Crypto Regulation News: Panama legislature passes bill regulating crypto, US lawmakers reintroduce bill to give CFTC crypto spot market oversight, EU agrees on law to curb online ads, strip illegal content, Ukraine’s central bank bans crypto purchases in local currency, and more!
Vol. 93, 18th April — 2d May
- US lawmakers reintroduce bill to give CFTC crypto spot market oversight. The Digital Commodity Exchange Act would give the commodities regulator the authority to determine rules for crypto developers and exchanges offering spot trading
- Stablecoins need to set a common standard, says US banking watchdog
- Europe’s lawmakers set to advance discussion of controversial crypto AML rules
- EU agrees on law to curb online ads, strip illegal content: The Digital Services Act, targeting big tech firms like Apple and Meta, is viewed as a “constitution for the internet”
- The European Banking Authority said it will start work this year to map out crypto activities and spot new financial risks. ECB’s Panetta compared crypto market dynamics to the 2008 financial crisis and called for additional regulation and taxes
- The UK’s FCA says it has been focused on the more negative side of the crypto debate
- New York State Assembly passes bill blocking new crypto mines that use non-renewable power. While New York Mayor urges state to abandon ‘stifling’ BitLicense scheme
- US, EU members among 60 nations calling for open, global Internet: The “Declaration for the Future of the Internet” calls for the network to return to its decentralized roots, and warns against Russia peeling off to form its own network
- US Labor Department has ‘grave concerns’ about Fidelity’s plan for Bitcoin in 401(k) retirement plans
- Swiss national bank owns no bitcoin, but could buy in the future, chairman says
- Belgian financial regulator FSMA to regulate crypto exchange services
- Panama legislature passes bill regulating crypto
- Brazilian senate plenary approves bill regulating crypto transactions
- Ukraine’s central bank bans crypto purchases in local currency
- Gibraltar’s government targets crypto market manipulation with new rules
- Hong Kong watchdog warns stablecoins could undermine HKD in CBDC paper
- Chinese court rules marketplace guilty of minting NFTs from stolen artwork
- Dubai real estate developer to accept crypto payments amid UAE push for crypto hub status. Kraken awarded crypto trading license in the United Arab Emirates
- India to give clarity on tax provision within two months
- Buenos Aires to allow residents to make tax payments with crypto
- Central Bank of Cuba to license digital asset service providers
- Russian security agency wants exchanges to share data with crime investigators
- The Philippines will launch pilot wholesale central bank digital currency project
- Central African Republic will adopt Bitcoin as legal tender
- Australia’s financial regulator aims to implement crypto regulation by 2025
- International Tax Consortium lists ‘red flag indicators’ of fraud in NFT marketplaces
- Binance to drive crypto and blockchain awareness among Indian investors. Binance blocks crypto accounts of relatives tied to the Russian government
- 2 Europeans charged with conspiracy in Virgil Griffith’s North Korea crypto sanctions case
- And more!
Crypto gains trust as investment, but still lags behind other options: Uncertainty over regulation remains a key barrier to crypto investing, according to Bitstamp.
Self-custody, control and identity: How regulators got it wrong: The EU proposal requiring one to link a self-custodial wallet to their identity fundamentally misunderstands the concept of self-custody.
Green finance needs voluntary carbon markets that work: Carbon markets turn CO2 emissions into a commodity or tradable asset by giving it a price. Blockchain and smart contracts will improve those markets.
Solving the ‘Sunrise Issue’ is the key to unlocking crypto mass adoption: Regulation will touch every person in every jurisdiction worldwide; crypto must find ways to preserve its decentralization and privacy.
Blockchain and crypto can be a boon for tracking financial crimes: The notion of crypto being a tool for money laundering is often propagated by naysayers that include policymakers with a stake in the traditional financial system.
Here is why Germany is ranked the most crypto-friendly country: The journey from crypto skepticism to enthusiasm: What allowed Germany to become the most attractive country for crypto investments?
Making crypto conventional by improving crypto crime investigations worldwide: Law enforcement needs to be better educated — alongside regulators and policymakers — to truly make a difference and unlock further crypto mass adoption.
PSA to crypto world: Lock in some gains before going Metaverse: No doubt, the Metaverse is important, but in the real world, DeFi makes a genuine difference by changing the traditional financial system.
