In Short

The Situation: Regulators worldwide have taken varying approaches to define and shape the legal and regulatory landscape for digital assets. The United States has thus far largely relied on enforcement actions within its existing regulatory framework, and it has focused its attention on cryptocurrencies. The impact of U.S. enforcement ensnares people and organizations globally.

The Result: Regulatory gaps, the spectrum of approaches taken by global regulators, and the overlapping jurisdiction of enforcement agencies create a regulatory landscape that is complex and subject to constant change. Entities that have purposefully sought to avoid U.S. jurisdiction have nonetheless been subjected to U.S. enforcement action.

Looking Ahead: As the commercial prominence of digital assets increases, regulators will pay increasing attention to them. Market participants should expect an uptick in related enforcement actions, despite regulators’ lack of clear or consistent messaging, and should glean what lessons they can from the United States’ eight-year history of cryptocurrency-related enforcement actions to avoid some of the common pitfalls.

As the global digital asset industry continues to grow, regulators worldwide have increased efforts to define and shape the legal landscape through various approaches. In the UAE, for example, the Financial Services Regulatory Authority issued guidance in 2018 on regulating cryptoasset activities in the Abu Dhabi Global Market, and…

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