Why sustainability must be at the forefront of the upcoming wave of crypto regulations

The global crypto sector stands at a regulatory crossroads, and the financial world is watching closely.

That was one of the big takeaways from the World Economic Forum’s Annual Meeting 2025 in Davos, Switzerland, where experts explored how Donald Trump’s pro-crypto stance is expected to lead to new regulation in the US, which will likely prompt other leading economies to now follow suit.  

The Securities and Exchange Commission (SEC) has announced a new crypto task force, with acting chairman Mark Uyeda seeking to develop a comprehensive regulatory framework for crypto assets. The task force’s main focus will be to help the SEC establish clearer regulatory lines, create sensible disclosure frameworks, and deploy judicial enforcement processes. 

Across the pond, the UK’s Financial Conduct Authority (FCA) has also announced its intention to implement a suitable regulatory framework to help improve the ‘integrity and cleanliness’ of the crypto market, and help people make more informed financial decisions. Industry consultations will run throughout this year, with final rules expected to be put in place at some point in 2026.

As the regulatory lens tightens, it’s crucial the world’s regulators look to embed sustainability within their frameworks.

This is imperative for the healthy long-term growth of the crypto sector, and will help with rebuilding trust in the financial services space, which was a core theme of the World Economic Forum’s Annual Meeting. 

Banks and other ‘TradFi’ players need to see this alignment in action to give them more confidence in the digital assets space. It will also serve as inspiration for their wider net zero ambitions, with the traditional financial services sector so far falling short in its sustainability journey.

As regulators around the world ponder their next move, they should look to Europe as an example.

MiCA: providing a timely template 

The European Union’s (EU) Markets in Crypto-Assets (MiCA) Regulation has made waves across the digital assets landscape as the world’s first effective bespoke regulatory framework for crypto. And it includes robust sustainability disclosures.

As mandated in MiCA Article 66, MiCA-authorised Crypto-Asset Service Providers (CASPs) – including exchanges, brokerages, custodians and trading firms – that are active in the EU, or wish to provide their services in the EU, now need to have a compliant website disclosure in place covering the environmental impact of offered crypto assets.

There is work to do to help the industry get there. 

In tandem with the ‘Crypto at a Crossroads’ session at this year’s World Economic Forum Annual Meeting, we were in Davos to launch our new survey report, featuring input from the European Commission. 

We released the research at the unDavos Summit - a series of high-level industry panels that took place in parallel to the Annual Meeting - where we took part in a series of roundtables looking at how MiCA will work in practice, attended by government representatives and policy makers.   

Zumo's MiCA CASP Sustainability Readiness Assessment snapshot report highlighted a sustainability compliance knowledge gap amongst in-scope service providers. Whilst 75% consider themselves ‘very familiar’ with MiCA regulation, less than a third say they are ‘knowledgeable’ about MiCA’s sustainability reporting obligations.

Half of those surveyed also feel a lack of ready-made technological solutions are a blocker in their efforts to achieve MiCA sustainability compliance, with the same figure citing unclear regulatory requirements. 

We’re committed to helping shift the dial. We now provide MiCA sustainability indicator compliance measurement and reporting through our Oxygen product, which was introduced to help CASPs and other companies better align their digital asset activities with net zero principles. The feature will help them to more easily access MiCA-compliant sustainability metrics for their listed crypto assets.

We’ve also been working extremely hard to close the knowledge gaps that exist around MiCA, as well as helping CASPs to better understand the broader sustainability agenda, of which MiCA forms only one part. By fostering dialogue, championing actionable steps, and providing new, accessible solutions, we’re supporting the transition towards a more transparent, sustainable, and compliant crypto industry.

Getting across the line

Whilst many of the continent’s CASPs are still in the early stages of their sustainability journey, MiCA will serve to focus their minds and guide their efforts. They recognise the importance of its mandated sustainability requirements, and we will work with them to help them meet their new obligations.

In our survey, reputational damage (75%) was identified as the most significant risk of MiCA non-compliance, followed by financial penalties (69%) and regulatory sanctions resulting in lost customers or revenue (69%). Loss of customer trust (31%) was also highlighted as a notable concern. So there is much at stake.

It’s our hope that MiCA is now seen as an exemplar of how to effectively integrate sustainability considerations with regulation. 

By boosting transparency, and the reporting measures associated with the environmental impact of our nascent industry, the world’s regulators can work hand-in-hand with willing industry partners to promote the trust upon which our future rightly depends.

Our sector can then act as a beacon for financial institutions around the world as they look to act before it's too late.