—TechRound does not recommend or endorse any financial, investment, trading or crypto advice or practices. All articles are purely informational—
Cryptocurrency regulation brings mixed feelings to traders; while many are okay with some form of governmental control over the industry, many prefer to trade and use crypto freely.
Crypto regulation has become an important topic at various levels and has evolved to meet dynamic demands. Three leading crypto markets, the United States, the United Kingdom, and the European Union, have some form of regulation guiding crypto, all of which need to be considered before investing or starting a relevant business.
Growth of the Crypto Industry
The launch of Bitcoin in 2009 opened up new possibilities for finance, and within two decades, the crypto market has become one of the most important markets globally. The demand for crypto trading, payments, and digital assets is increasing. While this creates opportunities for many, regulators need to address potential challenges, including loss of private data and funds.
From mere projections about digital applications, we now see crypto and blockchain technology in finance, healthcare, manufacturing, and supply chain management. However, these numbers are not random; the crypto market is set to cross $45.3 billion in revenue by 2025 based on a CAGR of 11.1% between 2021 and 2028, according to Statista.
Expectedly, regulatory clarity is a crucial point of interest in the crypto market. Regulations have evolved over the years to address issues such as energy consumption in mining and privacy and anonymity features that bypass anti-money laundering laws. Where countries like China have banned crypto, the United States, the United Kingdom and the European Union are embracing the benefits and designing guidelines for the industry.
Crypto Regulation in The US
The US is a leading crypto market and one of the most critical guides regarding regulation. The US has a mixed disposition towards crypto regulation, using a federal approach and allowing states to set their crypto laws.
As of 2025, there is no defined regulation at the federal level, but the House of Representatives introduced the yet-to-be-enacted Financial Innovation and Technology for the 21st Century Act (or FIT21) in 2024.
The US Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Internal Revenue Service (IRS) are crucial agencies in the crypto regulation discussions.
While the SEC and IRS classify digital assets, including Bitcoin, as personal property, the CFTC is more concerned with regulating crypto derivatives and commodity trading. The US will also regulate stablecoins through the STABLE and GENIUS Act.
The government has a pro-crypto stance and established a Strategic Bitcoin Reserve and US Digital Asset Stockpile in 2025.
Crypto Regulations in The UK
The UK has a thriving fintech industry, and the increasing number of crypto-related businesses has expanded the use of cryptocurrencies in the country.
The UK Financial Conduct Authority (FCA) implements various measures to oversee the crypto industry, dividing digital assets into three categories: exchange tokens, security tokens, and utility tokens.
The UK introduced two key regulations over the last five years: the Fifth Anti-Money Laundering Directive (AMLD5) in 2020 and the Financial Services Act 2021. The FCA also requires companies to comply with Anti-Money Laundering (AML) and Know-Your-Customer (KYC) laws. These laws require businesses that create and supply products and services in the crypto industry to verify customers’ identities and report suspicious transactions.
The UK government proposes more regulatory changes to improve market conditions and protect consumers. These include stablecoin regulation, crypto asset promotion regulations, and international partners’ collaboration to develop global standards. Regulating crypto asset promotion requires businesses offering crypto products to provide clear risk warnings and fee disclosure.
Crypto Regulation in The EU
In the EU, the demand for crypto is driven by decentralisation, security, transparency, enhanced infrastructure and scalability at different levels. Surprisingly, regulations are also driving the adoption of crypto in the EU. The enhanced security measures and safety protocols give investors confidence in exploring crypto for payments, trading, and hedging against inflation.
The EU’s approach to crypto regulation is harmonised, despite allowing member states to implement their own rules. All EU countries must document the identities and addresses of digital asset owners in addition to their country-specific regulations.
The EU also has several frameworks in place, including the Markets in Crypto-Assets Regulation (MiCA), Fifth Anti-Money Laundering Directive (AMLD5), and the European Securities and Markets Authority (ESMA) guidelines.
Differences in Crypto Regulation Between The US, UK and EU
Their approach to crypto regulation is the significant difference between the three largest crypto markets. In the US, for instance, the SEC classifies crypto as personal property, and thus, it is subject to the capital gains tax rate.
The EU has similar rules, but member states set their capital gains tax rates and do not use a single rate. The UK is aligning its crypto regulations with the US and may release new rules soon. For AML regulations, starting in 2027, the EU will ban anonymous crypto accounts and privacy coins. This is a strategic move that other regulators may consider if it succeeds in Europe.
Regulations constantly evolve to meet new technologies and protect consumers from rapidly advancing challenges. Although frameworks remain unchanged, more regulations will address issues such as AI in crypto, security threats, and privacy concerns. Some rules will also address the issuance of tokens for next-generation crypto applications as governments seek greater control of new technologies.
—TechRound does not recommend or endorse any financial, investment, trading or crypto advice or practices. All articles are purely informational—
