Blockchain Regulation Matrix
The Blockchain Regulation Matrix (BRM) establishes a framework outlining the concerns of regulating the blockchain from both the government and the consumer perspective, and in doing so, provides a pragmatic and clear approach to Web3 regulation. The BRM outlines regulation aspects of the blockchain by viewing it as a blockchain stack in many layers starting with the electricity physically supporting the blockchain at the base layer, all the way to the process of offloading crypto to fiat currency. With centralization and decentralization on either side of the matrix, the primary objective of the BRM is to understand where and how regulation of the blockchain should be developed specific to each layer.
Beginning with the electricty supporting the blockchain, as you hover over the images of each row, you'll see the specifics for that topic within that layer. The left side refers to projects that are centralized, while the right side refers to projects that are decentralized. For example, if there was an organization or business that wanted to provide electricity to miners in their area, that would be a centralized project. However, if there was a solar farm operating as a DAO that wanted to provide electricity to miners, that could be a decentralized project.
There are two illustrations of the Blockchain Regulation Matrix below, a short-form immediately below and a long-form afterwards.
Hover over the icons to preview each topic, and click any icon to pin its details — the address bar then links straight to that cell, ready to share.
Exchange Layer
This row applies to companies that operate as an exchange.
Notable incidents
- FTX collapse (2022) — An $8B customer shortfall from commingling and misappropriation; the founder was convicted of fraud in 2023 — the case behind every custody rule since.
- Mt. Gox (2014) — The original exchange failure: ~850k BTC lost, creditors waited a decade — proof that exchange custody risk predates and outlives every cycle.
- Bybit hack (2025) — $1.5B stolen via compromised signing infrastructure — the largest crypto theft ever, and it hit a major centralized venue's cold-wallet process.
