Crypto Regulation (and De-Regulation) in the U.S. and E.U. and the Effects of Each on Consumer Protection and Illicit Transactions

Authors

Bella Alonzo, Southern Methodist University, Dedman School of Law

Abstract

The United States and the European Union face a wide disparity in regulation tactics for cryptocurrencies. With the recent rollout of the world’s first comprehensive crypto-asset regulation framework, the EU’s Markets in Crypto Assets Regulation (MiCA) has further exacerbated incongruities with the U.S.’s comparatively hands-off, scattered regulation strategy. The lack of uniform market regulation not only challenges compliance efforts, but it leaves critical gaps that have proved harmful for investors and opportune for criminals. Prioritizing international regulatory harmonization could result in continued growth of digital assets and a safer, more stable global crypto market, but the path forward is tense as critics argue that increased regulation will suppress the technological and financial innovation that made digital currencies possible. Harnessing a decentralized and ever evolving asset class without stifling the technology’s growth potential requires a well-informed and finely tailored approach that has stumped regulators across the globe. But the emergence of the crypto space provides a novel opportunity for lawmakers to balance risk mitigation with the capacity for creativity and development. As the crypto field continues to expand, this paper contemplates the effects of different regulation strategies and suggests that powerful players in the global digital assets market establish unified regulatory frameworks that protect investors and sanction financial crimes while providing adequate flexibility and institutional support.

Recommended Citation

Bella Alonzo, Case Note, Crypto Regulation (and De-Regulation) in the U.S. and E.U. and the Effects of Each on Consumer Protection and Illicit Transactions, ILRA Student Forum (2024)