Regulatory pressure in crypto is no longer a background concern. For Yuliya Barabash, founder of consulting firm SBSB Fintech Lawyers, it is now one of the defining forces shaping which companies survive the industry’s next growth phase.
In an exclusive interview, Barabash argued that the firms investing most heavily in compliance and licensing are positioning themselves to capture institutional capital at scale, while loosely regulated platforms are steadily losing relevance.
FTX Changed the Calculus
“The game completely changed after FTX and Celsius collapsed, exposing just how badly customer funds were being mismanaged,” Barabash said. Those failures were not just business scandals. They triggered a coordinated global regulatory response that is still accelerating.
Before those collapses, much of the crypto industry operated in jurisdictional gray zones. Exchanges launched rapidly, tokens crossed borders with minimal oversight, and regulators moved slowly enough that companies rarely felt constrained. That window has closed.
Authorities began focusing sharply on transparency, investor protection, and anti-money-laundering frameworks. For crypto businesses, operating without a clear regulatory footprint became increasingly difficult.
Institutions Are Now Selective
The institutional investor landscape has shifted noticeably since 2021. Large capital allocators now prioritize licensed exchanges, regulated infrastructure, and platforms with defined legal frameworks. They want operational clarity before committing funds.
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This selectivity is creating a visible divide. Compliant, licensed platforms are attracting serious institutional interest. Platforms that avoided that investment are finding themselves on the outside of deals that matter.
For Barabash, this is not a temporary trend. It reflects a structural change in how professional investors evaluate crypto counterparties.
MiCA and the European Framework
Europe’s Markets in Crypto-Assets regulation, widely known as MiCA, represents one of the most significant regulatory developments in recent years. The framework introduces consistent rules for crypto firms operating across the European Union, replacing the patchwork of national approaches that preceded it.
Barabash believes MiCA could accelerate institutional and traditional finance participation in crypto markets by giving those players a reliable legal foundation to work from. The concern among smaller firms is that stricter requirements raise costs and compress the competitive advantages startups once enjoyed by moving fast and staying light.
Regulation as a Growth Mechanism
“Regulation does not necessarily kill innovation,” Barabash said. “Sometimes it actually creates the structure needed for new technologies to grow safely.”
The argument is straightforward. Without clear rules, institutional investors and banks hold back. With them, larger pools of capital become accessible, and the industry can build on a more durable foundation.
Banking relationships are a concrete example of this dynamic. Crypto companies rely on traditional banks for payment processing, fiat conversion, and financial services. Losing those relationships creates serious operational problems, regardless of how strong a platform’s product may be. Maintaining them requires credible anti-money-laundering programs and compliance infrastructure, not just product development.
Politics as a Regulatory Variable
Barabash noted that regulatory intensity rarely follows a purely technical path. Political leadership matters. Changes in government or institutional direction can shift how aggressively regulators pursue crypto policy, sometimes accelerating frameworks, sometimes stalling them.
That variability means compliance is not a box firms check once. It is an ongoing operational commitment that has to adapt as political environments change.
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial or investment advice.
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