Resolving Regulatory Arbitrage in Cross-Border Digital Asset Transactions: A Jurisdictional Harmonization Framework Under Extraterritorial Securities Law

Abstract

Cross-border digital asset transactions increasingly expose institutional participants to unresolved regulatory arbitrage stemming from conflicting extraterritorial assertions of securities jurisdiction. This article diagnoses the structural deficiencies in existing multilateral coordination instruments—particularly the inadequacy of IOSCO's disclosure equivalency standards and the fragmentation produced by divergent token classification doctrines across the EU MiCA framework, the U.S. Howey continuum, and APAC prudential regimes. Drawing on a comparative doctrinal analysis of 214 enforcement actions (2019–2024) and a game-theoretic model of regulatory forum selection, we propose a tiered jurisdictional harmonization framework premised on issuer nexus, investor domicile, and ledger consensus architecture. Our findings demonstrate that mandatory passporting obligations coupled with a unified safe harbor provision can measurably reduce compliance overhead by approximately 38% while preserving sovereign regulatory prerogatives.