Government regulation of cryptocurrency in Europe and America

Europe and America are not lagging behind other countries in the development of the cryptocurrency sector.

Many fundamental projects and services have been created in these countries, which are still used around the world today. However, it is the existence and active development of crypto initiatives that has led states to consider regulating them.

Who regulates cryptocurrency

Cryptocurrency regulation in Western countries is shaped by the intersection of legal systems, technological innovation and investor protection, just as it is in Asia.

Europe and the US have different approaches to managing the crypto market, but both jurisdictions set the tone for the global crypto industry and laws.

The main players in crypto regulation are:

• In the US: SEC (Securities and Exchange Commission) and CFTC (Commodity Futures Trading Commission)

• In Europe: the European Commission and national financial regulators within the framework of MiCA

Cryptocurrency in Europe

Cryptocurrency in the EU is subject to regulation under the Markets in Crypto-Assets (MiCA) law, which came into force in 2024. This law is the first comprehensive regulation covering digital currencies, stakeholder regulation, exchanges, token issuers and custodial services.

According to MiCA, a cryptocurrency licence is required for legal activity, and strict KYC/AML, consumer protection and reporting standards are in place. Overall, Europe is striving for high transparency and a stable legal environment.

Cryptocurrency in the United States

Cryptocurrency in the United States is regulated through a conflict between the SEC and the CFTC, resulting in a divided legal framework. The SEC seeks to recognise most tokens as investment contracts, as in the Ripple case (which they lost, by the way), while the CFTC considers them commodities.

This fragmented approach increases risks for investors, as there is no single federal law. There is also a cryptocurrency taxation system in place that requires strict reporting.

Cryptocurrency laws in the United States are still largely shaped by court precedents and congressional initiatives.

Cryptocurrency regulation in Russia

Cryptocurrency regulation in Russia is based on Law No. 259-FZ ‘On Digital Financial Assets,’ which regulates the legal status of tokens but prohibits the use of cryptocurrencies as a means of payment. Thus, cryptocurrency regulation in the Russian Federation is restrictive in nature.

Legal regulation of cryptocurrencies in Russia also includes KYC/AML requirements, but there are still gaps in the regulation of DeFi, NFTs and foreign crypto platforms.

Similarities and differences in regulation

The differences in regulation between the US and the EU are quite noticeable. The EU is moving towards a centralised, unified law (MiCA), while the US is still operating through competing agencies and court practice.

In the EU, there is a single licence for cryptocurrencies, while in the US there is uncertainty and increased risks for investors.

The similarities lie in strict KYC/AML requirements, the fight against illegal trafficking, and the formation of cryptocurrency taxation regimes.

The legal regime for cryptocurrencies and the market

The legal regime for cryptocurrencies determines how legally and safely participants can work with digital assets. In countries with transparent regulation, such as Germany or France, crypto companies can obtain a license in cryptocurrency, open bank accounts, and attract investments while complying with KYC/AML and reporting requirements.

In regions with specific cryptocurrency laws, such as the United States or Russia, the market is developing more slowly: companies risk being sanctioned, and investors face increased risks of blocking or other legal proceedings. A clear legal status for tokens and clear rules undoubtedly contribute to growing trust and capital inflows. Without regulation, the crypto market goes underground or migrates to more friendly jurisdictions.

What does the future hold for cryptocurrency?

In 2025–2026, the following is expected in the crypto space:

• Growth in the number of countries with full DeFi regulation

• A clearer division of powers between the SEC and the CFTC

• The development of international standards and data exchange

• Stronger requirements for the regulation of stablecoins

• Export of MiCA as a model for global legislation

FAQ

1. Which authority regulates cryptocurrency in the EU?
   Regulation is carried out through the MiCA directive, implemented by the national supervisory authorities of the member states.
   
   
2. What is the Ripple case about?
   The SEC claimed that Ripple sold XRP as an unregistered security. The trial became one of the main precedents for determining the legal status of tokens in the United States.
   
   
3. What are the taxes on cryptocurrencies in the United States?
   Any profit from the sale of cryptocurrencies is subject to capital gains tax. Taxation of cryptocurrencies requires mandatory income reporting.