From Crackdowns to Clarity: Shifting Global Crypto Regulation - TOKEN2049 Singapore 2025

All right, welcome everyone. Um, regulation has been definitely the biggest topic or one of the biggest topics of uh the year in crypto. Um, and here we have uh some of the most prominent voices to talk about it. So very fortunate uh to be here. Um let's start with just talking about the huge shift in the environment that we've seen just in the last few months.

Um so we went through um a period where there was honestly just like hostility like outright hostility against crypto especially in the US and now that has completely changed. Um so for to all the panelists if you can describe uh what the crypto regula regulatory environment is like today in the US and and globally what does kind of the the overall landscape look like? Um and let's start with David.

Sure. Thanks uh very much for the question then. Thank you the organizers for including circle and myself. I I think if I if I look at the landscape and I had to kind of really summarize what's the what's the way to really cap encapsulate the shift I think it's a shift from if to how and what I mean by that is it's no longer an existential question around whether we should have certainly I'm speaking specifically around stable coins it's yes this technology makes sense there's real world utility in it can really add value to the ecosystem and to economy So it's now shifted to now how do we how do we a regulate this and then how do we integrate it into the financial system and so the passage and signing into law of the Genius Act I think really puts an an exclamation point on a trend that's been happening the last three to five years. Uh and I think it's important to to to kind of reflect on that.

Um, if you were to go back five years ago, there was very at the very very proto beginning of regulatory regimes being thought about. Mika was being discussed, but didn't yet exist. And it's been this this movement now to develop increasingly these formal rules of the road for digital assets and for stablecoin. And um you know if you if you juxtapose that against traditional finance the amount of progress we've made in the last sort of 5 years has actually been quite remarkable. There's certainly more work to be done.

We can talk about that and as we go on but but enormous progress has been made. And the last thing I'd note I think is this um different taxonomies and recognition of asset classes and the separation of them across digital assets I think is becoming more clear uh as the rule. So you have a clear clearer rules around digital assets developing clearer rules around things that are sort of categorizes more as like a commodity

versus a security and more clear rules and taxonomy developing around stable coins.

Perfect. Jason, what do you think?

So for the last eight years in the United States, the answer to most crypto questions was very simple. The answer was no, you cannot do that here and you'd have to go abroad to do it somewhere else. Uh now that's changed. We've obviously had a giant change for some reason. I I can't really remember what happened in the United States.

It changed that. Um yeah, we it's the last panel of the afternoon. We have to tell jokes. Uh so with that change, uh we we have a new set of problems. The problem exactly as David said is okay, how are we going to do that?

We're now starting what we should have done in 2015 and 2016, looking at the laws, the regulations as they currently exist and thinking, does any of this actually map onto the the regulatory model that we have? And in many ways, it does and in many ways it does not. So, we're currently grappling with how to work out all of this short of passing big market structure legislation, which has passed the House and the US, but has has not passed the Senate. uh are frankly not that optimistic. Um short of that legislation, we have to figure out how to deal with the current regulations.

Some of that could be no action letters. We've seen a couple of those come out recently. Some of it could be exemptive relief and I I know that myself and a number of people in the room are actively working for that. Uh but it's it's going to be a long hard road because there's still a lot of uncertainty.

Interesting. Wasi

I think the best way to explain this is that you know let's say as early as you know a year ago two years ago if anyone came to me and said hey man I want to do uh NFTTS on chain I want to do a governance token I want to do a tokenized hedge fund I mean uh no no [ __ ] way mate absolutely not you're going straight to jail and now if someone goes like hey I'm doing a tokenized hedge fun I'm like yeah man let's [ __ ] go when are we issuing the token when we issuing the governance tokens you know so it's it's so been a shift in the regulator victory regime. I almost feel like it's almost gone a bit too far the other way to be honest. I mean, it was too extreme to start with. Initially, it was the case that no matter how legitimate or the argument that your token wasn't a security is, it didn't matter because if Gary Gansler decided a security, you're [ __ ] You know, you're going to spend your entire VC funding defending the SEC. Um, now on the other hand, it's it's almost gotten a bit too egregious where people are saying, hey, you know, just do whatever the hell.