The new HM Treasury regulations: The good, the bad and the ugly: With the U.K. never having been particularly crypto-friendly, could new regulations and Her Majesty’s Treasury’s recent announcements be a game changer?
Georgia crypto mining’s potential: What’s driving growth in the industry? A combination of laissez-faire factors has created a beneficial environment for cryptocurrency mining in Georgia.
Emmanuel Macron on crypto: ‘I don’t believe in a self-regulated financial sector’: In an interview, the sitting French president voiced his support for MiCA regulation and the digital euro project.
India Needs a Single Crypto Regulator, Says Polygon Co-Founder: A collective authority could encourage projects like Polygon to set up shop in India, co-founder Sandeep Nailwal told CoinDesk.
US Lawmakers Reintroduce Bill to Give CFTC Crypto Spot Market Oversight: The Digital Commodity Exchange Act would give the regulator direct oversight of some types of crypto transactions and exchanges.
A bipartisan set of U.S. lawmakers are introducing a bill that would give the Commodity Futures Trading Commission (CFTC) a greater role in overseeing crypto spot markets. The Digital Commodity Exchange Act of 2022 (DCEA), introduced by representatives Glenn Thompson (R-Pa.), Ro Khanna (D-Calif.) Tom Emmer (R-Minn.) and Darren Soto (D-Fla.), would create a definition for “digital commodity” and allow the CFTC to oversee companies issuing or letting people trade these types of tokens, while having the Securities and Exchange Commission (SEC) continue to oversee tokens that fall under U.S. securities laws.
“The term ‘digital commodity’ means any form of fungible intangible personal property that can be exclusively possessed and transferred person to person without necessary reliance on an intermediary,” a copy of the bill said.
The definition would not include any equity or debt interests, or securities (defined as “a profit or revenue share derived solely from the managerial efforts of others” in the bill). In other words, the SEC would continue to enjoy its own oversight over aspects of the crypto market. These digital commodities could only be sold on a CFTC-registered exchange, which would have to abide by certain requirements which include holding customers’ crypto in qualified custodians, safeguarding customer assets and prevent commingling customer and corporate funds, according to the bill.
This year’s version of the DCEA is an updated version of a bill originally introduced in 2020 by former Rep. Michael Conaway (R-Texas). Members of the House Agriculture Committee, where Thompson is the ranking member, introduced an updated version last year. Thompson announced in March during a hearing with CFTC Chair Rostin Behnam that he was continuing to work on the bill. In a statement, Thompson said the bill was “a culmination of years of work.”
“Closing the spot-market gap is an essential piece of the regulatory puzzle, but more work remains. I look forward to working with my colleagues to bring greater clarity to crypto users and creators and I hope to see it move through the legislative process promptly,” he said.
Khanna, a co-sponsor, said, “To foster American innovation and tech job growth, Congress must establish a clear process for creating and trading digital commodities that prioritizes consumer protections, transparency and accountability.”
US Labor Department Has ‘Grave Concerns’ About Fidelity’s Plan for Bitcoin in 401(k) Retirement Plans, Wall Street Journal Reports: The Labor Department is scheduled to meet with Fidelity to express concerns.
Stablecoins Need to Set a Common Standard, Says US Banking Watchdog: The acting OCC chief says stablecoins aren’t ”interoperable” and that should change.
CFTC Sets May Roundtable to Weigh Ideas Sparked by FTX’s Derivatives Push: The May 25 discussion will consider direct clearing of derivatives as pitched by FTX.US.
Bipartisan bill to give CFTC authority over exchanges and stablecoins: The Digital Commodity Exchange Act would give the commodities regulator the authority to determine rules for cryptocurrency developers and exchanges offering spot trading.
New York State Assembly Passes Bill Blocking New Crypto Mines That Use Non-Renewable Power: The bill will impose a two-year moratorium on new crypto mining firms that use a carbon-based energy source. Existing facilities aren’t affected, nor are any that tap renewable resources.
New York Mayor urges state to abandon ‘stifling’ BitLicense scheme: “We have to continue to be competitive,” the mayor said in a keynote interview at a London crypto conference, where he suggested scrapping the states’ BitLicensing requirement.
