Source: Beosin
With the rapid development of blockchain and cryptocurrencies, the direction of global Web3 regulation is undergoing profound changes. As we enter 2025, governments and regulatory authorities around the world are gradually adjusting their policies towards this emerging field to meet the demands of market growth and technological innovation. This article will explore the main trends in Web3 regulation in 2025 and analyze their far-reaching impact on the cryptocurrency market, technological innovation, and investment opportunities, particularly how Virtual Asset Service Providers (VASPs) can ensure compliance and meet the challenges of on-chain Anti-Money Laundering (onchain AML) in an increasingly strict compliance environment.
1. SEC in the US Relaxes Cryptocurrency Enforcement
The US Securities and Exchange Commission (SEC) has taken a relatively strict regulatory approach towards cryptocurrencies in recent years, especially in the regulation of crypto exchanges, ICOs, and token issuances. However, with the maturity of the market and the government's growing recognition of the potential of blockchain technology, the SEC has recently shown a certain trend of policy relaxation. The US Congress has begun to push for the development of a clearer and more unified Web3 regulatory framework, which will bring a more stable regulatory environment for the cryptocurrency industry, thereby promoting technological innovation and market development.
The SEC's relaxed regulation may bring more investment opportunities to the cryptocurrency market. Particularly in a technology-friendly policy environment, the blockchain and crypto asset market will have the opportunity to thrive. Cryptocurrencies not only provide new investment channels for the traditional financial market, but may also become an important tool for solving the problems of the global financial system. Especially in the fields of cross-border payments, smart contracts, and Decentralized Finance (DeFi), the innovative advantages of blockchain technology are becoming increasingly apparent.
2. Diversification of Global Cryptocurrency Regulatory Policies
Although the US regulatory policy tends to be relaxed, there are significant differences in the regulatory attitudes towards cryptocurrencies globally. Different countries have adopted different regulatory strategies based on their own economic conditions, technological development, and political environment.
● Hong Kong: The Hong Kong Securities and Futures Commission (SFC) has promoted the transparency and compliance of the cryptocurrency market by approving Virtual Asset Service Provider (VASP) licenses. As of 2024, the Hong Kong SFC has legally licensed seven cryptocurrency exchanges, and the issuance of this license has increased the transparency of the entire industry and further enhanced market confidence.
On December 6, 2024, the Hong Kong government announced the highly anticipated Stablecoin Bill. This legislation provides a detailed regulatory framework for the issuers of Fiat-Referenced Stablecoins (FRS), aiming to make Hong Kong a global leader in the virtual asset sector.
In addition, all OTC merchants must apply for a license from the Hong Kong Monetary Authority (HKMA) to operate legally. The license application requirements will include the following aspects: Financial strength: OTC merchants need to prove that they have sufficient capital and financial management capabilities. Risk management: OTC merchants need to develop a comprehensive risk management system, including measures for anti-money laundering, counter-terrorist financing, and cybersecurity.
● South Korea: South Korea has implemented a strict cryptocurrency exchange licensing system and imposed strong anti-money laundering obligations on virtual asset operators. Virtual Asset Service Providers not only have to bear anti-money laundering responsibilities, but also need to conduct user classification and transaction monitoring. These measures indicate that while strengthening market regulation, South Korea also provides legal protection for the long-term development of the cryptocurrency industry.
● Singapore: As an international financial center for blockchain and cryptocurrencies, Singapore's regulatory framework is relatively relaxed. The Monetary Authority of Singapore (MAS) has licensed cryptocurrency service providers, ensuring that these companies comply with basic requirements such as anti-money laundering, Know Your Customer (KYC), and transaction monitoring. In addition, the MAS-issued Digital Payment Token (DPT) service license also provides clear compliance guidance for relevant companies.
● Turkey: Turkey's regulation of cryptocurrency service providers is also becoming increasingly strict, requiring trading service providers to submit user identity information, especially for transactions exceeding a certain amount. These measures help to improve the transparency of transactions and prevent the flow of illegal funds.