Like, crime is legal for the next stream. Just do everything. So, it's kind of gone almost too far the other way. Um, but I'm not sure that's

a great thing. I think like the pendulum probably comes back over time as the regulatory regime sort of becomes a bit more stable. Um, you know, as political environment in America becomes more stable because the thing is that uh I mean I I I I work out of Singapore, right? I mean I practice uh I'm an English lawyer. I do came law, BVI law, Singapore law across the board.

And what tends to happen is that we all follow the US's lead at the end of the day. If the US is aggressive to crypto, you expect pretty much the rest of the world to be more,

you know, aggressive towards crypto. Whereas, as the US is more lax about it, you also see places like Singapore and so on relaxing. Even if they might be passing legislation, the enforcement is nowhere as aggressive.

Yeah.

Um, yeah, that that's a great segue to my next question, which was exactly that. Have we gone too far on the other way? Uh, and you seem to to say yes, it it hasn't gone too far. I think it's it's even become a meme like is this the the crime cycle? Um so so yeah what what are your thoughts there Jason?

So surprisingly law still exists right people should not commit crimes. Uh I know there seems to be this attitude well the the forcers have backed way off and to be fair they have but they're still very active in uh fraud and other kinds of criminal activity. Uh, so people do need to be pretty careful. U, the pendulum hasn't I I think so much swung as it's kind of been picked up and smashed into into pieces and we're trying to figure out how to put all that stuff back together. Uh, I frequently remind my clients that the statute of limitations for pretty much anything they're doing is longer than the current administration.

Uh, so they can't be absolutely assured that anything that they're doing is is going to be uh, completely okay from now on. I think it really requires people to take a a thoughtful look at

whether they're doing things correctly under the law. Where are the gray areas and they have to take calculated regulatory risks. Um I I think some of that is is a um some of that goes too far and that's where what gives us the crime season vibes. Um but um this is the this is not legal advice, but it kind of is legal advice. People, please don't commit crimes.

That's generally good advice. Yeah, David, why do you think

Yeah. Well, well, look, I I I think first of all, I'm I'm going to say something that's probably a bit of heresy in this venue, which is that if you kind of kind of reflect on the evolution of digital assets at the early stages, um the idea was we're going to operate kind of in outside of formal rules and and we're going to kind of build our own economy without regulation. and you had a lot of innovation happen. Um, we have what 2 point is it about 2.7 now I guess trillion in Bitcoin market cap and another 1.

3 and other. So that's pretty good almost $4 trillion in economic activity outside of regulatory environments but honestly that's a pretty small a number compared to the real economy. And I think the big headline story is that actually as we have regulation coming in, we're going to see even more innovation than we saw when we didn't have it. And in addition, um when everything was outside regulation, it was all in a gray zone. It actually was a I would argue a more conducive environment to criminal activity.

Well, we certainly still have criminal activity in the context of regulated environments. A, it's a pretty small number compared to the total activity. Number one. And number two, this is really important. When you start to move the economy into a regulated space and you have rules of the road, you can start to separate gray zone activity and in really bad activity from good activity.

And and everyone in the ecosystem and in law enforcement can start focusing more on the really bad behavior that we need to that we need to address. And I think you're seeing that happen. Um, as you have more institutions building in compliance, KYC, AML, you're starting to be able to see that that zeroing in on the activity that people want to bleed out of the system. And I think that's really um, you know, quite an important set of of developments for us as an industry.

For sure. It seems like before the Trump administration the idea was that okay there are no rules but implicitly everything's illegal and now it seems like okay there are some rules like we do have the genius act but we we're missing a lot a lot more kind of rules of the road but implicitly like everything is not illegal. So I think there like there needs to be I think more um more regulations in different aspects of crypto for what you said for like more economic activity to move on chain in a more legitimate way.

Well and I think as you have more institutional players coming into this space um a there's going to be a rationale for continuing to clean up the marketplace and a demand and an expectation that that happen.

Yeah. Okay. So, continuing with you, uh, David, this question is specifically for you. Um, because you've been, uh, you know, USDC with Circle has kind of led the way on kind of the compliant way, uh, of, um, issuing stable coins. Uh so from kind of this front seat into regulatory environment globally, where do you think you know who's kind of like leading the way uh really kind of taking um a good approach to crypto regulations and stable coins and who would you say or like which uh jurisdictions are falling behind?

Yeah. So, so I think the as I kind of mentioned at the outset, um I I think we've come a long way and I think there's a number of keystone jurisdictions that have put in place rules of rules and regulations. Um and obviously, you know, again, that exclamation point is the Genius Act.

