This paper examines the eects of cryptocurrency regulation on price deviations in

the Bitcoin market, focusing on regulatory implementations rather than announce-

ments. I construct a unique database of regulations across 28 countries since 2009,

categorized into seven types, and analyse Bitcoin price data since September 2013.

Our ndings indicate that the Law of One Price does not hold in the Bitcoin market.

Contrary to initial conjectures, more regulated markets exhibit higher price conver-

gence with the USD benchmark. According to the type of regulation, this result is

mixed. Regulations enhancing reliability and transparency, such as the expansion of

securities laws, banking and payment regulations, and the implementation of regula-

tory sandboxes foster price convergence. In contrast, partial bansprimarily target-

ing banksexacerbate price divergence, underscoring the signicant role of nancial

institutions in the Bitcoin market. Additionally, anti-money laundering/countering

the nancing of terrorism (AML/CFT) laws reduce local prices regardless of USD

price level, suggesting the cryptocurrency's use in illicit activities.

Keywords: Bitcoin, cryptocurrency regulation, price convergence, Law of One

Price, nancial institutions, anti-money laundering, regulatory impact.

JEL Codes: G15, G18, E42, K22.