The State of Crypto: What to Watch in the World of Crypto Regulations in 2022

In the final edition of the State of Crypto newsletter for the year, the policy team discusses their focus on crypto regulations. With the upcoming year expected to be busy for the cryptocurrency industry, the team highlights the importance of staying informed about the regulatory landscape. While the market is experiencing a resurgence and there are positive developments such as the potential approval of a spot bitcoin exchange-traded fund, lawmakers and regulators are unlikely to reduce their attention on crypto issues.

Nikhilesh De, a member of the policy team, shares his interest in five main categories of events or activities that may unfold in the coming year: court cases, elections, regulatory agency actions, legislation, and the broader crypto market.

Starting with court cases, De mentions the active year the U.S. Securities and Exchange Commission (SEC) has had, with lawsuits against major crypto exchanges such as Coinbase, Kraken, and Binance US. While the case against Ripple is ongoing, De expects to see how the courts view the arguments being made. The Commodity Futures Trading Commission (CFTC) will also play a significant role, with Chair Rostin Behnam expressing pride in the enforcement actions taken by the agency. De anticipates continued enforcement actions from the CFTC in the coming year.

In addition to regulatory cases, De highlights national security and criminal cases that will raise legal questions for the crypto industry. Notably, the sentencing hearings of Sam Bankman-Fried, the former CEO of FTX, and Changpeng Zhao, the CEO of Binance, are scheduled for the first half of the new year. Bankman-Fried faces a potentially lengthy sentence after being convicted on seven charges, while Zhao pleaded guilty to violating the Bank Secrecy Act. The outcomes of these cases will have implications for the crypto industry.

De also mentions upcoming trials involving Avi Eisenberg and Roman Storm. Eisenberg is accused of commodities manipulation and fraud, while Storm faces charges related to his work on a crypto mixing service. These cases will provide insights into legal theories surrounding the crypto industry.

Moving on to elections, the policy team will closely monitor and report on elections in the U.S., European Union, India, Indonesia, and possibly the UK. While explicit positions on cryptocurrency issues may not be a focus for the candidates, the department or ministry heads they appoint and the laws they push for will impact the crypto sector.

Overall, the policy team emphasizes the importance of staying informed about crypto regulations in the coming year. With a busy year ahead, it is crucial for industry participants to understand the legal landscape and its potential impact on the market.