Um but it it doesn't while it might stand kind of very prominently, it doesn't stand alone. Uh and if you think about the the mika rules in the EU, obviously genius in in North America, uh Japan putting in place their own stable coins framework. Here in Singapore, there's a framework for digital assets, Hong Kong has put in place their rules. what you start to kind of see and and you have this in the Gulf as well. Um Abu Dhabi uh and Dubai, you're starting to see this all of the tier one tier one global financial centers putting in place some form of rules of the road.

There's some still coming online. I know like China's sitting on the sidelines watching very closely. We'll we'll see what they do. India is as well. Um, and while there are certainly differences among these regimes, I would say the similarities are actually more striking because I think you have a convergence uh of what does it mean to have a properly constructed and regulated stable coin and there's some really common features that stand out and that's the one forone asset backing with high quality liquid assets.

They should be custoded in a highquality safe institution. There should be third-party attestation on a regular basis with a high level of transparency. There should be strong redemption rights. The assets should be held uh in kind of simple ownership for the benefit of the token holders. They're not co-mingled with corporate assets.

Um, and so these features, you know, are really important and and that's alongside this strong compliance regime that makes sure that there's real protection for the holders of the token. And I think all of the regimes have some variation of these types of attributes. So I think that's a really um really positive set of developments and I think that's working really well. Um I think globally some other features that we see working very well are where there's a recognition of uh foreign issued stable coins to be able to circulate in a market and conversely where we where we see things not working as well uh is where there you you you don't have that recognition of foreign issued kind of the building walled gardens and and very localized requirements that risk fragmenting the system. And so, you know, there's still areas for for improvement,

right? But it's I mean, it's important uh that you point out that at least like in in these major economies, there's more similarities and differences and important to have that for like stableness to be composable globally and and so on.

Yeah. But I think interoperability will be the next big area of focus to make sure that we don't have walled gardens that you can move uh tokens across chains. So, for example, we have a cross-chain transfer protocol. Others have their own solutions to allow for that movement of money because I think that's going to be very important to unlock the true utility of the tokens.

Totally. Jason, so you you've been, you know, advising uh crypto startups and and companies uh for many years. You went through the whole regulation by enforcement uh kind of era of the SEC. And now like we've we've talked about this like huge shift that's happened. Um what's your recommendation to to your clients to you know companies building in crypto?

Um is the US a good place to be right now?

Yeah the the short answer is the United States is a great place to be building right now. Um there are still uh advantages that other places might have more uh developed law in this particular area, tax advantages, but obviously the United States is is the the largest and most liquid market in the world. Uh we've got lots of cash. We've got lots of talent. It's a great place to be building.

And uh now which is much different than it has been, we've got a more permissive type of environment. um for the SEC which I spent uh eight years uh fighting every single day. Uh now we have a crypto task force uh which is a bunch of very smart people in a room who are working very hard trying to get to the right result. They're not just saying yes go do whatever you want. They're really trying to figure out where the new technology has mooded the need for particular regulations to try to figure out whether we can do something smarter about those regulations.

So, a lot of praise is is due for the crypto task force and um hopefully the the rest of the SEC comes along. Uh we're starting to see some activity. I'd love to see more activity in the form of um exemptions or further no action letters, but right now it's a good time to be building in the United States. That doesn't mean you can't build in the rest of the world. We're seeing the rise of of dual structures of folks who take advantage of the the beneficial tax treatment in the Caymans, but also take advantage of the pool of talent and capital in the United States.

And those are some uh really interesting projects and and in some ways the best way to build.

Awesome. Um, so specifically about uh about DeFi, I I'd love to hear your thoughts on um where you think regulation should go on the more kind of permissionless, self-custody uh like onchain side of crypto because that you know there's definitely like lots of differences from um uh what you know in general what we've been been talking about. It seems like it's just harder to regulate that side of crypto. So,

I fully agree. I think it's harder to regulate and there's a question of whether it should be regulated. Even