The different regulatory policies of these countries show a trend: governments around the world are adjusting their regulatory frameworks for cryptocurrencies based on their own national conditions. Overall, more and more countries are beginning to recognize the potential of cryptocurrencies and are trying to promote their healthy development through reasonable regulatory policies.
3. Government Policies Supporting Innovation Promote the Expansion of Blockchain
Some countries, especially those with technology-friendly governments, are actively promoting the innovation of blockchain technology. For example, Natalya Lederman, a partner at Sullivan & Worcester, pointed out that former President Donald Trump publicly expressed support for the cryptocurrency market and opposed excessive regulation during his tenure. This policy support has created a favorable environment for the expansion of blockchain technology and the investment of venture capital.
Governments play a crucial role in supporting innovation. Taking the US as an example, as policies become more relaxed, more and more blockchain startups will be able to obtain financing and further drive technological innovation. Blockchain technology itself will also become a key tool for solving the security and privacy issues brought by generative artificial intelligence (AI). The decentralization and immutability of blockchain can provide guarantees for the transparency and traceability of AI data, thereby enhancing the trust of all sectors of society in AI technology.
4. VASP Regulation: Strengthening Global Transparency and Compliance
With the strengthening of VASP (Virtual Asset Service Provider) regulation, more and more countries are establishing clear licensing systems. By setting up VASP licenses, regulatory authorities can ensure that cryptocurrency platforms meet compliance requirements and enhance market transparency. This not only helps to combat money laundering, terrorist financing, and other illegal activities, but also helps to boost investor confidence.
For example, places like Hong Kong, South Korea, and Singapore have begun to require cryptocurrency trading platforms to provide relevant legal documents and operational reports to ensure that these platforms operate in accordance with local laws and regulations. These regulatory measures will further enhance the legitimacy and transparency of the global cryptocurrency market, laying the foundation for the long-term healthy development of the blockchain industry.
5. Compliance Companies Assist VASPs in Compliance
With the rapid development of the Web3 and cryptocurrency market, how to comply with the increasingly strict global regulatory requirements has become one of the key challenges for Virtual Asset Service Providers (VASPs). Particularly in the areas of Anti-Money Laundering (AML), Know Your Customer (KYC), and transaction monitoring, Virtual Asset Service Providers must implement strict compliance measures to avoid legal and regulatory risks.
6. Future Challenges and Opportunities of Web3 Regulation
Although the global Web3 regulatory policies are gradually becoming clearer, they still face many challenges. First, the lack of uniformity in the formulation of regulatory frameworks among countries may lead to compliance issues in cross-border transactions. Second, the decentralized nature of blockchain technology makes it difficult for regulatory authorities to intervene directly, which also increases the complexity of regulation. Finally, the high degree of innovation and rapid changes in the cryptocurrency market also require regulatory policies to be constantly adjusted and improved.
However, the regulation of Web3 also brings great opportunities. First, the promotion of compliance will attract more institutional investors to enter the cryptocurrency market. Second, the global regulatory framework will promote cross-border cooperation between different regions and countries, driving the application of blockchain technology globally. Finally, government policies on Web3 regulation will provide new impetus for the innovation of blockchain technology and the cryptocurrency market.
7. Conclusion: Regulation and Innovation Proceed in Parallel, the Future of Web3 is Promising
In 2025, the global regulatory trend of Web3 is developing towards a clearer and more comprehensive direction. The regulatory relaxation in the United States, the compliance requirements in European and Asian countries, and the pursuit of transparency in the crypto currency market globally all indicate that the Web3 industry is moving towards a more mature stage. In this process, technological innovation and regulatory compliance will advance in parallel, shaping the future of cryptocurrencies and blockchain.
As global regulatory policies are gradually improved, Web3 technology will be applied in more fields, and blockchain will become an important tool for solving global financial, social, and privacy issues. The healthy development of the crypto currency market cannot be separated from the reasonable regulation of governments in various countries. The future of Web3 will be a new era where technological innovation and policy compliance are combined.
