Updated: July 25, 2025

Key Points

• The 2024–2025 period saw a high frequency of regulatory shocks in the crypto sector, and this trend is likely to continue as governments refine their approaches to digital asset oversight.

• The most impactful shocks originated in the United States, reflecting a regulatory catch-up phase that may ultimately prove transformative, given the strategic importance of the U.S. market and its investor base for global crypto businesses.

• The primary targets of these regulatory interventions were financial applications of blockchain technology – particularly derivatives, staking, and privacy-enhancing tools – highlighting the state’s focus on areas where crypto intersects most directly with traditional financial systems.

Introduction

This week, I spoke with my advisor, and the topic of possible exogenous shocks in the crypto market was discussed for academic research purposes. It prompted me to consider the use of a database that could serve research purposes. Having followed the crypto market consistently for many years and the regulatory landscape closely, it took me some effort to sift through the newsletters in my incoming emails. (Yes, sometimes signing up for those can pay off.)

Exogenous Shocks

Against the backdrop of the 2024-2025 elections, the year seemed quite active in terms of legislation regarding the regulation of the crypto market in the US. Undoubtedly, the bulk of this activity can be attributed to the natural combination of three factors: (1) the natural result of the 10+ years of slow-mowing and lingering but not urgent efforts to study and find the approach to regulating the crypto market, (2) the maturing of the crypto lobby, and (3) the critical mass of crypto ownership that presented a lucrative electoral segment.

Despite these powerful yet slow-moving changes, several specific regulatory and legal developments can serve as significant exogenous shocks for researchers studying crypto platform usage, developer behavior, and financial innovation. Below, I outline seven such events – spanning the US and EU regulatory landscape – that could be operationalized as policy dummies or event-time breakpoints in empirical work.

These events reflect shifting regulatory stances toward regional crypto markets and affect consumer, developer, and business flows. Explored one by one, they have the potential to illustrate how consumer- or platform-level behavior may be strongly mediated by institutional and legal shocks.

May 23, 2024 — Ethereum ETFs Approved by the SEC (U.S.)

Interpretation: A positive market signal that lowers barriers for mainstream financial applications to offer exposure to Ethereum via ETFs and related derivative products.

Research significance: This event may trigger shifts in fintech app behavior, particularly U.S.-based custodial apps and trading platforms, which may begin integrating ETH-based offerings. It also potentially increases user demand by reducing perceived legal uncertainty around ETH classification.

Suggested use: Exogenous positive policy shock for research on DeFi inflows, platform liquidity, or fintech–crypto integration.

July 2, 2024 — SEC Charges Consensys for Unregistered Offers (U.S.)

Interpretation: A negative regulatory signal that reinforces the SEC's willingness to scrutinize major crypto software firms, even those involved in infrastructure (e.g., MetaMask, Infura).

Research significance: This may reduce U.S. developer activity and product innovation associated with wallet infrastructure, as firms reevaluate their legal exposure.

Suggested use: Shock to innovation or user interface layers of the Ethereum ecosystem in the U.S. jurisdiction.

September 4, 2024 — CFTC Orders Uniswap Labs to Cease Derivatives Trading (U.S.)

Interpretation: A hostile signal toward protocol-level DeFi applications offering derivatives, particularly decentralized exchanges (DEXs) like Uniswap.

Research significance: Could be used to study chilled development or usage of permissionless derivatives platforms, especially in the U.S. IP space or among U.S.-based developers.

Suggested use: Downward shock to DEX activity or user engagement in specific application verticals (derivatives vs. spot).

December 30, 2024 — MiCA Regulation Takes Effect (EU)

Interpretation: A structural change in legal obligations for crypto asset service providers in the EU. May have both deterrent and harmonizing effects.

Research significance: Allows for comparative analysis across jurisdictions – do EU-based platforms increase disclosures or product standardization? Does innovation flow shift toward non-EU regions?

Suggested use: Policy implementation shock for cross-region comparative studies.

December 31, 2024 — IRS Submits DeFi Broker Rule to Congress (U.S.)

Interpretation: A negative signal for DeFi protocols by extending “broker” responsibilities to decentralized staking applications. This move imposes tax-reporting obligations on protocols that may not have the infrastructure or legal capacity to comply.

Research significance: May induce temporary halts, exits, or restructuring of staking-related DeFi apps. Also generates a clear distinction between affected and unaffected app classes.

Suggested use: Treatment dummy for staking apps in policy compliance and developer response studies.

April 10, 2025 — IRS Rule Nullified Following Legal Challenge (U.S.)

Interpretation: A reversal of regulatory pressure that lifts compliance burdens on DeFi staking protocols. Offers temporary legal reprieve.

Research significance: A clean "policy unwind" event that can be used for event-study designs to test reentry or growth following a restrictive regime.

Suggested use: Shock reversal marker to test short-term elasticity of developer behavior and platform usage.

March 21, 2025 — Treasury Delists Tornado Cash (U.S.)

Interpretation: A partial legal vindication of decentralized privacy mixers, although ambiguity remains around long-term operational certainty.

Research significance: Opens the door for renewed interest in privacy-preserving technologies, though likely under a more cautious or hybrid governance approach.

Suggested use: Policy liberalization marker for studying privacy infrastructure and related user flows.

Implications for Research

Researchers working in crypto economics, platform governance, or regulatory compliance now have a rich set of naturally occurring exogenous shocks to study behavior under policy uncertainty. These events differ in their directionality (positive vs. negative signals), jurisdiction (U.S. vs. EU), and target class (staking, privacy, derivatives, wallets, ETFs), offering substantial variation for quasi-experimental designs.

Empirical approaches might include:

• Difference-in-differences with app-level panel data

• Event studies using transaction or developer activity

• Synthetic controls comparing affected vs. unaffected regions or application classes

Extended List

If you are conducting one of the studies requiring an exogenous shock, feel free to check out the extended list of events, LINK. Continued mapping of these policy events – and their empirical ramifications – can significantly enhance our understanding of how decentralized technologies adapt in the face of evolving legal systems.