The whispers are growing louder. Crypto regulation is coming. Who is it really for? Who will it hurt? We’re starting to see headlines like “SEC joins forces with top hedge fund managers” and “SEC takes aim with new targeted enforcement at fraud." Are these protections truly designed for the fast-growing Web3 context in Southeast Asia? Or will they end up killing the very innovation they seek to protect? I’m afraid it’s the latter, and here’s why.

Local Dreams, Global Rules?

In particular, an aspiring young Indonesian artist no longer needs to go through the traditional gatekeepers. She uses NFTs to sell her digital art directly to collectors all over the world. Or a Filipina developer creating decentralized apps that use blockchain tech to deliver microloans to farmers, avoiding exploitative lending models. These are not hypotheticals. This is the exciting reality of Web3 in Southeast Asia. This is a global explosion of creativity and economic empowerment, made possible by the democratic promise of decentralization.

So what do we really get when regulations conceived in Washington or Brussels are applied lock, stock, and barrel to this ecosystem? Or what occurs when the cost of compliance gets so burdensome that only the biggest players can afford to play the game? These regulations tend to prioritize Western financial mechanisms. Sadly, with this static approach to regulation, they are choking the very innovation they want to foster.

Southeast Asia isn't Silicon Valley. Our financial landscape is different. Barriers to access this traditional banking method are increasingly high, particularly in rural communities. Crypto provides the lifeline, the opportunity to join the global economy without reliance on intermediaries to which he has no access. It’s a place where any kid with an internet connection has the potential to create the next unicorn. Heavy-handed regulation threatens to slam that door shut.

Forgotten Voices, Silenced Art?

Think about the implications. Stricter KYC/AML requirements, while necessary to combat illicit activity, can be incredibly burdensome for individuals in countries with limited access to formal identification. Now, all of a sudden, artists who were once able to unfetteredly create and sell their work are shut out of the market. Developers are put in the impossible position of choosing between compliance and innovation.

We should not allow Web3’s potential in Southeast Asia to be choked in its infancy. We need to demand that regulators listen to the voices of those who are building this future, not just the established players with deep pockets.

We interviewed David Tutor, a former SEC Senior Counsel, to get his perspective regarding where the SEC is likely to focus. His experience has proved invaluable. Do remember that his view is heavily shaped by his experience with the confusing and frustrating US regulatory environment. This is why we require Southeast Asian voices around the table, guiding the discussion on regulation, and advocating for community-centered outcomes.

Art, and especially digital art, is a form of social commentary that can be tremendously effective. For one thing, it’s extremely provocative in thought and action. When rules are too tight, there’s no room for imagination. They can stymie artists leveraging Web3 to raise their voices and fight for change. Think back to the anger and outrage that arises when governments attempt to censor art. It’s the same battle, though, just on a different front.

A Call For Inclusive Regulation

As the news has full well conveyed, the Trump administration will usher in a new era of cryptocurrency regulation. Will those changes actually propel more innovation? Or will they just bury the newfound creative potentials of Southeast Asia?

It’s time that we realized that this debate isn’t only about protecting investors. It’s about protecting innovation. It’s part of building a long-term positive future where Southeast Asia is at the forefront of the Web3 revolution. We cannot allow fear and uncertainty to guide our decision-making. Instead, we should recognize and reward creativity instead of letting regulations continue to kill it.

  • Proportionate: Taking into account the specific risks and opportunities of the Southeast Asian market.
  • Inclusive: Ensuring that artists, developers, and entrepreneurs from all backgrounds have the opportunity to participate.
  • Transparent: Providing clear guidance and support to help businesses comply with the rules.

We cannot allow the hope of Web3 to turn into yet another case of Western hegemony stomping out local aspirations. Speak up. Share this. Demand inclusive regulation. The creative Web3 boom happening in the region’s future may very well rest on it.

Don't let the promise of Web3 become another example of Western dominance crushing local dreams. Speak up. Share this. Demand inclusive regulation. The future of Southeast Asia's creative Web3 boom depends on it.