Regulation is Here.

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The Regulation that Matters ❗️ 

Regulation has been a persistent issue for the cryptocurrency industry.

Indeed, detractors use ‘unregulated’ as a term to discredit this nascent technology, and have done so since Bitcoin began making headlines in 2017.

That’s not to say that crypto should not be regulated, but it’s a point I have always found perplexing when speaking to people who actively dislike crypto as an industry, or as a concept. (And trust me, I have had hundreds of these conversations.)

In the last 12 months, however, the “crypto is a scam” mantra that many have donned throughout the years is dying, if not dead. And it has been for a while.

That’s not to say that there will not be more crypto scams (there most definitely will be), in the same way that nobody can confidently say that AI will not be used for scams, for example.

To paint a better picture, let’s rewind to late 2022.

FTX had just been exposed in a huge scandal. One of, if not the biggest, in crypto’s short history.

The European Central Bank saw this as a chance to strike.

On the 30th November 2022, they titled a blog post ‘Bitcoin’s last stand’ in which they wrote:

“….since then, the value has fluctuated around $20,000. For bitcoin proponents, the seeming stabilization signals a breather on the way to new heights. More likely, however, it is an artificially induced last gasp before the road to irrelevance – and this was already foreseeable before FTX went bust and sent the bitcoin price to well below USD16,000.”

In the same post, they went on to say:

“The current regulation of cryptocurrencies is partly shaped by misconceptions. The belief that space must be given to innovation at all costs stubbornly persists. Since Bitcoin is based on a new technology - DLT / Blockchain - it would have a high transformation potential. Firstly, these technologies have so far created limited value for society - no matter how great the expectations for the future. Secondly, the use of a promising technology is not a sufficient condition for an added value of a product based on it.”

In hindsight, central bankers saying this should have been seen as validation. Validation that this is incredibly disruptive technology.

Interestingly enough, EU parliament adopted MiCA in April 2023, just a few months after the FTX collapse (and the article above), with implementation 18 months following that date in December 2024.

Whilst it has some critics, it outlined some rules, giving crypto businesses operating in Europe clear guidelines.

These included:

(1) Requiring a license from a national regulator if you offer crypto services

(2) Stablecoins having sufficient fiat backing, and requiring sufficient authorisation from regulators

(3) Crypto projects must publish a detailed whitepaper before launching a token

(4) Bans insider trading explicitly, ensures adequate risk labelling and allows users to complain with the potential to get compensation

MiCA does not cover NFTs, DeFi protocols or cryptocurrencies like Bitcoin or Ethereum themselves.

This then put pressure on other regulators to get moving with their versions of MiCA.

In April 2025, the FCA in the UK published draft legislation for cryptoassets, intending to formalise this in 2026.

And most notably, this week just gone, the U.S, by far the biggest crypto market in the world, has passed the GENIUS Act, and approved the Crypto Market Infrastructure bill.

The GENIUS Act, most pertinent due to the ongoing explosive growth in stablecoins globally. 98% of the stablecoin market is pegged to the U.S. dollar, currently.

Quoting Simon Taylor in a recent edition of Fintech Brainfood:

“We’ve reached the limits of how much technology can transform the ageing legacy infrastructure into something new. Stablecoins and the GENIUS Act represent the single largest new policy and regulatory development in financial services since Dodd-Frank of 2010”

Why it Matters to Sports ⚽️ 

Crypto sponsors in sports are not going away.

And again, this all goes back to FTX.

They were a huge sponsor of sports properties across the world.

And the collapse was a huge accelerant to global regulation.

This matters to sports because, optically, their partners being regulated and compliant, rather than offshore, is preferred.

Similarly, prediction markets are also seeing increased mainstreaming, especially in sports event markets.

There is a spectrum of compliance here, with Polymarket being ‘offshore’ and Robinhood, Crypto[dot]com and Kalshi being onshore, regulated by CFTC, prediction market products.

Again, their skew to sports interest outside of election seasons joins this product at the hip to the sports industry.

Then, there are NFTs.

