Hello everyone, I am Paul from Crypto Weird Talk, currently sharing my insights from years in the crypto space on Binance's official platform. If you find my insights helpful, please consider following me.

In the past decade, cryptocurrencies have been in a 'gray area'. Initially, most countries turned a blind eye, but as the market size grew and cases of fraud, money laundering, and exit scams became frequent, governments started to realize: if left unchecked, it’s a financial time bomb.

Thus, since 2020, we have seen:

  • The U.S. SEC, CFTC, and FinCEN have successively introduced new regulations;

  • The EU has launched MiCA (Regulation on Markets in Crypto-Assets);

  • China has directly banned exchanges and OTC;

  • Japan, Singapore, and Hong Kong have chosen 'compliance pilots' to develop within a regulatory framework.

Currently, by 2025, crypto assets are no longer viewed as a gray market but as part of the financial system. Global legislation is accelerating, and in December 2024, MiCA (Regulation on Markets in Crypto-Assets) will be officially implemented across the EU, comprehensively covering stablecoins and exchange regulations. Through legislation like the GENIUS Act, clear regulatory standards will be established for stablecoins, requiring one coin one reserve, regular audits, and transparent compliance; at the same time, the 'Crypto Task Force' will promote industry regulation, and Hong Kong will launch (Stablecoin Regulations) in 2025, expected to issue the first batch of issuance licenses in 2026. This all indicates that the global trend is towards regulating the crypto industry.

Why is regulation tightening?

1. Anti-money laundering and counter-terrorism financing (AML/CFT)

  • Cryptocurrency has strong anonymity, making it easy to be used for cross-border transfers and money laundering.

  • The police often say: 'Once funds are converted to USDT and transferred on-chain, recovery is basically hopeless.'

  • What financial regulators fear most is: illicit activities circumventing the banking system through cryptocurrencies.

2. Prevent financial risks and maintain monetary sovereignty

  • Stablecoins (like USDT, USDC) are essentially pegged to the dollar.

  • If global funds flow largely through stablecoins, it could weaken a country's central bank's control over the monetary system.

  • Some countries even worry that capital may flee en masse through USDT.

3. Protect ordinary investors

  • Frequent explosive events: LUNA plummeted, hundreds of billions evaporated; FTX exchange collapsed, millions of users' assets lost; various fraudulent schemes are deceiving under the guise of 'crypto'.

  • To avoid more people going 'bankrupt', the government must intervene.

So what does this mean for ordinary users?

  1. KYC is becoming stricter: high-frequency trading and withdrawals must be real-name and identity verified.

  2. Platforms are exiting restricted markets: for example, some platforms are placing restrictions or delisting in the EU and the UK.

  3. Increased on-chain transparency: such as CARF information sharing requirements, ordinary users have higher traceability.

  4. A safer long-term environment: though some anonymity is sacrificed, it helps the industry mature and protects investors.