Crypto Regulation News:
G20 Supports FATF’s Crypto Guidelines that Require Exchanges to Share Customer Data, Group of Digital Asset Trade Associations to Establish Global Cryptocurrency Association

Jul 1, 2019 · 17 min read

17th June — 1st July


G20 officially supports FATF’s crypto guidelines that require exchanges to share customer data: The Group of Twenty (G20), an international forum for the governments from 19 countries and the EU, has officially welcomed cryptocurrency guidelines set by the global money-laundering watchdog, the Financial Action Task Force (FATF). At the 2019 G20 summit held on June 28–29 in Osaka, Japan, the forum said: “We reaffirm our commitment to applying the recently amended FATF Standards to virtual assets and related providers for anti-money laundering and countering the financing of terrorism.” G20 was already affirming their intention to hold to FATF guidelines, but it has now officially announced the support at the summit.

Group of Digital Asset Trade Associations to Establish Global Cryptocurrency Association: A group of national trade associations representing the local Virtual Asset Service Providers (VASPs) announced their intention to establish an association to provide a global representative for firms in the industry in a press release. Per the release, the aforementioned Japanese trade association signed a Memorandum of Understanding (MoU) in Osaka aiming to establish the association. The associations that signed the agreement include the Australian Digital Commerce Association (ADCA), Singapore Cryptocurrency and Blockchain Industry Association, Japan Blockchain Association, Korean Blockchain Association, Hong Kong Blockchain Association, and the ​Taiwan Parliamentary Coalition for Blockchain & Industry Self-Regulatory Organization. The signing ceremony took place at the inaugural V20 VASP summit, which took place in parallel with the G20 meeting in Osaka which has seen VASP representative collaborate with regulators.


IMF Says Central Bank-Bked Crypto ‘Could Become Reality”: An SEC commissioner who’s a bitcoin skeptic admits the agency is experiencing internal disagreements over how to regulate crypto. However, Robert Jackson says the SEC will be more likely to approve crypto proposals, such as a bitcoin ETF, once the industry matures. Jackson is suspicious of bitcoin, but says the agency will view cryptocurrencies more favorably when the market becomes more transparent, more liquid, and adds bigger players. Speaking at the CB Insights’ Future of Fintech conference, Jackson said: “When the markets reach that stage, I fully believe we’ll have an SEC that’s ready to move forward with approving [a bitcoin ETF].”

US Fed Chair: Facebook’s Libra Carries Both Benefits and Risks: Jerome Powell, the head of the United States Federal Reserve, has said that he recognizes both potential benefits and risks to Facebook’s recently-unveiled Libra cryptocurrency project. During the conference, the Fed chair was asked whether he was concerned as to whether Facebook’s libra cryptocurrency could undermine the Fed and erode its power to influence the economy. In response, Powell said he believed that society remains a long way from digital currencies replacing central bank currencies, and that the central bank was not too concerned about no longer being able to implement monetary policy because of them given the infancy of the digital asset class.

BaFin Head Urges Global Bank Standards in Response to Facebook’s Libra: The head of the German Federal Financial Supervisory Authority (BaFin) has urged regulators to develop standards in response to Facebook’s forthcoming cryptocurrency, Libra. Speaking at the International Club Frankfurter Wirtschaftsjournalisten, BaFin President Felix Hufeld stressed that policymakers and regulators should not stand aside on the issue of Facebook’s Libra as considerable control questions could arise once the coin comes into use. Hufeld hinted at possible regulatory measures introduced by BaFin, but also pointed to the need for an international regulatory framework: “We certainly can not just watch. We will have to respond appropriately in any way. I can only hope that we will succeed in developing at least European, if not globally, basic standards.”

French Central Bank: Facebook’s Libra May Need Banking License: Bank of France Governor Francois Villeroy de Galhau said that Facebook’s Libra stablecoin must comply with anti-money laundering regulation and seek banking licenses if it offers banking services. Per the report, while Villeroy admitted during an interview with French magazine l’Obs that there was room to improve cross-border money transfers. He also pointed out that Facebook’s libra project has to comply existing banking regulation because “the risks are increased by the anonymity that Libra users would have.”

