Cryptocurrencies have been defined and regulated differently in all corners of society. Much research has been made on countries' institutional measures to consummate regulations toward cryptocurrencies further. This paper explores the definition and nature of cryptocurrencies through a literature review method. The nature of cryptocurrencies has directly led to their benefits and misuse. This paper also explores the regulatory measures made by the U.S. and the flaws revealed in the Coinbase Case and Ripple Case. The ambiguous definition between regulatory departments and overlapping law enforcement power has made investors not knowing what course to take. New measures are taken in Hong Kong through a compulsory licensing system and laying major responsibility on platform service providers. This paper examines the new efforts and proposes some potential flaws under the new regulatory system. The Hong Kong regulatory approach is believed to provide insight and reference for other markets that would like to include cryptocurrencies into regulation.