The first half of 2024 has been a wild ride for cryptocurrency. Bitcoin reaching a new all time high and traditional financial institutions embracing cryptocurrency through ETFs, there seems to be a positive momentum for the mass adoption for cryptocurrency. However, despite the progressive news, cryptocurrency has now seen some tough regulations being imposed as many governments become threatened by an unregulated cryptocurrency market.

How countries are cracking down against cryptocurrency

In the midst of Nigeria’s push against Binance and cryptocurrency, two Binance executives were detained by Nigerian authorities. This comes after the Naira experienced a fall of -40% against the US Dollar since the start of the year. Nigeria conducts a hunt against cryptocurrency as they believed up to $26 billion of untraceable funds left the country from a single exchange which is Binance. Nigeria then leverages Binance's KYC protocols to track down the top 100 Nigerian traders on Binance which demoralizes the population to pursue cryptocurrency.

The European Union has also extended its anti-money laundering laws and Counter-Terrorist Financing laws to cover crypto-related assets. While crypto-asset service providers have always abided by AML/KYC laws, there has been a requirement to have all transactions above the value of €10,000. While this isn’t a concern for anonymous transactions between self-custody wallets, this poses a risk for those who leverage the decentralized nature of crypto transactions due to overregulation.

The Philippines also participates in the tight regulation against cryptocurrency. In November 2023, the Philippine SEC announced a ban on Binance from 3 months then. In early March 2024, the SEC blocked the Binance website and is in the works to also ban the app. Know more about the Philippine SEC’s offensive against crypto giant Binance in a Bitdigest article.

Lastly, the United States also has its fair share of overregularization on cryptocurrency. Two notable projects that were sanctioned by the government are Samourai Wallet and TornadoCash. These two crypto-related services focused on mixing crypto assets to become anonymous and untraceable. While these services pose a certain threat to the national security of the US, this has also prompted other sectors of the US government to go on the offensive against cryptocurrency. 

These countries are one of the few examples of countries that have gone on the offensive against cryptocurrency. While the mentioned countries do not explicitly ban cryptocurrency, 51 countries have decided to not allow its citizens to buy, sell, hold, or mine cryptocurrency

How are countries cracking down on cryptocurrency?

Different governments have their own interpretation on how to regulate cryptocurrency. These methods include expanding their current AML laws, requiring strict VASP qualifications, and imposing obnoxious taxes on crypto-assets. As cryptocurrency transactions are designed to be decentralized and trustless, banks have been limiting the outflows of funds from their customer’s banks and into cryptocurrency. 

In Canada, you are required to submit a passport or government ID to the bank when making a deposit and withdrawal of up to $10,000 with cryptocurrency. Some banks also outright do not allow their customers to make transactions with cryptocurrency, making mass adoption difficult in Canada due to overregulation. The same problem persists to remain in other countries as well while countries like Mainland China and Saudi Arabia totally bans the use of cryptocurrency.

As cryptocurrencies inch their way into mass adoption, world governments are becoming wary of how decentralization will affect their economy and way of life. Countries all over the world should consider establishing proper and just regulations for the use of cryptocurrencies and blockchain technology to enable the positive benefits that these technologies bring.

‍