Bitcoin and Crypto Threaten Monopoly Power of Fiat Currency in the United States, Says Andrew Ross Sorkin: CNBC anchor Andrew Ross Sorkin says cryptocurrencies are challenging the last monopoly America and other governments around the world possess: their control over fiat currency. In a new interview with author Ben Mezrich, Sorkin says, “You saw the reaction to Libra almost instantaneously in Washington — people saying okay, we’ve got to press the pause button on this. Governments have a monopoly on fiat currency. It’s one of the last things they have a monopoly and an ability to control things with. The idea that they’re going to let these other cryptocurrencies flourish, where people can send money completely unencumbered, completely untraceable, completely untaxable, seems to me at some point there’s going to be a fork in the road or a conversation where there is going to be a major pause being pressed.”

Howey Schmowey — The Real Answer is to Update Securities Regulations by David Weisberger, co-founder and CEO of CoinRoutes and a veteran of building trading desks and financial technology businesses.


FATF to Strengthen Control Over Crypto Exchanges to Prevent Money Laundering: Financial Action Task Force’s announcement focused on digital currency’s role in money laundering and heightened regulation, as Secretary Steven Mnuchin noted in his closing remarks. The FATF — an intergovernmental organization that focuses its efforts on fighting money laundering — is planning to strengthen control over cryptocurrency exchanges to preclude digital currencies from being used in money laundering and related crimes. U.S. Secretary of the Treasury Steven Mnuchin said that the new measure will require that crypto assets service providers comply with AML and combating the financing of terrorism (CFT) procedures in the same way traditional institutions do. The organization’s latest guidance went into greater detail on this subject. Specifically, the organization wants cryptocurrency operators to establish the identity behind crypto funds senders and recipients, conduct proper due diligence to ensure they are not engaging in illicit activity, and develop risk-based programs, among others.

Trump Administration in Talks With Crypto Startup on Israeli–Palestinian Peace Plans: The Trump administration has tapped Israeli crypto startup Orbs to develop blockchain solutions for the region’s longstanding political conflicts. The disclosure comes this week from a summit convened by the White House in Bahrain to discuss the Israeli–Palestinian conflict. The New York Times reported Treasury Secretary Steven Mnuchin said investments in the Palestinian territory would be like a “hot I.P.O.” The White House is aiming to put $50 billion behind it’s so-called “Peace to Prosperity” plan. Orbs cofounder Netta Korin told CoinDesk in an email that her team has been “working with the U.S. Administration and the State Department … on several projects that are currently in stealth mode.”

US CFTC Brings Action Against $147 Million Bitcoin Investment Scheme: The United States Commodity Futures Trading Commission (CFTC) launched action against a reportedly fraudulent $147 million bitcoin (BTC) scheme. On June 17, the CFTC filed a complaint with the New York Southern District Court against now-defunct United Kingdom-based entity Control-Finance Ltd, which defrauded more than 1,000 investors to launder at least 22,858 bitcoin. The CFTC also brings actions against the entity’s head, Benjamin Reynolds, stating that Control-Finance and Reynolds “exploited public enthusiasm for Bitcoin” from May 1, 2017, to October 31, 2017. The action seeks civil monetary penalties, including “permanent trading and registration bans, restitution, and disgorgement.”

Live Streaming Startup YouNow Files With SEC For Crypto Offering: YouNow, a US-based live broadcasting service, has filed a public offering with the US Securities and Exchange Commission (SEC) for its own cryptocurrency, called the Props token.

Bitmain IPO Plans May be Rekindled With Crypto Winter’s End: Toward the end of June 2019, news emerged that the mining giant Bitmain might be reviving its IPO plans. As Bloomberg reports, the China-based cryptocurrency mining hardware producer is allegedly preparing to file documents with the United States Securities and Exchange Commission to hold its share sale on U.S. soil. Bitmain — being the largest player in the mining sector — first attempted to go public in the second half of 2018, but soon was heavily damaged by the intensifying crypto bear market. Now that the industry has entered a much more optimistic, bullish phase, the company might be looking to recoup its losses.

Crypto Firm LedgerX Approved By CFTC As Designated Contract Market: Cryptocurrency asset management platform LedgerX has received approval from the US Commodity Futures Trading Commission (CFTC) to trade bitcoin futures that are settled in the cryptocurrency.

Bancor Seeks to Exclude US Users From Trading Over Regulatory Uncertainty: Decentralized exchange platform Bancor plans to restrict United States residents from trading tokens on July 8. Citing a lack of clarity from regulators, executives said they took the decision to ban all users with a U.S. IP address from exchanging cryptocurrency. “This decision has been made in light of increased regulatory uncertainty; at this time, we believe this is the most judicious decision for all the members of our ecosystem,” the blog post reads. It continues: “This will enable the Bancor community and ecosystem to innovate faster and with greater clarity.”


