It's no secret that there's an argument for regulating the crypto space. 

For starters, the collapse of TerraUSD, one of the largest algorithmic stablecoins, sent shockwaves across the world. The token it was backed by—Luna—saw its market value drop by over 98% in just one day, which cost the market about $40 billion. You also can't forget the multiple claims of money laundering transactions that happen on the blockchain.

These data points support the idea that regulatory intervention is needed to protect investors from losing more money to the rise of decentralised finance or "DeFi". 


Key takeaways:

  • The frequency of crypto market crashes, failed stablecoins, and money laundering claims through crypto has led to calls for regulation in the crypto space.

  • Historically, this won't be the first time decentralised finance will be regulated. However, regulators must answer one question: Who is responsible for regulating cryptocurrency? This question stems from the ambiguity of crypto—being a currency and security. 

  • Therefore, for regulation to happen—and efficiently, regulators must first correctly define what crypto is and look to history to know how and when to step in


But it's not so clear cut.

On the one hand, there is agreement that many crypto investors have been victims of this burgeoning ecosystem. As such, regulators worldwide now feel the need to step in