Global Experts Call for Collaborative Action to Establish Global Regulations for the Cryptocurrency Sector
In a bid to curb the rising tide of crypto-related fraud, countries worldwide are increasingly aligning with global regulatory standards. This shift towards international cooperation is evidenced by several significant initiatives, as highlighted in Singapore's recent crackdown on crypto money laundering, which suggests a growing trend towards global regulation of cryptocurrencies.
The Financial Action Task Force (FATF), a global anti-money laundering body, has been at the forefront of these efforts. In 2019, the FATF expanded its Travel Rule to include cryptocurrencies, requiring virtual asset service providers (VASPs) to share transaction data. By 2025, 73% of jurisdictions had implemented this rule, significantly enhancing compliance and reducing fraud. The FATF also focuses on stablecoins and Decentralised Finance (DeFi), addressing systemic risks and pushing for regulatory clarity to prevent illicit activities.
Regulations include licensing and registration, anti-money laundering (AML) and know-your-customer (KYC) policies, and consumer protection measures to ensure investors are informed and safeguarded against scams. These regulations aim to reduce financial crime risks, ensure market stability, and protect investors.
In Malaysia, the extent of crypto-related investment scams has been alarming, with over RM200 million in losses across 4,000 cases in the past five years. However, there is limited recent information available on Malaysia's specific regulatory actions regarding crypto fraud prevention. It is likely that Malaysia, like other countries, is aligning with global standards such as FATF recommendations.
Singapore, on the other hand, has been actively involved in creating a favorable regulatory environment for digital assets. Crypto firms in Singapore are required to register with the Monetary Authority of Singapore (MAS) and comply with AML/KYC regulations. Singapore's approach emphasizes transparency and investor protection, aligning with global efforts to curb crypto-related fraud.
The United States is also actively working on regulatory frameworks for cryptocurrencies. Discussions focus on clearer guidelines for digital assets, which would help in preventing fraud and ensuring compliance. The U.S. regulatory bodies, such as the Securities and Exchange Commission (SEC), are focusing on enforcement actions against non-compliant crypto entities and scams.
Additional initiatives include Australia, which introduced a Scam Prevention Framework in early 2025 to combat scams, though it has not yet been designated for the crypto sector. Australian banks have taken measures to limit fiat payments to crypto exchanges. There is also a growing trend of international cooperation to address crypto fraud through shared standards and regulatory frameworks, ensuring a cohesive global response.
The need for effective regulation of the cryptocurrency market is a concern shared by both local figures like Vincent Fong and international bodies like the U.S. Treasury. Fong, a prominent figure in Malaysian cryptocurrency, is advocating for inter-agency cooperation to establish more effective regulations for the crypto market. The U.S. Treasury framework suggests collaboration among various agencies to control the borderless nature of cryptocurrencies.
The study in the Journal of Financial Crime (2023) suggests that collaborative regulation can decrease crypto fraud by up to 30%. The research paper questions the idea that the anti-regulatory nature of crypto cannot be controlled, emphasizing that crypto fraud can be controlled through effective regulation and cooperation. Fong suggests that Malaysia should use similar measures to fight the increasing risks to crypto regulations.
In conclusion, the global regulatory landscape for cryptocurrencies is evolving rapidly, with countries implementing international regulatory initiatives by enforcing AML/KYC policies, requiring licensing, and enhancing consumer protection measures. Each nation's approach reflects a commitment to aligning with global standards to prevent crypto fraud effectively. The alarming rise in crypto fraud in Malaysia has made it crucial to introduce regulation in the market.
- The Financial Action Task Force (FATF) has been advocating for global regulations of cryptocurrencies, focusing on stablecoins and Decentralised Finance (DeFi), aiming to address systemic risks and ensure regulatory clarity to prevent illicit activities.
- In the United States, regulatory bodies like the Securities and Exchange Commission (SEC) are working on creating clearer guidelines for digital assets to prevent fraud and ensure compliance.
- Singapore, known for its favorable regulatory environment, requires crypto firms to register with the Monetary Authority of Singapore (MAS) and adhere to anti-money laundering (AML) and know-your-customer (KYC) regulations, promoting transparency and investor protection.
- The Journal of Financial Crime (2023) published a study suggesting that collaborative regulation can decrease crypto fraud by up to 30%, reinforcing the importance of effective regulation in combating fraud in the cryptocurrency market.
