Investment in crypto and digital assets is mainstream. What was once considered niche and emerging is now a core component of a modern investment strategy. With regulatory approaches around the globe both evolving and fragmented, financial services firms need a framework to navigate compliance requirements and manage employee personal trading across jurisdictions as rules continue to take shape.
Whether you’re an organization whose core business is crypto or a firm that is looking to ensure that the trading of digital assets is effectively monitored across your compliance program, MCO can help you meet quickly evolving and increasingly rigorous regulatory compliance demands.
What is a Crypto Asset?
A crypto asset is broadly defined by the European Union as "a digital representation of value or a right that can be transferred or stored electronically using distributed ledger technology or similar technology." The Financial Stability Board describes crypto-assets as "a type of private sector digital asset that depends primarily on cryptography and distributed ledger or similar technology." Cryptocurrency, one of the most established digital assets, is used as a medium of exchange on trading platforms. Well-known cryptocurrencies include Bitcoin, Ethereum, Ripple, and Litecoin.
Stablecoins are a type of digital asset generally designed to maintain a stable value relative to the U.S. dollar. Under the GENIUS Act of July 2025, "payment stablecoins" are defined as digital assets designed for use as a means of payment or settlement, where the issuer is obligated to redeem them at a fixed monetary value and represents that they will maintain a stable value. Stablecoins are currently utilized to facilitate the trading of other digital assets but are increasingly being used as a means of payment. Notable stablecoins include Tether (USDT), USD Coin (USDC), and institutional projects like JPMorgan's JPM Coin.
One of the core underpinnings of crypto is Decentralized Finance (DeFi). According to the World Economic Forum's Global Future Council on Decentralized Finance, DeFi is "the application of decentralized technology to financial services, aspiring to provide solutions to and potentially beyond existing financial services." More specifically, DeFi is a system of financial products and services built on blockchain networks that operate without banks or other intermediaries, using smart contracts to enable activities like lending, borrowing, and trading directly from digital wallets.
What is a Crypto Wallet?
A crypto wallet is a digital tool that allows users to securely store, manage, and interact with cryptocurrencies. Unlike a physical wallet that stores cash, crypto wallets don't actually store cryptocurrency—instead, they store the cryptographic keys that prove ownership of digital assets recorded on the blockchain. It functions much like a traditional wallet but is designed for digital assets, enabling users to send and receive crypto and monitor their balances.
Crypto wallets can be either custodial (managed by a third party like an exchange) or non-custodial (where the user controls their private keys). For compliance purposes, this distinction is critical: custodial wallets can be monitored through traditional account reporting mechanisms, while non-custodial or self-custody wallets require employees to self-report wallet addresses and holdings.
Global Cryptocurrency Regulation: What Does the 2026 Regulatory Landscape Look Like?
The crypto space continues to evolve rapidly. Regulators across the globe are putting a high priority on understanding conflicts of interest around cryptocurrency and crypto assets, with an eye on how best to regulate the space going forward.
Global Regulatory Fragmentation
Despite progress toward clarity in individual jurisdictions, firms operating globally face the challenge of navigating different regulatory frameworks across regions.
Europe: EU MiCA Regulation Now in Full Effect
The European Union's Markets in Crypto Assets (MiCA) regulation went into full effect in January 2025, representing the most comprehensive crypto regulatory framework globally. The legislation protects consumers and establishes financial security within the crypto industry. As of mid-2025, authorities across the EU have issued over 40 CASP (Crypto-Asset Service Provider) licenses, with the Netherlands and Malta leading issuance.
According to Lead MEP for MiCA Regulation Stefan Berger, "Consumers will be protected against deception and fraud, and the sector that was damaged by the FTX collapse can regain trust."
United Kingdom: FCA Crypto Regulation Roadmap
The FCA Crypto Regulation Roadmap outlines the agency's plans for developing crypto regulation, setting out plans to regulate cryptoasset activities with the goal of providing clarity to both consumers and businesses.
The FCA published multiple discussion and consultation papers in 2025, including DP25/1 on regulating cryptoasset trading platforms, intermediaries, lending, and staking (May 2025), CP25/14 on stablecoin issuance and cryptoasset custody (July 2025), CP25/25 on application of FCA Handbook rules to regulated cryptoasset activities (September 2025), and CP25/40 on how regulated activities and conduct standards apply to firms offering crypto services (Dec 2025). Final rules are expected in 2026.
