Last winter, I found myself at a dinner party in the city. It was a mixed crowd, by which I mean people who understood my work, those who didn’t, or those who were skeptical of it. I’m a crypto lawyer and policy advocate, so I’m used to questions like: Are you a lawyer for Bitcoin? And do you even use a bank?

The a16z crypto Regulatory Update is a series that highlights the latest crypto regulation and policy happenings relevant to builders in web3 and crypto, as tracked and curated by the a16z crypto regulatory team. The roundups are based on recent news, the latest updates, new guidance, ongoing legislation, and frameworks released by regulatory agencies/bodies, industry consortia and professional associations, banks, governments, and other entities as they impact the crypto industry (or applications) around the world. We also occasionally include select other resources such as talks, posts, or other commentary – from us or from others – with the updates.

2023 inflows 2.7x greater than 2022, Bitcoin the main benefactor

The European Banking Authority (EBA) is increasing its efforts to assess the potential impacts of strains in non-bank financial institutions (NBFIs), including those related to crypto assets. EBA Chair José Manuel Campa expressed concerns over contagion and the need to understand the interconnectedness between banks and various financial entities. The move reflects a proactive stance by regulatory authorities to enhance the resilience of the financial sector against emerging risks, particularly in the evolving landscape of digital assets and cryptocurrencies. The evaluation of indirect links between banks and NBFIs seeks to enhance regulatory measures and fortify the financial system against potential vulnerabilities.

1.FTX Founder Sam Bankman-Fried Will Not Face Second Criminal Trial, Federal Prosecutors Say

A year ago, when I wrote Has Crypto Failed, I was making notes for myself. It was written after a year of fraud had created market turbulence. FTX had filed for bankruptcy a few months after acquiring a former employer. I didn’t know what to do with my life and career. So, I wrote to find answers while taking long walks back home. Little did I know that this would set the stage for a year of writing stories and building alongside founders.

Autonomous World has established itself as one of the interesting narratives in the blockchain space. As a narrative, it centers around an aesthetic that appeals to critics of various artistic mediums and a group of playful technologists. It is buzzing with multidisciplinary energy. To date, I believe the community behind the narrative has roughly agreed that the ultimate goal of autonomous world is to enable “multiplayer storytelling in permissionlessly expandable and moddable Warcraft-like virtual world built on a credibly neutral computing substrate”. Some practitioners of this narrative promote a simplified version of the vision: to run World of Warcraft on a credibly neutral computational substrate, preferrably in Greater Ethereum City. Perhaps we can call this world the Autonomous World of Warcraft, or AWoW. The appeal for building AWoW is that no attribute of any item or character is subject to changes by a single powerful entity such as the game operator company, and that any developer can fork, extend, and mod the whole or parts of the AWoW codebase permissionlessly. This dream is exciting in its own right, but it’s not my dream.

1.The U.S. SEC requires Bitcoin spot ETF issuers to confirm authorized participant information in the next update application

Bitfinex analysts stated that, in the case of historical corrections and market fluctuations, the potential market value of the cryptocurrency economy will increase to $3.2 trillion. The latest Bitfinex Alpha report states that the cryptocurrency fear and greed index has turned to "extreme greed," indicating that Bitcoin is at a high point in the middle of a bull market and that the market is in a vibrant stage.

In the Wednesday edition of Fortune Crypto, Leo Schwartz discusses the current state of policy and regulation in the crypto industry. Despite ongoing debates in D.C. about the efficacy of blockchain technology, law enforcement agencies have found success in using blockchain tracing to bust crypto crime. A new survey from TRM Labs found that over 40% of offenses investigated by law enforcement agencies involved cryptocurrency, with the number expected to rise to 51% by 2027. While the industry awaits the approval of a BlackRock-sponsored Bitcoin ETF, blockchain analytics remains one of the few clear applications for crypto in the coming year.