Regulatory policies for crypto-asset offerings

This chapter discusses regulatory approaches to crypto-asset offers, a phenomenon that exploded in 2017-18, as a form of unregulated fund-raising. Initial different policy approaches were taken by regulators due to different priorities for pro-innovation, investor protection or other protective interests. The EU has now introduced the MiCAR which offers a policy balance between enabling regulation and proportionate governance for the crypto-asset market. This has led to accelerated regulatory policy in the US as well as the start of international policy convergence. International convergence has also been driven by the fall of large unregulated exchange FTX which provides a culminating market failure moment for regulators worldwide. This chapter offers two key takeaways in policy development comparison. One, policy and regulatory divergences often emerge amongst jurisdictions in the face of a new phenomenon, but these divergences and priorities may be forged towards convergence if narratives of a global and common problem arise and capture regulators’ imaginations. Two, the leadership of a pioneering policy in a key jurisdiction, such as the EU in the form of MiCAR, can provide a benchmark effect for other regulators’ considerations, although on its own (without the global driver of FTX’s failure), the convergence persuasion may be mixed.