France Creates G7 Taskforce to Examine Facebook’s Libra, Crypto Regulation: A G7 taskforce is being created to examine how central banks can regulate cryptocurrencies such as Facebook’s libra, Reuters reported on June 21. Francois Villeroy de Galhau, the governor of France’s central bank, said: “We want to combine being open to innovation with firmness on regulation. This is in everyone’s interest.” Although Paris has said it is not against Facebook creating a financial instrument, it vehemently opposes libra becoming a sovereign currency. Concerns have been raised over how to ensure cryptocurrencies comply with anti-money laundering laws, consumer protection rules and other regulatory matters. The G7 taskforce is going to be led by Benoit Coeure, who sits on the board of the European Central Bank.

Six Arrested Over Cloned Crypto Exchange That Stole €24 Million: A fake exchange website has managed to steal €24 million (over $27 million) in cryptocurrency from thousands of victims. European law enforcement agency Europol said in a press release that six individuals have now been arrested over the scam in an operation that also involved the UK’s South West Regional Cyber Crime Unit and National Crime Agency, along with Dutch police and Eurojust. Five men and one woman were simultaneously arrested yesterday at their homes in several U.K. locations, as well as Amsterdam and Rotterdam in the Netherlands. Europol said the criminal endeavor involved a “typosquatting” scam in which a “well-known” (but unnamed) online crypto exchange was cloned in order to gain access to victims’ crypto wallet login details and steal funds.

Irish Crypto Exchange Bitsane May Have Disappeared With Users’ Funds: Irish cryptocurrency exchange Bitsane may have done a runner with users’ funds. Bitsane exchange, which offers spot trading of cryptos and gained popularity as an early provider of XRP trading, has gone offline and has deleted its social media accounts. Customers of the exchange are saying that they have possibly lost amounts ranging from $5,000 to $150,000 in crypto holdings. On crypto data website CoinMarketCap, Bitsane’s trading information has not been updated for over 10 days.

Swiss Central Banker ‘Relaxed’ About Facebook’s Libra Crypto: A Swiss central banker has suggested that Facebook’s recently announced cryptocurrency project, Libra, is not ruffling any feathers with the regulator. Thomas Moser, alternate member of the governing board at the Swiss National Bank, said Facebook has indicated it is “willing to play according to the rules” and has been in touch with regulators over the Libra project. As such, “I think it’s an interesting development and I’m pretty relaxed about it,” said Moser, speaking at the Crypto Valley Conference in Zug, Switzerland. The comments will likely be welcome at Facebook, which has set up the cryptocurrency’s guiding Libra Association in the country, and is also facing calls for regulatory scrutiny over the effort in other jurisdictions.


Five South Korean Crypto Exchanges Agree To Take Liability For Hacks: Five South Korean cryptocurrency exchanges have changed their terms of service in line with demands from the country’s antitrust watchdog. After receiving corrective recommendations from South Korea’s Fair Trade Commission (FTC) in April 2018, Bithumb and four other crypto exchanges have agreed to increase their liability to users. Under the new terms of service, the exchanges will be held accountable for user losses after a cyber attack or system malfunction, even if they are not willfully or grossly negligent. Prior to this change, the crypto exchanges were only required to pay compensation if it was proven that the user funds were stolen because of the company’s negligence.

Japan’s Financial Watchdog Orders Hacked Exchange Zaif to Improve Business: Japan’s financial regulator, the Financial Service Agency (FSA), has issued a business improvement order to Japanese investment firm and Zaif crypto exchange operator Fisco. The FSA has identified shortcomings in Fisco’s internal control systems — such as anti-money laundering measures — and found it to be insufficiently compliant with local laws and regulations. As previously reported, Fisco assumed ownership of Japanese exchange Zaif in fall 2018, shortly after the platform was hacked to the tune of ~$59.7 million. The FSA’s action has reportedly been taken under the provisions of the country’s Act on Settlement of Funds. The regulator said Fisco’s management failed to recognize the importance of legal compliance, and ordered it to improve risk management systems. It must also establish more robust internal management, outsourcing, accounting, and auditing.

