Looking back at the end of 2025, the crypto industry underwent a silent yet breathtaking "supply-side reform." This year, we didn't witness a single black swan event destroy the market, but we did see how the regulatory network evolved from "point-and-shoot" to a "global closed loop." From Brussels to Washington, from Moscow to Singapore, regulatory agencies around the world simultaneously completed a strategic encirclement: acknowledging its asset attributes, stripping it of its payment attributes, and banning its anonymity attributes. In this year we call the "Great Divergence," compliance was no longer just icing on the cake, but became the only passport to liquidity. The TrustIn team will review this history-reshaping year for you chronologically and, through these phenomena, predict the future endgame of the industry. Part 1: Timeline Recap – The Establishment of Order January: MiCA Fully Implemented, European Markets Complete “Quality Improvement” [Event] The EU’s Crypto Asset Markets Regulation (MiCA) has officially enforced its regulatory provisions for electronic money tokens (EMTs) and asset reference tokens (ARTs). The European Banking Authority (EBA) has removed more than 15 unlicensed algorithmic stablecoins and offshore USD stablecoins. [In-depth Analysis] This marks the first time a major global economy has completed a major overhaul of the stablecoin market. The historical mission of algorithmic stablecoins in the compliant market has essentially ended. The market logic has shifted from "efficiency first" to "solvency first." This has also forced global exchanges to upgrade their token listing review mechanisms—assets without Proof of Real-Time Reserves (PoR) and a clearly defined legal entity will be ineligible for entry into European liquidity pools. February: Hong Kong Sandbox Acceptance, Custody Rules Become More "Transparent" [Event] The Hong Kong Monetary Authority (HKMA) completed its sandbox test for fiat-to-stablecoin issuers, with the first batch of institutions receiving in-principle approval. The concurrently released Custody Guidelines mandate that licensed institutions implement "separate segregation of client assets" and possess daily on-chain reconciliation capabilities. [In-depth Analysis] Hong Kong's regulation has evolved to a "granular management" stage. Simply keeping money in cold wallets is no longer sufficient; regulation requires "auditable real-time performance." This marks a shift in the compliance focus in the Asia-Pacific region from "access" to "continuous supervision," with automated on-chain audit tools beginning to replace manual audits and becoming a necessity for licensed institutions. March: AI breaches KYC defenses, Lazarus group makes a comeback. [Event] According to on-chain security data, the North Korean hacking group (Lazarus Group) saw a surge in activity this month. Unlike previous attacks that exploited code vulnerabilities, this round of attacks heavily utilized Deepfake technology, successfully bypassing the video KYC verification of several second-tier exchanges. [In-depth Analysis] This is an extremely dangerous signal: Traditional KYC (Knowledge and Control) is failing. When "identity" can be perfectly forged by AI, the anchor of risk control must shift. The industry is forced to move from "static identity verification" to "dynamic behavioral analysis (Behavioral KYT)." Only by analyzing the historical trajectory of on-chain interactions and the correlation of funds can AI agents disguised as legitimate entities be identified. April: A Global Retreat of Privacy Coins [Event] Under pressure from the FATF, Dubai's VARA, Japan's FSA, and South Korea's KoFIU simultaneously tightened their policies, requiring exchanges to delist tokens with Enhanced Anonymity Capabilities (AEC) such as XMR and ZEC. [In-Depth Analysis] This is a declaration by regulators of the bottom line for "on-chain transparency." Liquidity is pragmatic; when privacy coins fail to meet AML (Anti-Money Laundering) transparency requirements, they are abandoned by mainstream capital markets. "Traceability" has officially become one of the core factors in asset pricing—untraceable funds were considered "toxic assets" in 2025. May: DeFi Front-End Regulatory Precedent Established [Event] US regulators won an enforcement action against decentralized exchange (DEX) front-end operators. The court ruled that entities operating front-end interfaces have an obligation to block access from sanctioned addresses. [In-depth Analysis] Decentralization is no longer a shield against regulation. This has directly spurred the explosion of Permissioned DeFi. Mainstream DeFi protocols have begun to integrate third-party wallet screening APIs, completing risk scanning the moment a user connects their