Strong Start for Potential Tighter Crypto Regulation in 2024

Many people are likely to be optimistic about the future of the cryptocurrency sector because of the verdicts of the previous year, the possibility of the approval of a spot bitcoin exchange-traded fund, and the overall rise in the market. Nevertheless, it is very improbable that lawmakers and regulators will allocate fewer resources to crypto-related complications too.

This is already playing out, especially in the realm of online gambling and crypto derivatives.

Taiwan’s Elections

The presidential elections in Taiwan will take place on January 13, 2024, and the government has issued a caution against using bitcoin betting sites to speculate on the results. Many locals in Taiwan have been reportedly betting on the next presidential election on the decentralized website Polymarket. Several people have already been called in for questioning, according to reports, which suggest that the investigation is still underway.

It is against the law to engage in gambling activities associated with Taiwanese elections, since it might be a violation of Article 88-1 of the Election and Recall Act. Such an infraction entails a punishment of up to 100,000 New Taiwan dollars (about $3,188) or six months in jail or detention.

An Ongoing Concern

Taiwan’s elections are not the first time that the operator has found itself in the spotlight. Polymarket, in a related matter, ran into regulatory obstacles in the United States in 2022.

The platform was subject to legal action in January 2022 by the Commodity Futures Trading Commission (CFTC), a New York-based regulatory agency. Platform operators faced allegations from the CFTC that they ran an “illegal unregistered or non-designated facility” from June 2020 forward.

Despite these regulatory hurdles, Polymarket had robust trading activity throughout the 2020 US election, with a new volume record-breaking $10 million.

What Now?

The cryptocurrency sector is looking forward to a busy and promising year ahead. Market players often face the significant challenge of regulatory compliance when navigating the crypto derivatives landscape, since laws differ greatly by jurisdiction. Can this change?

We may anticipate the SEC to approve its first batch of spot bitcoin ETFs shortly after the new year of 2024, which would encourage large institutional investors to pour millions into the cryptocurrency market. This means word of the approvals might potentially pique the public’s interest in virtual tokens, bringing them out of the financial shadows and into the spotlight. Similarly, in late 2024, the European Union’s (EU) crypto regulatory framework, MiCA, will also eventually be put into action.