YEREVAN (CoinChapter.com) — 2023 has been an eventful year for crypto. Several developments that can define the future of the industry took place. From Sam Bankman-Fried’s trial to Binance CEO Changpeng Zhao’s guilty plea and departure as the company’s CEO, all culminated in a Bitcoin (BTC) rally that relieved investors. However, there were some regulatory developments as well. Here are the top 5 crypto policy takeaways from 2023 that impacted the cryptocurrency industry.
1) Stablecoins Feel Heat From SEC
2023 was marked by a crackdown on stablecoins by the Securities and Exchange Commission (SEC) and US regulators. Amid the crackdown, the New York Department of Financial Services (NYDFS) issued a consumer alert notice on Paxos, the issuer of BUSD stablecoin, “due to several unresolved issues related to Paxos’ oversight of its relationship with Binance.”
As part of its crypto policy, the crackdown came following claims filed by Circle, Binance’s rival, suggesting that the stablecoin’s supply is not 100% backed by the US dollar. Subsequently, the SEC also filed a Wells Notice. As a result, Paxos discontinued the issuance of BUSD.
Last month, reports emerged suggesting that Paxos had received the initial greenlight to issue a USD-backed stablecoin in Singapore.
2) Strict Crypto Policy Measures in US Congress
A string of unfriendly measures from US Lawmakers were instrumental in spreading FUD among investors. Amid the growing mass adoption and crypto regulations, some Senators and Representatives sharpened their teeth against the industry.
Recently, Senator Elizabeth Warren received support from other colleagues for her regressive Digital Asset Anti-Money Laundering Act. According to her, the bill will assist in “cracking down on crypto’s illicit use.” In a major victory for the anti-crypto group, the measure received support from all Senate Banking, Housing, and Urban Affairs Committee members, which also backed the bill.
If passed, the provisions of the Bank Secrecy Act will become applicable to all blockchain transactions.
Similar actions by the Lower House further complicated things. In July, the House Financial Services Committee passed the Financial Technology Protection Act of 2023 as part of its strict crypto policy measures.
3) Crackdown on Crypto Exchanges
This year, cryptocurrency exchanges faced the wrath of US regulators. In March 2023, the SEC issued a Wells notice to Coinbase (COIN), the country’s largest exchange.
Subsequently, in June, the SEC sued the exchange for violating its securities law by offing SOL, ADA, MATIC, FIL, SAND, AXS, CHZ, FLOW, ICP, NEAR, VGX, DASH, and NEXO, which it categorized as securities. Moreover, the Gary Gensler-led regulatory body alleged the exchange failed to register with it as a broker.
Around the same time, the SEC sued Binance and its then chief executive, Changpeng “CZ” Zhao, for “violating US securities laws.” The lawsuit sent the BNB token tanking.
Before the year could end, Gensler went after Kraken, another large crypto exchange. This subsequent display of his strict crypto policy was another example of his regulatory overreach.
4) Staking Gets SEC Frown
One of the regulatory highlights of 2023 came when the US Securities and Exchange Commission hyped its scrutiny on staking activities.
As a result, Kraken was forced to abandon its US staking program after reaching a $30 million settlement with regulators.
This move, an example of the SEC’s strict crypto policy, prompted the industry to reassess compliance strategies.
5) Some Crypto Policy From Europe
Outside of the US, the crypto industry also saw regulatory policy coming from Europe. For example, the EU’s Markets in Crypto Assets (MiCA) regulation, which will come into effect on Dec. 30, 2024,
emerged as a comprehensive piece of legislation impacting the sector.
Moreover, the UK government indicated its plans to regulate the industry.
“I am very pleased to present these final proposals for crypto asset regulation in the UK on behalf of the Government. I look forward to our continued work with the sector in making our vision a reality for the UK as a global hub for crypto asset technology,”
Andrew Griffith, the country’s financial services minister, said in October.
However, earlier this month, authorities announced their plans to turn the country into a crypto hub.
With several crypto policy measures already in place, investors will look forward to a clearer regulatory landscape in 2024.