wallet. Non-compliant addresses are kept out of the protocols. June: G7 Summit Focuses on P2P Underground Networks The G7 Finance Ministers' Communiqué specifically mentioned underground banks and cross-border illegal payment activities using USDT, calling on countries to strengthen comprehensive oversight of the OTC (over-the-counter) market. This means the regulatory battle has reached the "deposit and withdrawal" stage. For OTC merchants and P2P platforms, simply conducting KYC (Know Your Customer) is no longer sufficient to meet regulatory requirements; they must possess the ability to trace the source of funds. OTC merchants unable to prove the "cleanliness" of their funds are beginning to face large-scale freezing of their bank accounts. Part Two: Timeline Retrospective – The Legislative Breakthrough July: The US Payments Stablecoins Act Establishes Access The US House of Representatives passed the 2025 Payments Stablecoins Clarification Act. The bill breaks with the tradition that only banks can issue currency, allowing non-bank institutions to issue payment stablecoins provided they meet the requirements of a 1:1 high-quality liquid asset reserve, bankruptcy remoteness, and monthly independent audits. [In-depth Analysis] The US has finally entered the fray. The bill establishes the legal status of dollar stablecoins as an extension of the "digital dollar." For issuers, the core of competition has shifted from "yield" to "transparency." Whether Wall Street giants or small and medium-sized issuers, as long as they can provide a transparent audit report, they can obtain an equal entry ticket. August: The Chain Reaction of the OFAC Sanctions List [Event] The US OFAC has intensified its sanctions against addresses related to Russia and Iran, and for the first time sanctioned several "middleware service providers" and "coin mixing nodes" that provide technical support to sanctioned entities. [In-Depth Analysis] Long-arm jurisdiction has extended to the infrastructure layer. This leads to a serious "contagion" effect—if a regular user's funds pass through a sanctioned node in the chain, their address may be marked as high-risk by centralized exchanges. This places extremely high demands on on-chain risk control systems: they must possess multi-hop analysis capabilities to avoid false positives and false negatives. September: Tax Storm in Latin American Markets [Event] The Central Bank of Brazil, in conjunction with the tax authorities, launched a special operation targeting tax evasion using cryptocurrencies, requiring all VASPs (Virtual Asset Service Providers) to report the ultimate beneficiary information for every cross-border transfer. [In-depth Analysis] The regulatory focus in emerging markets differs from that in Europe and the United States; they are more concerned with capital controls and taxation. For payment companies serving these regions, the core pain point of compliance has become "how to quickly generate transaction reports that comply with local tax standards." October: Russia Establishes "Foreign Currency Asset" Status [Event] Russia has officially legislated to define cryptocurrencies as "foreign currency assets." Cross-border trade settlement is permitted within the regulatory sandbox, but its use for domestic payments is strictly prohibited, and strict transaction limits are imposed on intermediaries. [In-depth Analysis] This is a landmark development. It separates crypto assets from "payment instruments" and solidifies them as "financial products." This "assetization and de-paymentization" model may become the mainstream paradigm in BRICS countries. For intermediaries, this means establishing a KYT system capable of intercepting payment flows and only allowing transaction flows. November: CARF Framework Launched, Enhancing Global Tax Transparency [Event] The OECD-led Crypto Asset Reporting Framework (CARF) launched its first round of data exchange testing in 48 jurisdictions. [In-Depth Analysis] This is the final piece of the compliance puzzle. With exchange data being integrated with national tax authorities, the era of "hidden assets" is truly over. The demand for compliance cleanup and auditing of historical assets by high-net-worth individuals and institutions will surge in the coming year. December: The Final Battle and the New Order. This month's numerous major events have brought 2025 to a close and foreshadowed the direction for 2026. December 5th: Italy's MiCA Deadline (ul class="list-paddingleft-2">
Event: Italian regulators issued an ultimatum, requiring all VASPs to apply for MiCA licenses by December 30th, or they must shut down their operations and return their assets.
Analysis: The era of a simple "registration system" has ended, and the era of a strict "authorization system" has begun.
