Web3 technology, as one of the latest frontiers of the digital age, is reshaping finance, social networking, business and other fields at an unprecedented speed. However, the competition between innovation and compliance has never stopped, and the "winter" of regulation seems to be gradually coming. The policy attitudes of "6050I clause" and "Tornado Cash sanctions" are still unresolved. This article will explore the complex status quo and possible future evolution of global Web3 regulation from the perspective of Ai Ying, and see through the intricate relationship between technology, policy and freedom.
1. The regulatory maze of the United States: the protector of freedom or the obstacle of innovation?
The United States has always claimed to be a leader in global technology, but in terms of policies in the fields of cryptocurrency and Web3, it shows another "split regulation" scene.
1. The light of centralization: from regulatory uncertainty to policy dawn
The new US government may show positive signs in the direction of regulation in the securities and banking sectors, especially in the issuance of stablecoins and centralized trading markets, which may usher in a clear and unified policy framework. This stable expectation has undoubtedly injected a shot in the arm for centralized enterprises, reducing the risk of being stopped by policy uncertainty. For example, in the debate over stablecoins and securitization, more and more consensus is being reached, the market's panic about regulation is gradually easing, and the dawn of compliance is beginning to emerge.
However, it is worth noting that the dawn of policy does not mean unconditional relaxation. In recent years, the SEC has increasingly tightened its enforcement of centralized exchanges such as Coinbase and Kraken, expanding the definition of unregistered securities and trying to regulate them in the light of centralization. It can be said that although the centralized market may usher in policy dividends, regulators will obviously not allow it to get out of control, and gray areas still exist.
2. The shadow of privacy and decentralization: the existential crisis of mixing services and developers
Compared with the relative relaxation of centralization, decentralized innovators face more severe pressure. CoinCenter specifically named two policies: 6050I clause and Tornado Cash sanctions. These two policies almost directly aim the regulatory "spearhead" at on-chain privacy and the key to developer survival.
6050I clause is that all persons who receive cryptocurrencies equal to or exceeding $10,000 must report to the U.S. Internal Revenue Service (IRS), including detailed identity information of the counterparty. However, in decentralized applications, the two parties to the transaction may be unknown to each other, which makes this mandatory provision technically impossible to enforce. At the same time, this unconditional reporting requirement has also triggered a serious privacy crisis.
More symbolic is the Tornado Cash sanctions. This on-chain privacy mixing service was directly included in the sanctions list by the US Treasury Department, and developers are facing legal risks. This sanction is not only aimed at a tool, but also an open challenge to on-chain privacy. CoinCenter believes that this selective attack may prompt many developers to stay away from the United States and even from the public eye.
2. EU and Asia: hotbed of innovation or harsh constraints?
The EU and Asia also show dynamic and phased characteristics in their attitudes towards Web3 regulation.
1. The EU's two sides: the tight ring in the regulatory sandbox
The EU has become a "pioneer" in Web3 regulation with its MiCA (Crypto Asset Market) framework. This framework provides a set of rules for the issuance and market trading of cryptocurrencies, aiming to provide clear compliance guidance for the European crypto industry. However, this "systematic" compliance management does not mean loose and worry-free. The EU is also promoting strict anti-money laundering regulations, requiring all participants to keep more detailed records of user identities.
The seemingly open regulatory sandbox is actually not a pure hotbed of innovation. For decentralized applications, the MiCA framework retains some gray areas of "exemptions", but there are still many obstacles to its specific implementation. On the one hand, they hope to promote compliance innovation, but on the other hand, they continue to raise the threshold of compliance. This two-sided strategy makes the future of decentralization also full of uncertainty.
2. Asia: From unregulated freedom to strict institutional constraints
Asia was once considered a "safe haven" for crypto assets, but as the market expanded, regulation gradually became stricter. Taking Singapore as an example, while liberalizing the crypto market, the Monetary Authority of Singapore (MAS) has also continuously introduced new regulations, with more and more restrictions on high-leverage transactions and retail users. In Japan, the world's first stablecoin regulatory law it promulgated clearly requires that stablecoins must be issued by banks or trust institutions, which undoubtedly sets a higher entry barrier for Web3 companies.
Although Hong Kong recently reopened the virtual asset service provider (VASP) license in an attempt to attract capital repatriation, it also comes with strict regulatory terms. The tightening of policies in these regions indicates that Asia is also gradually shifting from "embracing innovation" to "compliance first."
3. The game between privacy, freedom and national security: the bottom line of compliance and the red line of innovation
Compliance issues in the Web3 field have gradually evolved into a game between privacy, freedom and national security.
1. The disappearance of privacy?
Tornado Cash sanctions show us a choice: privacy, or national security. To some extent, the existence of privacy mixing services is no different from traditional cash transactions, all of which are to protect users' financial privacy. However, the public on-chain records make these services a special target for law enforcement.
CoinCenter believes that the crackdown on decentralized privacy tools may weaken the innovation willingness of decentralized developers in the long run in the future. This policy choice is likely to cause Web3 to lose one of its core attributes - privacy.
2. The logic of national security
At the same time, policymakers' positions are more inclined towards national security. In on-chain transactions, cases of terrorist organizations, criminals, etc. using technology to circumvent sanctions occur from time to time, which becomes a legitimate reason for regulators to intervene. In this context, the call for privacy protection is often quickly suppressed under the banner of "national security".
3. The fate of decentralization
If decentralized tools and technologies are forced to flow out due to policy uncertainty, the innovation of the entire Web3 may lose a large part of its momentum. Especially in the context of tightening regulation in other major jurisdictions around the world, the direction of US policy will undoubtedly become a key factor affecting the innovation landscape of Web3.
4. Ai Ying's perspective: Break the shackles and protect the fire of innovation
From Ai Ying's perspective, the road to compliance for Web3 should not be concessions and compromises, but how to seek true innovation and freedom within the framework of the system. Compliance should serve innovation, not shackle innovation. The technological development of Web3 cannot stagnate due to legal restrictions, and it cannot make an absolute sacrifice between privacy and free expression.
Ai Ying will continue to track the dynamics of Web3 regulation in countries around the world and is committed to helping companies find ways to cope with complex compliance environments. We believe that true compliance is symbiotic with technology, not in opposition. In a complex world intertwined by technology, law, and market, protecting privacy, freedom of speech, and the freedom of decentralized development is not only a battle for technology innovators, but also a common pursuit of all those who love freedom and innovation.
Joy
Hui Xin
YouQuan
Brian