In August 2024, DraftKings made headlines by shutting down their then-successful NFT fantasy game ‘Reignmakers’, citing ‘recent legal developments’.

Dapper Labs, Sorare and other platforms have also been under regulatory scrutiny over the past 12-18 months.

And whilst NFTs are not overtly regulated via any current legislation (MiCA, GENIUS) — there is an anticipation of when, not if, they are brought under an umbrella, or regulated respectively.

Regulators have to balance consumer safety with allowing for innovation, and many sports properties and platforms so far have felt that the grey areas have been very difficult to manoeuvre.

What is categorically regulated now is the stablecoin industry, and I think in the next 2-3 years, this could have a very big impact on the sports industry.

Payments can be complicated in the sports industry:

1) Cross-border payment needs and paying multiple parties in one transaction (Think football transfers or a contract renewal brokered by an agent)

2) Federations or Players Associations paying out globally to their members

There are numerous other examples, but in short, payments are really difficult across multiple entities and individuals. Cross-border, smart contract-enabled, programmable money might be a way to solve that.

Analysis 🧠

The lack of regulation in major markets so far has been a huge hindrance to the development of almost anything blockchain-enabled in sports.

At the start of the year, in my 2025 predictions, number 3 was:

Regulatory Clarity Provides Sports Teams with a Path Forward in Web3

Within that, I wrote:

“This is probably the most important thing that will happen in 2025. A lot of sports teams and leagues have wanted to do stuff in this space but have been stopped in their tracks by regulatory uncertainty.

This isn't to say that regulation is bad and has inhibited sports teams. But when you see, for example, the SEC attempting to enforce laws by going and suing crypto businesses in the US, you can understand that general counsels at sports teams and leagues have created more caution inside their walls.

Now that we are seeing that there is going to be regulatory clarity predominantly in the West, whether it be the US, Europe or UK, and we've already seen pretty progressive crypto regulatory frameworks in the Middle East and Asia, I think that globally, we're going to be in a much better space in 2025 when it comes to how comfortable sports teams and leagues are in taking risks here.”

This wasn’t an outlandish prediction, but I have heard so many times from rights holders themselves that they have taken something right to the wire — and it hasn’t gone to market due to legal sign-off. There is a trade-off here between upside and what the downside is from a legal perspective, particularly for U.S sports properties, and how much higher the likelihood of being sued is.

I’ve heard, first and secondhand, of dozens of properties that have had to row back propositions due to legal complications, or because they were not comfortable with the risk. What does this look like if the rules are clearer?

Concluding Thoughts 💭 

(1) Sometimes decades happen in days

In November 2022 FTX collapsed.

Shortly afterward many thought the crypto industry was done for.

Even as recently as last year, the SEC has several crypto firms in their crosshairs.

Fast forward 12 months and crypto legislation has been passed in the U.S.

These things can move really quickly, something the sports industry does not typically do.

(2) Regulation is no longer an excuse

Regulation has until now been seen as an excuse, especially for finance firms. I’ve seen that in sports as well.

That is changing, and will continue to do so as more regulation comes to the fore.

(3) Clarity allows teams and leagues to innovate

As mentioned, many teams and leagues have had to rework, or row back, partnerships and activations with crypto companies because they were not comfortable with the legal risk. Particularly in the U.S, I think this risk tolerance will recalibrate.

More Sports & Web3 Stories

• Polymarket Investigations Dropped by Justice Department, CFTC (Read more here)

• STEPN GO and the AFA extend their partnership (Read more here)

• Chiliz Unveils Second Edition of Includ3d Accelerator (Read more here)

• MMA[dot]INC Announces Blockchain and Artificial Intelligence Crypto Rewards Platform (Read more here)

• Nevada Gaming Control Board say Crypto[dot]com sports contracts not preempted by federal regulation (Read more here)

General ‘Stuff’ that Could Impact You

• Crypto Market Cap hits $4 Trillion for the first time (Read more here)

• Pudgy Party Set For Imminent Release on iOS and Android (Read more here)

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