Japan’s Line Reportedly Close to Obtaining FSA License for Japanese Crypto Exchange: LVC Corporation, the digital asset- and blockchain-focused arm of Japanese messaging giant Line, is allegedly close to obtaining a crypto exchange operating license from Japan’s financial regulator. According to the report, Japan’s Financial Services Agency could issue the company with an exchange license as early as this month. The trading service, to be dubbed BitMax, would enable Line’s 80 million users in Japan to buy and sell multiple major cryptocurrencies, as well as Line’s native token Link, CT Japan notes. Line counts 187 million global users monthly, with an estimated 50 million users registered its mobile payment service, Line Pay.

Singapore’s Central Bank Wants More Information on Facebook’s Libra Crypto: Singapore’s central bank, the Monetary Authority of Singapore (MAS), is seeking more information from Facebook about its recently unveiled cryptocurrency project, Libra. As reported by Bloomberg, MAS managing director Ravi Menon said at a media briefing on Thursday that his institution has held talks with the social media giant over concerns about how Libra would function, although he acknowledged there are potential benefits too. Currently, MAS is having trouble deciding on how to categorize Libra in terms of regulation. “At this point we are not sure yet,” Menon said. Regarding the possible benefits, he said that Libra “offers a very interesting proposition that could help to address” existing “expensive, inefficient, sometimes risky” methods of remittance.

Singapore Exchange Bitrue Hacked for Over $4 Million in Crypto: Singapore-based cryptocurrency exchange Bitrue has been hacked for around $4.2 million in user assets. The platform announced the breach in tweets. Users funds are insured and anyone who lost cryptocurrency would be refunded, according to the company.

Rest of the World

Crypto And Blockchain Included In Canadian Securities Administrators’ 2019–2022 Business Plan: The Canadian Securities Administrators (CSA) has published its plans for the next three years, which include cryptocurrencies and blockchain technology. In its Business Plan for 2019–2022, the CSA said that it is considering the implications of emerging technologies, such as the growing influence of social media and innovation in distributed ledger technology (DLT), including blockchain.

Russian Ministry of Finance Considers Allowing Cryptocurrency Trading: A representative of the Russian Ministry of Finance (MinFin) says the ministry is considering allowing cryptocurrency trading. Per the report, the Deputy Minister of Finance Alexei Moiseyev told journalists on Friday that, while MinFin had reached no final decision, cryptocurrency trading may be allowed in the coming bill on the circulation of cryptocurrencies in the Russian Federation. A bill prohibiting the use of crypto assets as a means of payment in the Russian Federation passed in May of last year.

Russia to Adopt Crypto Legislation Within Two Weeks: Deputy Finance Minister: Russia’s parliament, the State Duma, will adopt the country’s major crypto bill “On Digital Financial Assets” (DFA) in the next two weeks. Russia’s deputy finance minister, Alexei Moiseev, revealed that the State Duma is currently considering the DFA, and is expected to adopt the bill in the second reading within the next two weeks. Moiseev added that the authority has approved separate legislation for initial coin offerings, which will be a part of Russia’s law on crowdfunding. Russia will thus have two bills related to cryptocurrencies, the DFA and the law on crowdfunding, Moiseev stated, adding that the DFA is expected to be approved in the version that has been prepared for the second reading.

Russia Will Not Legalize Facebook’s Cryptocurrency, Official Says: Chairman of the Russian State Duma Committee on Financial Market Anatoly Aksakov has said that Facebook’s forthcoming cryptocurrency Libra will not be legalized in Russia. Aksakov stated that Russia will not legalize the use of Facebook’s Libra cryptocurrency which the company intends to roll out in 2020, because it may pose a threat to the financial system of the country. Aksakov also stressed that Russia has no plans to adopt legislation “which provides space for the active use of crypto tools created in the framework of open platforms, blockchains.” Aksakov’s statements would seem contradictory to those of Deputy Finance Minister Alexei Moiseev, who said that the country’s major cryptocurrency bill “On Digital Financial Assets” could be adopted in the next two weeks.

Abkhazia Develops Draft Law on Crypto Mining: The Ministry of Economy of the partially-recognized Republic of Abkhazia has developed a law draft on the settlement of cryptocurrency mining activities in the country. The press service of the Ministry told Sputnik that the drafted bill was approved and sent to the Cabinet of Ministers of the republic. The proposed regulation defines legal, economic, organizational, and technical rules for the implementation of mining cryptocurrency activities in the republic. To conduct crypto mining operations, one will have to register as a legal entity or an entrepreneur, as well as register with the revenue authorities as a taxpayer and obtain a license for cryptocurrency mining activities.

