Those who inhabit the cryptoasset / cryptocurrency space will be familiar with the issue that there is no international consensus on how to regulate digital assets. In the UK, these digital assets could be practically anything from unregulated assets to a form of equity, debt security, collective investment scheme or electronic money (depending on how they are structured). How the assets are characterised, and how crypto businesses interact with them, can have important consequences which may include requiring the business to be licensed.
As a result - as mentioned in the FT article quoted below - a lot of time is spent trying to identify whether a specific asset meets the current definitions of regulated investments. The difficulty is that the rules applying to such investments were not written with the plethora of digital assets that exist today in mind.
A different way to approach regulating digital assets might be to look at them from the other end of the telescope and identify the key risks they pose to the market and to consumers. For example, many crypto businesses acknowledge that money laundering is a key area of legal/regulatory risk (and there is a growing market for third parties which specialise in compliance services for these businesses). It is not impossible to imagine a more elastic framework, aligned to the common objectives of regulators and crypto businesses, under which those businesses demonstrate how they uphold standards on, for example, robust AML controls, consumer protection and transparency.
What everyone spends their time doing is trying to figure out what kind of product [the digital asset] is, so that we can understand where it fits.