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Regulatory Uncertainty

Definition

Regulatory uncertainty refers to a lack of clear rules or guidance from authorities. This condition exists when legal frameworks or governmental policies concerning a particular industry or asset class are ambiguous, incomplete, or subject to frequent change. In the digital asset sector, it manifests as a lack of definitive classification for cryptocurrencies, inconsistent enforcement, or evolving jurisdictional stances. Such an environment creates significant challenges for businesses seeking to operate legally, hindering investment and stifling innovation. It poses substantial operational and legal risks for market participants.