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18 Wash. U. Global Stud. L. Rev. 457 (2019)
Why China Had to Ban Cryptocurrency but the U.S. Did Not: A Comparative Analysis of Regulations on Crypto-Markets between the U.S. and China

handle is hein.journals/wasglo18 and id is 469 raw text is: WHY CHINA HAD TO BAN CRYPTOCURRENCY BUT THE U.S. DID NOT: A COMPARATIVE ANALYSIS OF REGULATIONS ON CRYPTO-MARKETS BETWEEN THE U.S. AND CHINA INTRODUCTION The cryptocurrency market grew from a $1.5 billion market capitalization in early 2013 to over $795 billion in January 2018.' Bitcoin, an exemplar cryptocurrency, gained value from $0.08 before 2010 to over $17,000 per bitcoin in December 2017.2 While cryptocurrencies have campaigned for revolutionizing financial transactions, the crypto-market is plagued by nefarious minds, fleecing investors in frauds and Ponzi schemes.3 This crypto-mania therefore presents numerous legal and regulatory challenges that demand prompt and efficient responses. Nevertheless, the decentralized, anonymous nature of cryptocurrencies magnifies these challenges and has constantly outpaced the law's ability to respond. To understand the effects of different regulatory strategies, this Note compares regulatory landscapes on cryptocurrency between the U.S. and China. In a nutshell, while China explicitly banned any exchange or financing activities between fiat money and coin substitution in 2017, the U.S. has placed cryptocurrencies within its existing legal labyrinth. What explains the difference and what is its result? Rather than reducing the regulatory 1 Global Charts - Total Market Capitalization, COINMARKETCAP, https://coinmarketcap.com/charts/ (last visited Jan. 11, 2018). 2 Blu Putnam & Erik Norland, Bitcoin and Gold: A Growth Comparison, OPEN MARKETS (Nov. 27, 2017), http://openmarkets.cmegroup.com/I 2749/bitcoin-gold-growth-comparison; Stan Higgins, From $900 to $20,000: Bitcoin's Historic 2017 Price Run Revisited, COINDESK (Dec. 29, 2017), https://www.coindesk.com/900-20000-bitcoins-historic-2017-price-run-revisited/. 3 Ted Knutson, Cryptocurrency Fraud Widespread, Warns Regulator, FORBES (Apr. 10, 2018), https://www.forbes.com/sites/tedknutson/2018/04/1 0/cryptocurrency-fraud-widespread-wams- regulator/#6b59a3cc6b06; see also infra notes 41-47. 457

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