Small and medium-sized exchanges lacking compliance capabilities face involuntary exit from the market. December 9th: US SEC regulatory shift. New SEC Chairman Paul Atkins announced the launch of "Project Crypto" and plans to introduce an "Innovation Exemption" in early 2026. Analysis: This is the biggest positive turning point of the year. The US is shifting from "defensive enforcement" to "competitive regulation." Compliant projects will gain a valuable "regulatory sandbox period." December 15: The UK establishes the "Digital Assets Property Act." Event: The UK passed the Property (Digital Assets, etc.) Act 2025, legally recognizing digital assets as "property." At the same time, it was announced that a complete regulatory framework will be established by 2027. Analysis: Establishing the "property attribute" is the underlying legal foundation for institutional funds to enter the market, which is extremely beneficial to RWA (Real Asset) issuance under English law. December 22: Ghana Legalizes Crypto Trading and Announces Exploration of "Gold-Backed Stablecoins" Analysis: African countries are bypassing traditional banks and leveraging RWA tokenization to restructure their national credit and trade settlement systems. This provides a huge market opportunity for regional compliance infrastructure. Part Three: In-Depth Analysis – RWA, Tokenization, and the New Paradigm of Stablecoins In the second half of 2025, with the clarification of the regulatory framework, Tokenization and Stablecoins have become the focus of regulatory compliance. This is not only a change in asset form, but also a reconstruction of legal ownership and risk control. Tokenization – The Compliance Paradox and Solution of Asset On-Chain Assets 2025 was dubbed the Year of RWA. From BlackRock's tokenized Treasury bond fund to the Hong Kong Monetary Authority's Ensemble project, hundreds of billions of dollars of traditional assets began to flow onto the blockchain. However, this also brought about a core compliance paradox: the conflict between the "permissionless liquidity" of blockchain and the "conditional ownership" of real-world assets. If a tokenized US Treasury bond flows to a North Korean address sanctioned by OFAC, how should it be legally enforced? This is the core question that regulators questioned about issuers in 2025. Compliance Evolution: The Popularization of Compliance Standards such as ERC-3643: The industry has begun to adopt token standards with embedded compliance logic on a large scale. These standards require that tokens must first query an on-chain identity registry every time a transfer function is called. The transfer will only succeed if the recipient passes KYC/KYT verification. The "Walled Garden" of the Secondary Market: RWA assets no longer pursue overall network liquidity, but are limited to "whitelisted liquidity pools." Trustin observes that an increasing number of RWA issuers are requesting direct integration of KYA (Knowledge, Address) oracles at the protocol layer to ensure that assets never fall into blacklisted addresses, thereby guaranteeing the "legal finality" of the assets. Stablecoins – From “Chips” to “Settlement Layer” In 2025, stablecoin trading volume surpassed Visa for the first time and gained a significant share in cross-border trade settlements, especially B2B payments. Regulators are “banking” stablecoins and forcibly splitting them into two categories: Payment-type stablecoins, such as compliant USDC/USDT. The regulatory focus is on 100% guaranteed redemption and anti-money laundering. For these assets, the core challenge for regulators is "visibility of fund flows"—that is, proving not only that the money is in the treasury, but also that the circulating currency has not been used for terrorist financing. Yield-generating stablecoins: The regulatory logic is close to "securitization management." In 2025, several stablecoin projects attempting to distribute dividends to holders were halted by the SEC. Conclusion: Stablecoins have evolved into the "underlying settlement protocol" of global finance. For payment companies and OTCs, the ability to distinguish between these two attributes and provide penetrating tax and AML reports for "payment-type stablecoins" is a prerequisite for handling international trade funds. 2026 and Future Outlook – The Era of "Embedded Compliance" If 2025 was the "physical implementation" of regulations, then 2026 will be the "chemical reaction" of compliance. We believe the industry will experience profound qualitative changes in three dimensions. 1. From "Post-Event Accountability" to "Embedded Compliance" Past anti-money laundering efforts were passive: A transaction occurred -> Money laundering was discovered -> Accounts were frozen -> Fines were imposed. Future anti-money laundering efforts will be proactive: A transaction is initiated -> Smart contracts call compliant oracles -> Risk is deemed too high -> The transaction is directly reverted (rolled back/rejected). Outlook: Compliance will be codified. Regulatory rules will be written into smart contract logic. Transactions that fail KYT checks may not even be recorded on the blockchain. This will completely eradicate money laundering risks, but it also requires market participants to connect to a real-time compliance network. 2. The Integration of the Unified Ledger with Public Blockchains The Bank for International Settlements (BIS)'s concept of the Unified Ledger will enter the practical stage in 2026. Outlook: We may see the rise of a "hybrid chain architecture". Bank and central bank CBDCs operate on permissioned blockchains but interoperate with compliant RWA assets on Ethereum/Solana via cross-chain bridges. In this architecture, "cross-chain compliance proof" becomes crucial—assets must carry a "clean origin" document when crossing from a public blockchain to a bank's consortium blockchain. 3. Strong Binding of Identity and Assets (Identity-Bound Assets) The era of "anonymously holding high-value assets" is over. Outlook: Web3 is introducing Verifiable Credentials (DIDs). Future wallets will no longer be just public key hashes, but containers containing a series of verified labels such as "KYC verified," "non-sanctioned region," and "accredited investor." TrustiIn predicts that by the end of 2026, mainstream DeFi protocols and RWA platforms will refuse to interact with "naked wallets" that lack any "credential labels." Conclusion The wheels of history roll ever onward, and 2025 will be remembered as a turning point: Crypto is no longer a lawless zone, but has become a more transparent and efficient legal domain. In this new era, tokenization provides asset liquidity, stablecoins provide a value anchor, and compliance forms the cornerstone of trust. For all institutions committed to long-term development, embracing compliance is no longer an option, but a necessity.