2025 J Report on global risks: the rise of cryptographic and digital assets | JS held

Introduction

Although the cryptocurrency industry is still relatively young, its adoption by various economic sectors and the evolution of technology itself develops, as well as the tokenization of assets, intelligent contracts fueled by AI and the decentralized finance (DEFI) becoming more accessible to customers. However, with all the media and the opportunities surrounding the crypto, the concerns about security, volatility and regulatory control also increases. Companies in each sector envisage the use of crypto to obtain an advantage. Even the game industry has entered the cryptographic space with bristing services offering “Play-to-Bearn” games. Anonymity is a key characteristic of the risk and success of cryptocurrency. The concept of “knowing your customer” on centralized platforms is always necessary, but anonymity attracts certain participants to challenge platforms who wish to transform at the peer to peer without third party. Anonymity also encourages criminals to use virtual currencies to carry out illicit activities and hide their profits. The other concerns that are still looming to governments include the bankruptcies of the society of cryptographic assets and the failure of 2022 of the FTX Crypto Exchange. In the United States, with the professional position of the new Trump administration, there will probably be a change compared to the previously restrictive policies that the Securities & Exchange Commission had applied. Many hope a regulatory reset as well as a more clearly defined regulation which will stimulate innovation and allow companies to flourish. The EU has evolved further in the regulation of the crypto, by promulgating regulations on the transfer of cryptographic assets in order to dissuade money laundering. EU markets in crypto-active (Mica) The law obliges any company issuing or exchanging crypto to obtain a license. From 2026, Mica will also require that the Crypto asset service providers to collect information on the sender and the beneficiary of transfers. The United Kingdom requires that any business offer a cryptocurrency to obtain authorization from the Nation’s Financial Conduct Authority. China has prohibited trade in cryptocurrencies and mining, while Japan and Canada require that cryptographic businesses register with their governments and respect anti-whiteness laws. That said, the risks and legal uncertainties abound, because the crypto is classified differently depending on the regulatory agency.

The rise of crypto and digital assets: the risks

1. Growing survey by regulators on potential fraud, based on complaints received by various agencies from around the world
2. Environmental examination on massive energy consumption of the exploitation of cryptography
3. The volatility of the market after the reduction by half of the bitcoin in 2024, which can reduce the block reward by 50%, reduce the supply of Bitcoin and lead to a price increase (the next reduction of half occurs in 2028)
4. Countries sanctioned using cryptocurrencies to bypass Western sanctions – for example:
   1. Russia
   2. Iran
   3. North Korea
   4. Venezuela
5. Handling of tokens leading to the collapse of the value of the parts – for example:
   1. Terra Luna Case – saw a loss of more than $ 40 billion in a day
6. Cryptocurrency being used as payment of criminal activity and to hide an illegal financial activity – for example, often used for payment in:
   1. Ransomware
   2. Silver whitening case
   3. Terrorist funding

The rise of crypto and digital assets: opportunities

1. The adoption of the crypto among the game and entertainment industry
2. The growing use of crypto books and blockchain technology to detach movements through various industry supply chains is improving:
   1. Traceability
   2. Transparency
   3. Efficiency
   4. Speed
   5. Security
3. Investment in systems and compliance processes due to a higher regulatory examination to come
4. Educational programs on crypto for consumers result in greater investment in cryptographic assets
5. Companies that can investigate and retrace anonymous controllers of portfolios can see a growing commitment
6. Use of cryptographic platforms as a safety net to store personal identity information from people displaced by war and similar conflicts

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