Photo illustration: Aïda Amer/Axios. Photo: Courtesy of Goodwin.
The world of crypto runs 24/7 and has no borders, but it's no monolith. The rules, however, might be applied that way. And that creates a challenge.
The big picture: "Law is jurisdictional, but crypto is not," Mitzi Chang, a partner at Goodwin, who also serves as co-chair of its fintech practice and digital currency and blockchain technology practice, tells Axios.
Driving the news: The Financial Stability Board (FSB), the global watchdog aiming for consistent application of crypto rules, last week proposed an international framework in an effort to "promote the consistency and comprehensiveness of regulatory, supervisory and oversight approaches."
Why it matters: While it's uncertain whether the FSB's proposal would lead to any meaningful change in each country's independent efforts to create rules, it's noteworthy that they care at all.
Context: Indeed, when the FSB references the year's "turmoil," the collapse of Three Arrows Capital, Terra, and other events come to mind.
Details: The FSB's framework was grounded in "same activity, same risk, same regulation.”
Between the lines: To Chang, those words were evocative of Gensler's stance that existing securities laws should apply to crypto.
Flashback: Recall Chair Gensler's recent speech referencing Joseph Kennedy and the advent of the SEC back in the early 1930s.
Yes, but: As influential as the FSB is as an advisory group, there is no regulatory or enforcement authority that would make sure their recommendations are heeded.
What's next: Several members of the G20 group are already putting together their own rules for digital assets and could have them finalized before the FSB finalizes their own guidelines.
Crypto firms pick and choose the jurisdictions to operate in, now, but consistency is likely to be welcomed by the industry.
The intrigue: Countries could try to nurture industry growth, though, which could mean more relaxed rules in some areas versus others.
Bottom line: That's the rub. "It’s hard to affect change if everybody doesn’t participate," Chang said.
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