Same activity risk refers to the principle that identical financial activities should face consistent regulation, regardless of the entity performing them. This regulatory principle advocates for applying the same rules to crypto firms offering services comparable to traditional financial institutions, such as lending, trading, or asset management. It aims to prevent regulatory arbitrage, where entities exploit differing rules to gain an unfair advantage or avoid oversight. The objective is to maintain a level playing field and ensure consumer protection and financial stability across both traditional and digital asset markets.
Context
The “same activity, same risk, same regulation” principle is a central theme in global discussions about digital asset oversight. Debates often focus on how to accurately categorize and compare crypto activities with existing financial services, given the novel aspects of blockchain technology. Regulators are increasingly applying this framework to bring various decentralized finance (DeFi) protocols and crypto exchanges under existing financial laws. This approach is a key driver for future regulatory actions and the integration of digital assets into the broader financial system.
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