How the regulatory landscape for cryptocurrency has evolved over time and what it means for the future of the industry.
Crypto law is constantly evolving, and it is important for businesses and individuals alike to stay up to date on the latest developments to avoid legal trouble. With the emergence of blockchain law firms and increasingly complex regulations, you might ask: Why do I even need a crypto lawyer?
Looking deeper into the development of the regulations around crypto can help businesses and investors use cryptocurrency and blockchain technology in a compliant and legal manner. Understanding crypto law can also help us better understand the industry and its potential implications for the future.
The world of cryptocurrency and blockchain technology has grown exponentially in recent years, and with it, the need for a legal framework to govern it. Crypto law, or the regulations and legal implications related to blockchain technology, is still relatively new and evolving, but there are some key points in its history that are worth exploring.
The first regulation of cryptocurrency emerged in 2009, when the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued guidance on the use of virtual currencies and blockchain litigation. This document outlined how companies and individuals working with and owning cryptocurrencies must register with FinCEN and comply with anti-money laundering regulations. Since then, other countries have followed suit, creating and refining their own laws and regulations related to cryptocurrency and the growing concerns surrounding it.
In 2014, the U.S. Internal Revenue Service (IRS) issued guidance on how to treat virtual currency for tax purposes. This also might have been the first instance where the profession of a crypto tax attorney emerged as a result. The IRS declared that virtual currency is treated as property and should be taxed as such. Since then, many countries have adopted similar regulations, though the specifics vary from region to region.
The next major milestone in crypto law history was the launch of the European Union’s Fourth Anti-Money Laundering Directive in 2017. This directive requires cryptocurrency exchanges to comply with anti-money laundering regulations, including customer due diligence and record-keeping. It also requires EU Member States to create national registers of cryptocurrency holders, adding a layer of complexity for individuals, blockchain companies, and crypto law firms.
One of the most recent developments in crypto law was the release of the “Crypto Assets Regulation” by the European Commission in 2018. It seeks to bring clarity and consistency to the regulation of crypto assets across the EU. It requires exchanges to register with their local regulator and comply with anti-money laundering and KYC regulations.
In October, the European Union made a significant step towards regulating the cryptocurrency legal landscape with the approval of the Markets in Crypto-Assets (MiCA) bill. This bill categorizes crypto assets and brings them under the oversight of the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA).
These are just some of the key points in the history of crypto law. As the cryptocurrency and blockchain industry continues to grow, so too will the need for a legal framework to govern it.
The current climate in cryptocurrency law is one of rapid development and evolution. As the industry continues to grow and expand, governments around the world are continuing to develop laws and regulations to keep up with the changing landscape.
Many countries have implemented their own regulations for cryptocurrency exchanges and wallets: some follow the pattern of what we described above, some outright ban the use of crypto, and others take an entirely different approach that is impossible to navigate without the help of a crypto lawyer. At the same time, lawmakers are also looking at ways to make digital assets more accessible to investors and more attractive to companies looking to use them as a payment method.
Navigating cryptocurrency law can be challenging, as the laws and regulations related to the industry are constantly evolving. The first step is to ensure you are familiar with the applicable laws and regulations in your region and industry.
Additionally, it is important to stay up to date on the latest developments in the industry. Finally, it is wise to consult with lawyers specializing in cryptocurrency if you have any questions or need advice on how to proceed with your particular issue.
Crypto law is a complex and ever-evolving landscape, but with the right knowledge and resources, it can be navigated successfully. While it can be difficult to keep up with the latest developments in the industry, there are resources available to help.
At VILP Solutions, we specialize in cryptocurrency law and are committed to helping businesses and individuals stay compliant with applicable laws and regulations. We provide advice and guidance to help you navigate the landscape of crypto law.