How will regulation impact the crypto industry?

监管对加密货币行业将产生什么影响？

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<h2>Introduction </h2>
Over the past year, the world of digital assets has faced significant challenges as the industry experienced both all-time highs and significant lows. Just over a year ago, Bitcoin reached its peak of over US$68,000, but now it is trading under US$28,000, highlighting the market's volatility. In May 2022, the crypto market experienced a crash triggered by a sudden and prolonged fall in the prices of cryptocurrencies, resulting in an estimated loss of over US$2 trillion worth of market value and uncertainty for the distributed ledger technology industry.
While regulations were once perceived as obstacles to crypto adoption, they are now viewed as the quickest route to achieving global mainstream adoption. Regulation is necessary to safeguard consumers' financial assets and create a safer market environment overall. Not only does this foster greater confidence among those trading in the market, but it also makes the industry more appealing, leading to wider adoption of crypto services.
 Clear regulatory guidance would encourage nations to become more crypto-friendly and provide a welcoming environment for the growth of innovative companies, boosting economic growth for the host jurisdictions. Digital asset firm controllers see the value in establishing their operations in well-regulated jurisdictions, where they can trade in a secure and predictable regulatory environment with clear laws that also safeguard consumers.
Amid the current market downturn, the importance of digital asset regulation has become more apparent than ever. Several major platforms like Celsius, Voyager Digital, and FTX, have collapsed, highlighting the risks associated with trading in virtual asset markets. These collapses have resulted in billions of dollars in lost crypto assets, leaving customers locked out of their accounts or unable to withdraw funds. Due to the poorly regulated nature of the industry, past mistakes have inevitably damaged the public's perception of the crypto industry.
To regain public trust, it is necessary to establish regulations that protect people's assets from a firm's lack of appropriate corporate governance or malpractice. Effective regulatory frameworks can help rebuild the public's trust in the industry. Even though regulations cannot eliminate investment risk, they can provide investors with peace of mind that they will be treated fairly.
<h2>Developments around the world</h2>
The regulation of crypto markets is a difficult task due to the industry's early stage of development, and there are varying opinions on how it should be regulated, if at all. However, to make the everyday use of cryptocurrency the norm, regulation must be prioritized. Fortunately, there have been advances in regulation worldwide to address this issue. The widespread adoption of digital assets is expected to bring much-needed stability to an unpredictable industry.
Europe - MiCa
The European Union has approved the final legal text of the Markets in Crypto-Assets (MiCA) Regulation proposal, which is aimed at promoting technological innovation within the EU and safeguarding consumers against financial losses resulting from illegal activities. The MiCA rules will be implemented in stages, starting in 2024, and represent one of the most significant attempts by governments around the world to regulate the rapidly growing digital asset market. The EU hopes that this new law will set a global standard for other jurisdictions to follow.
One of the most significant changes to the MiCA rules is the ability to track transactions above 1,000 euros ($1,097.55) from self-hosted wallets to centralized wallets, such as those hosted on crypto exchanges. However, these rules will not apply to peer-to-peer transfers or transfers that do not involve a centralized wallet.
Regulators will oversee the issuance of stablecoins that are classified as "asset-reference and e-money tokens," as well as provide oversight of initial coin offerings to the public. The lawmakers also aim to make customers better informed of the risks, costs, and charges associated with their crypto activities. Additionally, measures will be implemented to prevent market manipulation, money laundering, and terrorist financing in the crypto industry.
UAE
The UAE has taken steps to provide clear guidance to crypto companies looking to operate in the region. The Virtual Assets Regulatory Authority (VARA) was established specifically to oversee the crypto industry, indicating the UAE's commitment to embracing Web3 technology both now and in the future. The UAE's comprehensive framework covers a wide range of assets and activities, attracting firms seeking regulatory clarity, and the strategy is proving to be effective. In addition to trading platforms and custodians, many other blockchain, Web3, NFT, and DeFi projects have established themselves in the UAE, including various metaverse projects.
In April 2023, the federal securities regulator in the UAE announced that it would start accepting applications from companies seeking to provide crypto services in the country. All virtual-asset service providers in the country, except for those licensed in the UAE's financial-free zones, are required to seek approval from the Securities and Commodities Authority (SCA). The SCA endorsed the licensing regime following the UAE Council of Ministers' decision last year to regulate the crypto sector.
Asia
After years of ambiguity, Hong Kong has finally announced it will establish a comprehensive framework for the regulation of crypto assets - with the aim to balance the freedom to experiment and innovate with consumer protection. Most notably, there will be a license available specifically designed for the regulation of crypto exchanges, which offers clear guidelines on how customer funds should be protected from external threats and internal abuse.
In addition to Hong Kong, several other countries in the region have also made progress in regulating digital assets. Japan, for example, has recently stated it will embrace Web3 and continue to refine its regulations over the years. Similarly, Singapore has been proactive in creating a supportive regulatory environment for digital assets, with the Monetary Authority of Singapore (MAS) granting licenses to several crypto exchanges and establishing guidelines for initial coin offerings (ICOs) and other crypto-related activities.
<h2>The game only works, if it has rules</h2>
To make sure everyone in the digital asset marketplace is safe, we need clear rules that everyone can follow. These rules should encourage governments, regulators, and digital asset companies to work together and help promote innovation while keeping things secure. Any place without rules yet should look to the places that are doing things right and follow their lead.

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