On January 23, during the World Economic Forum in Davos, Binance founder CZ stated that the shift in the United States’ stance toward crypto assets is of symbolic significance and could trigger ripple effects across the broader Western financial system. Against the backdrop of changing U.S. policy signals, multiple countries and regions have begun to reassess their regulatory approaches to crypto assets, including the United Arab Emirates, Thailand, and parts of Central Asia.
Jurisdictions represented by the UAE have, in recent years, steadily advanced institutionalized regulatory frameworks for crypto assets and granted compliant platforms a range of licenses covering spot trading, derivatives, and other services. This path of “clear rules combined with cautious openness” is widely viewed as a key factor in attracting global crypto businesses and capital.
At the same time, traditional financial institutions are reassessing their views on crypto assets. In the past, some senior executives at large financial institutions publicly expressed skepticism toward crypto. Over the past year, however, institutional positions have gradually shifted toward strategies centered on “limited allocation with controlled risk.” Certain traditional funds, family offices, and financial advisors have begun to include crypto assets in broader asset allocation discussions.
Regulatory and Security Implications
Changes in regulatory attitudes are first reflected in policy language and institutional design, transitioning from an emphasis on “risk warnings and restrictions” toward “categorization and clearly defined boundaries.” This does not imply deregulation; rather, it signals a shift in regulatory objectives—from simple risk suppression to guiding industry development under controlled conditions.
For regulators, the entry of institutional capital entails higher compliance standards. Anti-money laundering (AML), counter-terrorist financing (CFT), know-your-customer (KYC), and transaction monitoring mechanisms are increasingly becoming prerequisites for institutional participation in crypto markets. Crypto assets are no longer viewed solely as highly volatile speculative instruments but are being incorporated into more rigorous compliance and oversight frameworks.
From a risk perspective, a higher proportion of institutional capital may also introduce new structural risks. Large-scale capital concentration in specific assets or protocols could amplify systemic risk, while regulatory discrepancies across jurisdictions place greater demands on platforms’ risk management capabilities. In this context, regulatory transparency and on-chain traceability emerge as critical foundations.
Industry Implications and Risk Considerations
The changes reflected at Davos are not isolated events but rather a microcosm of the crypto industry’s gradual transition into an “institutionalized phase.” The shift in U.S. policy signals provides an important reference point for global regulatory coordination, yet differences in compliance pathways, risk tolerance, and market maturity across jurisdictions are likely to persist over the long term.
For the industry, the influx of institutional capital does not equate to the disappearance of risk. On the contrary, it raises the bar for on-chain risk identification, fund flow monitoring, and cross-chain activity analysis. As compliance environments become clearer, the ability to identify potential risks within complex on-chain activities and to meet regulatory expectations will increasingly constitute a core industry capability.
In this context, continuous monitoring and risk assessment of on-chain behavior are becoming essential tools linking regulatory requirements with market operations. The development of such capabilities helps the industry maintain transparency and sustainability amid shifting global policy landscapes, and provides practical context for the on-chain compliance and risk research addressed by Trustformer KYT.