US Treasury Sanctions More North Korea-Linked ETH Wallets Over $600M Ronin Hack: The three new wallets join an Ethereum address added to the sanctions list last week.
US Senate confirms Lael Brainard as Fed vice chair: In a 52–43 vote on the Senate floor on Tuesday, U.S. lawmakers confirmed Lael Brainard as vice chair of the Federal Reserve System for four years.
Europe & UK
Europe’s Lawmakers Set to Advance Discussion of Controversial Crypto AML Rules: Talks on contentious anti-money laundering rules for the sector are reaching the closing stage, but some hope there’ll be wiggle room on small payments, unhosted wallets and transition periods.
Talks involving the European Union’s parliament, commission and council begin Thursday on controversial anti-money laundering rules for crypto transactions, the last stage towards the passage into law of measures that some have said could kill privacy and stifle innovation. Many in the industry question the premise that tough new rules are needed against a tide of criminal behavior, but more pragmatic voices are looking at the legislative details that could prove crucial — such as how the law will treat small payments and unhosted wallets, as well as when the new law would take effect.
The draft legislation would require crypto providers to verify customer details and report suspicious transactions to the authorities — but the industry has complained it could prove burdensome to implement, and would end digital anonymity. A last-minute protest led by Coinbase (COIN) and similar companies largely fell on deaf ears, and on March 31 European Parliament lawmakers voted to apply tough money-laundering rules to the sector, arguing the rules were needed to curb crime. Now, attention turns to what the final form of the law will be — where talks are reaching the closing stage.
Both lawmakers at the European Parliament and national government meeting in the EU’s Council have said they want to see tighter monitoring of which parties take part in crypto transactions. They say that should apply even for the smallest payments — unlike for conventional bank transfers where customer identity only needs to be verified for transactions over 1,000 euros ($1,066) — as it’s easier to circumvent by chopping up digital payments into small chunks. In practical terms that may not make much difference, according to a recent blog by Oldrich Peslar, head of legal at the Rockaway Blockchain Fund.
“I do not think that this is some tragedy” to apply checks to small crypto payments, Peslar said, because it is “all information any compliant service provider could already have,” and gathering it “is not an administrative burden nor any invasion of privacy.”
But from a legal point of view, it could constitute an unfair intrusion into personal affairs that could invite a legal challenge, blockchain law expert Thibault Schrepel told.
“You are putting [on] more obligations if it’s crypto-related than if it’s not,” Schrepel, an associate professor of law at the Free University of Amsterdam, said in an interview. “That would be the worst outcome,” he added, potentially infringing EU human rights law — not the least because money laundering is more widespread using other, more traditional means of payment.
Lawmakers could be swayed by the risk of a legal challenge, Schrepel believes — but in practice it may be difficult to get them to retreat from a position they share with the Council. In other areas there is less consensus on the right approach — and, for the law to become final, lawmakers and governments will have to thrash out their differences in a series of closed-door meetings, beginning Thursday. That includes the parliament’s proposals to make checks apply to unhosted wallets, and to have a central blacklist of dodgy providers. Those are issues that concern Peslar, warning they could spell the end of privacy-enhancing features such as mixers or currencies like monero (XMR).
The Council says the new rules should wait for crypto licensing legislation to take effect, and apply only two years after the separate Markets in Crypto Assets Regulation is finalized. The MiCA legislation, which could allow crypto operators to work across the EU if they meet financial-stability and investor protection norms, is also currently in its closing stages of negotiation. Lawmakers, however, want to see a phasing in of between nine and 18 months, while French central banker François Villeroy de Galhau on Tuesday said the rules should be implemented by “at the latest early 2024.”
That matters a lot, Kopitsch believes — because crypto providers might decide to drop services altogether rather than face the legal risk of a rushed job. The timeline for implementing is “actually the biggest problem” of the forthcoming negotiations, Kopitsch said, noting the importance of coordinating with other jurisdictions such as the U.S. “In nine months you cannot do anything.”
Banks Don’t Need Extra Crypto Protections Yet, EU Regulator Says: The European Banking Authority said it will start work this year to map out crypto activities and spot new financial risks.
EU Crypto Laundering Plans Could Overwhelm Authorities, Bank Regulator Says: Officials urged lawmakers to think again as they approach the last stage of privacy-busting proposals.