I think crypto is the crypto industry is sort of going to split into two, I think, where you have this like very regulated traditional finance where people are looking at crypto as like a technology better for settlements, you know, better for trading, so on so forth. And then you have the other side which is DeFi, which is really more of like a social cultural movement. I think at the end of the day it genuinely is a we are going to build our own economy with black general hookers right where it's going to be different from you know traditional finance

you could try and regulate it right you try to regulate the on-ramps and off ramps and so on so forth but it's very hard to regulate DeFi itself because the people in there they want to trade of each other the bigger problem uh the bigger problem if people say they want to regulate DeFi

the the the real issue here is when the two worlds kind of collide a little bit because when you've got DeFi people who are deep in DeFi and they're trading coins in DeFi, borrowing against their assets, doing stuff, they lose their money. They're like, you know what, I took the risk because I understand the technology and so on and so forth. The difficulty is when people who build these sort of products want the liquidity from retail and they try and go to Korea or they try to go to the US and they want to sell it through Coinbase, through Kraken, through Binance to people that don't know what they're buying. And that's when you start reg that's when you kind of really have a regulator because you have to regulate and protect retail. But when people I feel when people have enough sophistication and enough education to go on to DeFi, custody your own wallet, buy whatever you know token that you want to buy, it's kind of almost on you really.

Um yeah, and we could try and regulate it. It' be very difficult and I don't think regulation actually solves the problem. What about things like Okay, because I I think it's it's there there's a lot of there's a stark difference between crypto where you're self-custodying um and crypto where you're trusting a third party, a centralized entity to custody your assets. So, I think that's like a a clear definition,

right,

distinction that we we we could

Absolutely. The big issue is when you say I'm DeFi, but it's really some multi-IG wallet or a single wallet that everyone sends funds to. That's not DeFi. If it's a if it's a smart contract that's actually immutable and I send token A and token B comes out no matter what. Yeah.

Then fine, that's DeFi. But if you say, "Oh, I'm building a D5 protocol. Send me all your money and I've got a billion TVL, but it's all my wallet." You know,

it's not DeFi, is it?

Yeah. Yeah. I

And you should be regulated,

right? I agree with you that there's this like gray area that's that's really hard to to deal with. Like, okay, like the multi-IG is a great example. I think like exploits too like is code law uh like or or should people who are who for purposely treating code in a way to steal funds?

Yes.

Um and like using those loopholes like should that be uh should that be regulated? Uh there's like insider trading obviously pump and dumps and memecoins like

you know things like that where it's like okay it's defy permissionless sure but like it feels like you know there's obviously room to set some some

No absolutely I think if you go to a casino and you start gambling and lose your money you don't try to sue the casino basically but if you go to the casino and you get robbed as you exchange your chips you certainly should be going after the casino

um I mean

no matter what whether this DeFi specific regulation or not fraud is never legal. So if you've got someone dishonestly creating a protocol to steal everyone's funds, just because DeFi isn't regulated doesn't make it legal. That's fraud and they should go to jail.

Perfect. Okay. To start wrapping up, um just I I'd love for for the panel to look h forward. We've, you know, as we've laid the ground here, definitely made a lot of progress in just a few months uh in crypto. But what what's coming like what uh what regulation would you want to see?

What bills need to be passed for the the industry to continue growing? Um David,

well certainly looking first at the United States as exciting as the Genius Act is there is the need to pass a market infrastructure bill. So for genius covers stablecoin and we at circle like that but there's obviously many many other digital assets that still do not have formal legal uh coverage United States. So uh I think you have a very open debate right now in the US. Um hopefully that will be resolved in the near future. uh in addition uh I think it's there are a lot of um need I think to develop more and um harmonized approaches on critical areas of uh digital assets and stable coins in particular areas around compliance what is the what is a internationally recognized standard for KYC AML's TTF uh a lot of work ongoing in in venues like ISCO and FSB the V is I think that's actually going to be really important.

Um I said at the outset that you know we're still early days and um I think rightly the industry is impatient. Um these organizations tend not to move quickly but we need them. I think if we're going to have proper fungeability of tokens, proper interoperability, it's great to have the national rules but we do need some agreements that are are truly crossborder. Um and so I think a lot of work needs to be done there. Uh a third area that I think is going to be very important is we have a very US dollar token dominated ecosystem right now and that's that's okay right I mean we issue a US dollar token so that's not bad for us but I think for us to have a truly um global ecosystem what we what we'd love to see and I hope we think we will see are more and more national currencies developing their own stable coins because then you could really start developing a true global ecosystem.

