World Economic Forum denounces crackdown on crypto in US

Creating clarity in dealing with cryptocurrencies requires internationally coordinated harmonization of regulations, the WEF said. "Regulation by enforcement" - an approach taken by U.S. authorities - is "not recommended" in this regard.

The World Economic Forum (WEF) has issued a document published with reviews and recommendations for regulation of cryptocurrencies.

The 34-page letter aims to promote global coordination of crypto-regulation.

US regulators' approach is viewed with skepticism by the WEF, according to the paper: "This approach is not recommended to provide a framework because 'regulation by enforcement' precludes any meaningful discussion of what should and should not be regulated."

Because of the crackdown by the U.S. Securities and Exchange Commission (SEC), experts are warning of a possible crypto exodus from the United States.

According to the WEF, one of the biggest construction sites is the lack of taxonomy and classification of cryptocurrencies. The paper concludes that regulation is urgently needed and cross-border cooperation is the key.

The WEF also recommends international harmonization in law enforcement. "Lack of coordination among different law enforcement agencies leads to inconsistent enforcement and inconsistency in regulatory approaches," the paper says.