ECB’s Panetta Blasts Crypto as ‘Ponzi Scheme’ Fueled by Greed: The central banker compared crypto market dynamics to the 2008 financial crisis and called for additional regulation and taxes.
EU Agrees on Law to Curb Online Ads, Strip Illegal Content: The Digital Services Act, targeting big tech firms like Apple and Meta, is viewed as a “constitution for the internet.”
Swiss National Bank Owns No Bitcoin, but Could Buy in the Future, Chairman Says: While bitcoin today doesn’t meet norms for currency reserves, said Thomas Jordan, there’s no technical bar to purchases.
The UK’s FCA Says It Has Been Focused on the More Negative Side of the Crypto Debate: The financial regulator tended to key in on the risks crypto present for financial stability, said the co-director of consumer and retail policy.
Belgian financial regulator FSMA to regulate crypto exchange services: Crypto service providers must fulfill seven conditions that include being constituted in the form of a company with a minimum capital of roughly $52,725, or 50,000 euros.
Gibraltar’s Government Targets Crypto Market Manipulation With New Rules: Market manipulation has been an increasing risk among distributed ledger technology companies, Gibraltar’s Minister for Digital and Financial Services Albert Isola minister said in 2020.
Hong Kong Monetary Authority Invites Views on Retail CBDC: The authority is studying design considerations such as issuance, interoperability with other payment systems, privacy and data protection.
The Hong Kong Monetary Authority (HKMA) has issued a discussion paper inviting views on the key issues around a retail central bank digital currency (CBDC). The city’s de facto central bank’s “e-HKD: A policy and design perspective” paper focuses on the policy and design issues related to a digital Hong Kong dollar.
The authority is studying the issuance mechanism, interoperability with other payment systems, privacy and data protection. The HKMA has previously studied the technical aspects of issuing a CBDC, the findings of which were published in October. The resulting paper studied potential architectures and design options as it relates to the construction of the infrastructure for distributing an e-HKD.
Along with the HKMA, the central banks of almost every major economy worldwide are studying or developing CBDCs, in part as a means of future-proofing their currencies from potential threats posed by increased use of privately issued digital currencies.
China is leading the way with its digital yuan — or eCNY — which had 260 million individual users as of January. Hong Kong maintains its own financial and judicial systems, separately from the Chinese mainland as part of the “One Country, Two Systems” framework under which Hong Kong is governed.
Chinese court rules marketplace guilty of minting NFTs from stolen artwork: A user of the NFT marketplace NFTCN allegedly poached a creation of an artist and sold it as an NFT for $137 to another user.
Rest of the World
Panama Legislature Passes Bill Regulating Crypto: The legislation now moves to the desk of President Laurentino Cortizo for his signature or veto.
A plenary session of the Panamanian Legislative Assembly approved a bill on Thursday regulating the use of cryptocurrencies in the Central American country.
“This will help Panama become a hub of innovation and technology in Latin America,” Congressman Gabriel Silva, who introduced the bill, tweeted on Thursday. “[The] only thing missing is for the President to sign it. Thank you to all who helped. This will help create jobs and financial inclusion.”
As informed by the Assembly, “the law regulates the trading and use of crypto-assets, the issuance of digital value, tokenisation of precious metals and other assets, payment systems and other provisions.”
The bill was passed out of the Panamanian Legislative Assembly’s economic affairs committee last week before its final approval today. Following the legislative process, Panamanian President Laurentino Cortizo can veto the bill or sign it into law.
Last week, Silva said that the bill aims to “give legal stability to crypto assets in Panama [and] develop the crypto industry in the country to attract more investments and generate more employment.” He added that it also looks to have blockchain technology be adopted by the Panamanian government “to increase transparency and efficiency in procedures.”
Panama’s Crypto Law: No Legal Tender, but Digital Assets Exempt From Capital Gains Tax: Panama’s legislature on Thursday passed a bill aimed at making the country a favorable locale for crypto business.
Dubai Real Estate Developer to Accept Crypto Payments Amid UAE Push for Crypto Hub Status: Several of the world’s biggest crypto exchanges have flocked to the emirates in the last few months.
India to Give Clarity on Tax Provision Within Two Months: Sources: The 1% tax deducted at source has been the biggest pain point in the new tax rules for India’s crypto industry.