Iranian Government to Cut Off Power to Crypto Mining Until Approval of New Energy Prices: The Iranian government will be cutting off power to crypto mining until new energy prices are approved. Mostafa Rajabi Mashhadi, an official at Iran’s Ministry of Energy, reportedly revealed that the country has seen a 7% spike of electricity consumption over a monthly period ending on June 21, 2019. Rajabi emphasized the unusual nature of the spike, as opposed to similar time spans in the past years, revealing that the country’s power grid had evidently become unstable. According to the official, the Iranian Ministry of Energy believes that the surge was caused by the growing number of crypto mining activity in the country, adding that the state will take necessary measures to prevent energy issues.

India: Another Crypto Exchange Closes Due to Regulatory Pressure: Indian crypto exchange Koinex has ceased operations effective immediately, co-founder Rahul Raj confirmed in a blog post on June 27. Raj said multiple delays by government agencies in clarifying crypto regulation have played a factor in the decision to close. This month’s proposal to introduce a 10-year jail sentence for Indian citizens who use cryptocurrencies had also contributed to a “sharp decline in trading volumes.” According to Raj, Koinex had experienced “regular disruption,” including denials when attempting to use payment services. He alleged this disruption extended to non-crypto transactions as well — with exchange employees asked questions by banks whenever they received their salary or attempted to pay their rent.

Facebook Has Not Applied for RBI Approval to Operate Libra in India: Report: Facebook’s newly announced cryptocurrency, libra, may not be available in India due to the current ban of blockchain-based currency transactions. Citing people familiar with the matter, the report says that the social media giant has not applied for approval with the Reserve Bank of India (RBI) to operate its digital currency in the country. A Facebook spokesperson has underlined that Facebook’s digital wallet, Calibra, “won’t be available in U.S.-sanctioned countries or countries that ban cryptocurrencies,” potentially preventing its use in some of Facebook’s largest markets, including India. The Economic Times notes that RBI has not confirmed or denied the allegations.

As Brazil’s Economy Risks Recession, Regulators and Banks Implement Blockchain: Brazil’s weak economic growth and inflationary pressure have led to more than 13 million Brazilians currently out of work. The unemployment rate currently stands at 12.5%. While the country runs the risk of recession, cryptocurrency’s low barrier for entry and promise of large returns appeal to Brazilians. Bruno Peroni, chief sales officer at Atlas Quantum, told Cointelegraph: “We have a higher number of people investing in crypto than on the local stocks markets. The most recent estimates show that there are 1.5 million Brazilians investing in crypto, whereas the local stock markets, called B3, has just reached 1 million investors.”

Santander Loses Appeal Against Brazilian Crypto Exchange, Fine Upheld: Major Spanish bank Santander has been denied an appeal regarding a decision by the Court of Justice of the State of São Paulo in a case against crypto exchange Mercado Bitcoin. Santander was sued by the Brazilian exchange Mercado Bitcoin in 2018, after the bank purportedly closed the exchange’s account at its sole discretion. The bank, which has branches in Latin America, cited concerns over the origin of the account’s fund due to the nature of the crypto exchange’s activities. Over 1 million reals (around $350,000) were locked, but the court subsequently ordered Santander to free the funds. Additionally, the bank must pay a monthly fine equal to 1% interest for the funds that were locked; this reportedly comes out to over 200,000 reals ($51,000).

What Indonesia Reveals About Facebook’s Cryptocurrency Ambitions: Facebook published plans for the Libra cryptocurrency in seven languages, including Indonesia’s Bahasa — a move that offers perhaps the clearest glimpse of what Facebook’s fintech ascent might look like. “Indonesia has the fourth-highest number of Facebook users in the world,” Pang Xue Kai, co-founder of the Indonesian crypto exchange Tokocrypto, told CoinDesk. “If Facebook’s Libra can address the [local] issues, it has the potential to succeed.” According to the annual media report released by We Are Social and Hootsuite, Indonesia has the world’s highest rate of Facebook post engagement among internet users, over 4 percent, and the highest frequency of online shopping, with 86 percent of Indonesian survey respondents saying they bought something online in the past month.

This is not financial advice.

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In chaos lies the truth


Paradigm is an ecosystem that incorporates a venture fund, a research agency and an accelerator focused on crypto, DLT, neuroscience, space technologies, robotics, and biometrics — technologies that combined together will alter how we perceive reality.


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In chaos lies the truth


Paradigm is an ecosystem that incorporates a venture fund, a research agency and an accelerator focused on crypto, DLT, neuroscience, space technologies, robotics, and biometrics — technologies that combined together will alter how we perceive reality.