United States: SEC Crypto Regulation and Legislative Framework
The U.S. regulatory landscape underwent a dramatic transformation in 2024-2025, as the leadership under the Trump administration shifted and the agency's approach to enforcement shifted.
SEC Leadership Change and New Approach
Former SEC Chair Gary Gensler, who had previously called crypto "the wild west," resigned in January 2025. Paul Atkins was confirmed as the new SEC Chair. In January 2025, the SEC established a Crypto Task Force led by Commissioner Hester Peirce to develop a comprehensive regulatory framework for digital assets. According to the press release announcing the initiative, the "Task Force’s focus will be to help the Commission draw clear regulatory lines, provide realistic paths to registration, craft sensible disclosure frameworks, and deploy enforcement resources judiciously."
U.S. Crypto Legislation Progress
Significant legislative clarity emerged in 2024-2025:
- GENIUS Act (signed July 2025): Establishes a regulatory framework for payment stablecoins, requiring 1:1 reserve backing and consumer protections.
- CLARITY Act (passed House 2025): Creates clearer distinction between digital commodities (under CFTC jurisdiction) and digital securities (under SEC jurisdiction).
- FIT21 Act (passed House 2025): The Financial Innovation and Technology for the 21st Century Act passed the House with bipartisan support, establishing a comprehensive market structure for digital assets.
Spot Bitcoin and Ethereum ETF Approvals
In a watershed moment for mainstream crypto adoption, the SEC approved spot Bitcoin ETFs on January 10, 2024, with 11 bitcoin-based exchange-traded products beginning to trade on national securities exchanges. This was followed by the SEC's approval of spot Ethereum ETFs on May 23, 2024, which began trading on July 23, 2024. These approvals represent a fundamental shift in institutional acceptance.
Singapore: MAS Digital Token Service Provider Licensing
In Singapore, the Monetary Authority of Singapore (MAS) implemented significant regulatory changes in June 2025 under the Financial Services and Markets Act (FSMA). As of June 30, 2025, all crypto firms providing services to overseas clients from Singapore must obtain a Digital Token Service Provider (DTSP) license, with MAS setting an exceptionally high bar for licensing and stating it will "generally not issue" such licenses where "substantive regulated activity is outside of Singapore" and MAS is "unable to effectively supervise such persons."
In MAS’s Consultation Paper on Proposed Measures on Market Integrity in Digital Payment Token Services, MAS proposes that licensed DPTSPs should maintain policies and procedures relating to personal trading activities by their officers and employees. These procedures are expected to cover pre-dealing and post-dealing processes, periodic monitoring and review, and restrictions such as blackout periods
Australia: ASIC Digital Asset Licensing Framework
The Australian Securities and Investments Commission (ASIC) released updated guidance in October 2025 through Information Sheet 225 (INFO 225), clarifying how existing financial services laws apply to digital assets. ASIC now considers stablecoins, wrapped tokens, tokenized securities, and digital asset wallets as financial products, meaning providers require an Australian Financial Services (AFS) license. ASIC has granted a sector-wide no-action position until June 30, 2026, giving firms time to apply for appropriate licenses. In September 2025, the Australian Treasury released draft legislation proposing to regulate digital asset platforms and tokenized custody platforms under the Corporations Act, requiring exchange operators and custodial wallet providers to obtain AFSL licensing.
Japan: FSA Proposes Securities Framework for Crypto Assets
Japan's Financial Services Agency (FSA) announced in September 2025 a landmark proposal to shift crypto asset regulation from the Payment Services Act (PSA) to the Financial Instruments and Exchange Act (FIEA), Japan's securities law framework. This move aims to enhance investor protection by applying securities-level disclosure requirements, conduct rules, and insider trading prohibitions to crypto assets. The FSA released a discussion paper in April 2025 examining regulatory systems for crypto assets, noting that they are "already recognized as tools for alternative investment for portfolio diversification", which aligns with investment-oriented financial products under FIEA. Crypto exchanges would be regulated under standards equivalent to "Type 1 Financial Instruments Business," the same level as traditional securities brokers.