Brazilian Senate Plenary Approves Bill Regulating Crypto Transactions: The bill will be voted on by the Chamber of Deputies and, if approved, can be vetoed by the executive branch.
Buenos Aires City to Allow Residents to Make Tax Payments With Crypto: The crypto will be converted to Argentine pesos by crypto firms before being given to the city, said Mayor Horacio Rodríguez Larreta.
Central Bank of Cuba to License Digital Asset Service Providers: Licenses will be valid for one year and may be extended for an additional year, the bank said Tuesday.
Ukraine’s Central Bank Bans Crypto Purchases in Local Currency: Individuals may only purchase crypto using foreign currency up to a value of 100,000 Ukrainian hryvnia ($3,400) per month.
Russian security agency wants exchanges to share data with crime investigators: The measure comes along with a proposed ban on advertising of non-licensed crypto services.
The Philippines will launch pilot wholesale central bank digital currency project: Retail digital payments are growing, but the country needs to implement further payment and financial inclusion reforms before a retail CBDC will be needed.
Australia’s Financial Regulator Aims to Implement Crypto Regulation by 2025: To this end, APRA plans to conduct consultations on requirements for the financial treatment of crypto-assets in 2023.
Central African Republic will adopt Bitcoin as legal tender:The African nation will reportedly join a short list of countries to adopt cryptocurrency as legal tender.
On Freedom Day, Bitcoin gives South Africans a stake in their financial future: “Freedom Day means you are free to use your own money to live your best life,” said BitcoinZAR, a Bitcoin advocate in South Africa.
Kraken awarded crypto trading license in the United Arab Emirates: With the new operational license in Abu Dhabi, Kraken aims to provide access to global liquidity to local investors via dirham trading pairs.
US, EU Members Among 60 Nations Calling for Open, Global Internet: The “Declaration for the Future of the Internet” calls for the network to return to its decentralized roots, and warns against Russia peeling off to form its own network.
The U.S., European Union members and 32 like-minded nations have said they want to see the internet stay open and global in the wake of threats of fragmentation, firewalls and privacy violations.
The “Declaration for the Future of the Internet” warns of a rise in cybercrime and malicious behavior online, and that the invasion of Ukraine could disrupt the internet, or lead to Russia disconnecting from it entirely. The statement points out the online economy has become “highly concentrated,” raising concerns over data use, and calls for the internet to operate as a “single, decentralized network of networks.”
Signatories call on online platforms to get rid of harmful content online without quashing freedom of expression — just after the 27-nation EU passed laws with the same goals, focused on web giants like Meta and Google. Sixty countries signed up, including the U.K., Israel, Australia, Japan and Kenya. Nevertheless, big emerging economies such as China, Russia, Brazil and India are absent.
International Tax Consortium Lists ‘Red Flag Indicators’ of Fraud in NFT Marketplaces: The guidance, which is the first of its kind from the Joint Chiefs of Global Tax Enforcement, lists both strong and moderate indicators of fraud.
Former Homeland Security Chief Nielsen to Join Astra as Adviser: Ex-Cabinet secretary to work as strategic adviser beside former acting White House Chief of Staff Mick Mulvaney.
Elon Musk Wants to Authenticate Every Twitter User. Crypto Twitter Should Take Notice: Twitter’s soon-to-be owner says he wants to “authenticate” all humans, but did not say what that actually means.
Binance to drive crypto and blockchain awareness among Indian investors: Binance also highlighted that Indian regulators and policymakers cite the lack of education as an area of concern, hindering crypto’s widespread adoption in the region.
Binance blocks crypto accounts of relatives tied to the Russian government: Binance blocked the account of the Kremlin spokesman’s daughter when she tried to use the exchange following the economic sanctions imposed upon Russia.
2 Europeans Charged With Conspiracy in Virgil Griffith’s North Korea Crypto Sanctions Case: Earlier this month, Griffith, an Ethereum developer, was sentenced to five years in prison for helping North Korea evade sanctions with crypto.
Crypto Lender Celsius Says Its CEL Token Faces ‘Regulatory Risks’: Lost keys, stolen coins, failing chains — and now regulation — could affect CEL, a Celsius Network disclosure form said.
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