Cryptocurrency Legal Regimes: State Policies and Regulatory Directions

This work explores the legal framework governing cryptocurrencies and their regulatory directions. It defines cryptocurrency and explores classification options in global practice. The legal definition of cryptocurrency in the context of civil law, financial, and criminal law is examined. The challenges in forming a legal regime for cryptocurrencies are outlined, including the application of national laws, defining and classifying cryptocurrency, anonymity, cross-border issues, security, money laundering, and mining. Legal structures and mechanisms that can mitigate negative aspects associated with cryptocurrency and stimulate positive developments are analyzed. Different regulatory attitudes toward cryptocurrencies are considered, ranging from non-regulation, control, rule creation, to the establishment of CBDC. The legal means of the regime, including prohibition, restriction, and regulation, are discussed. A brief overview of countries that recognize or ban cryptocurrency is provided. Detailed examinations of the legal regimes in the European Union, the United States, Hong Kong, China, and Russia reveal their similarities and differences. The paper identifies three main models of legal regimes: liberal, balanced, and conservative, noting that the latter two are based on a risk-oriented approach aimed at preserving the balance between protecting innovation, investors, and the state in one, and primarily state interests in the other, which leads to an over-assessment of risks. The study identifies global trends and national specifics in the regulation of cryptocurrencies within state policies, including de-anonymizing transactions, implementing technological standards, prioritizing supervision of popular stablecoins and DeFi platforms that may involve money laundering schemes, developing standards for friendly banking, and an «experimental» regulatory mode for sanctioned countries, among others.