You could start migrating elements of traditional finance into the digital realm whether that's FX smooth movement um at the border and cross the border when you have native tokens and national currencies that you can convert with. So I think that's the and the fourth thing I want to mention very quickly that we don't talk about enough I think in these kinds of of conferences and and uh Vasio I think you mentioned this a bit that's the programmability aspect

of tokens I think there's huge potential in the technology we talk a lot about the utility of it huge potential in the conversion of currencies to software making them subject to if then statements infinite possible uses as many apps as you can imagine on your iPhone. We can have apps for money. Um, I think we need to start thinking to the next phase of growth. What are the rules of the road for developing softwarebased money solutions that we can all benefit from? And I think that's incredibly in my mind the most exciting element of the technology.

Yeah, I think to accomplish that I'm hoping for two things to be happening simultaneously. One, I I sort of like and welcome the move of traditional finance and traditional financial models, regulations, KYC into the crypto space. It it sort of is bringing a professionalization and internationalization to the space that will make it hard to dislodge. If the United States pendulum swings back the other way, but 3 years from now, we've got crypto fairly well lodged in and embedded into the traditional financial markets through traditional financial institutions. It's going to be very hard to dislodge like you're you're not stuffing that uh back in the can.

On the other hand, many of us got into crypto because we don't like the big traditional banks and and the financial institutions. And I think if crypto basically becomes all the big financial institutions but crypto, we have failed, right? We have failed to do what we came here to do, which is disrupt industries and disintermediate uh some of the the the the rent seeeking intermediaries. So, you know, I'm I'm rooting for the the big financial institutions to normalize this so that it it it's here to stay, but I'm also rooting for, you know, our dgens, our our DeFi developers, our software coders, our our, you know, insane crazy people, the meme coiners, the perverts, everyone out there who's doing the stuff that's below the radar outside that system. I'm rooting for them, too.

And uh I I'm hoping for for their success because that's what will keep the energy going in this industry and really start to push the programmability. I don't want residential mortgage back securities just tokenized. Like that's cool, great, whatever. But, you know, I want new and interesting programmable money that you control yourself. That's cool.

And and that's what I'm here for.

Totally. Yeah. I think that DeFi needs to grow up a bit and we need to start self-regulating. There needs to be sort of rules of engagement even in the DeFi space itself. Instead of saying either, you know, all everything's regulated, I hate everything or like regulations are gone, crime is legal.

I think we need to start setting standards for ourselves because DeFi is in this place where we almost have like a tragedy of the common situation where people are getting increasingly aggressive about attacking a pool of liquidity. So a lot of them retail uh retail liquidity that is on D5 without thinking of how to keep this going. So I I've always thought it was a missed opportunity because I I felt that a lot of um a lot of the industry stalarts you know exchanges and so on and so forth should be the ones coming together self-regulating saying these are the standards you know if you don't get x amount of audits if you don't it's not sufficiently decentralized we're not listing this token we're not selling to retail we're not integrating your chain but the the exchanges aren't doing that they're sort of saying oh you know you get a legal opinion from some random lawyer in the middle of nowhere yeah fine we'll list it we'll sell it to whoever the hell you we we you want you want to sell it to I I think when you want to build your own economy, it also means taking responsibility for it. It means coming here and saying that these are the participants in our industry that we care about. We believe that this is the future of money, but there are rules of engagement and we are going to set those rules of engagement because we understand it the best.

Why are we waiting for some senator or some someone in the US to think about DeFi when we are living and breathing it? We know what a scammy contract is. We know what a scammy pump and dump is. you know, maybe people need to get together and say, "We're not listing this. We're not trading this.

We're not working with people like that." And that's how I think D5 grows up when we show that we're responsible people and we can regulate ourselves.

Absolutely. Couldn't agree more uh with with all you guys. Uh what what a great panel. Um I think well yeah, I'm always rooting for the Dentons as well. Uh I think it's uh it's absolutely the case that well with more freedom comes more responsibility and I think that's what we're seeing now.

Uh crypto has more freedom to add. Uh but now I think it's a great point. Uh the industry needs to set its own rules because it understands uh the this economy better. Um so hopefully you know this is kind of this next stage of um the wild west that's not so wild anymore. It's becoming more institutional.

Um so anyways uh thank you so much uh to all the panelists and thanks everyone for joining us.

Thank you everyone.