All the Ways Regulators Plan to Tame Bitcoin

It took one of the wildest investment manias in history to jolt them into action, but governments around the world are finally starting to regulate cryptocurrencies. Their approaches have run the gamut, from a massive crackdown in China to an exchange-licensing regime in Japan and a largely hands-off system in Switzerland. Some countries, most notably the U.S., have yet to formulate a comprehensive strategy. But on the whole, oversight is increasing. How the rules evolve will help determine whether last year’s cryptocurrency boom was a flash in the pan, or the start of something bigger.

The list of worries is long: illegal initial coin offerings, money laundering, tax evasion, cyberthefts, exchange outages, excessive speculation and more. These risks may have been easy for authorities to overlook when Bitcoin and its peers sat on the far fringes of finance, but cryptocurrencies are moving ever closer to the mainstream. The stakes are much higher now that everyone from mom-and-pop investors to Wall Street banks are piling in. Adding to the challenge is the question of how to define cryptocurrencies, with little agreement on whether they’re currencies, commodities or something entirely new.