchanges.
  3. Regulatory Clarity and Legislation: There has been a push for more clarity in U.S. crypto regulations. Lawmakers and industry stakeholders are advocating for specific legislation that addresses the unique aspects of cryptocurrencies and blockchain technology, rather than fitting them into existing financial regulatory frameworks.
  4. Impact of High-Profile Cases: Legal actions and settlements, such as those involving Binance and other major players in the crypto industry, have had a significant impact on the regulatory landscape in the U.S., setting precedents and shaping future regulatory actions.


It is very clear that regulatory bodies across the world are still struggling to create rules to regulate crypto assets. Two key issues exist, which if left unaddressed, will create more friction between the industry and agencies:

  • Updating Laws: Current laws and acts are very outdated for such as modern and technology based economic system. Most of the laws base their existence to centuries old systems. Attempts at integrating updated rules with traditional ones is also not that effective. A whole new set of regulations need to be developed which regulate, but don’t throttle the use of cryptocurrencies.
  • Understanding Crypto by Leaders: The heads of regulatory bodies have little understanding of the benefits offered by cryptocurrencies which have driven the adoption of the digital assets. People in key positions with little to know understanding will mostly drive policies that in contrast with cryptos and create distance between governments and the industry.

If strict regulations are passed, it will certainly have a very big impact on the crypto industry, with many platforms either shutting down or moving to crypto friendly jurisdictions. However, the way blockchain is designed, it would be very interesting to see how these regulations will impact in the long run as many cryptocurrencies are designed to be censorship resistant and the decentralized nature makes it impossible to stop them.

About The Author


Owner of Since 2013, he's been immersed in the world of cryptocurrencies and has become an avid NFT collector since 2019. Also an NFT artist, he is a lifelong learner of mixed-media artwork creation.