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Crypto Regulation News: Turkey’s crypto law is ready for parliament, Paraguay’s Senate approves a cryptocurrency bill, US financial system regulators highlighted crypto’s growing risk, Myanmar shadow government declares stablecoin USDT an official currency, and more!

Vol. 84, 13th December — 27th December


  • The US Financial Stability Oversight Council identifies stablecoins and cryptos as threats to the financial system
  • Wyoming Sen. Lummis to propose new comprehensive crypto bill in 2022
  • Turkey’s crypto law is ready for parliament, President Erdoğan confirms. While Binance Turkey fined 8M lira for non-compliance against money laundering
  • Tether lauds Myanmar shadow government for making USDT an official currency
  • Paraguay’s Senate approves proposal regulating crypto mining and trading
  • Derivatives Trade Association ISDA to develop common standards for crypto assets
  • Bank of England to ramp up talks on crypto rules as data is hard to find. Furthermore, UK advertising watchdog bans crypto ads for Coinbase and Kraken
  • Binance is threatening to block UK derivatives traders in a move to keep regulators at bay
  • French central bank completes first stage of its CBDC experiments
  • Cyprus’ finance ministry recommends ‘capacity building’ for crypto industry
  • Thailand to delay CBDC test till late 2022
  • Japan’s taxes on crypto firms are leading some to leave the country
  • China’s state-run news agency to launch NFT collection. Furthermore, Beijing court rejects monetary compensation in Bitcoin mining contract plea
  • SEC delays decision on Grayscale and Bitwise spot bitcoin ETFs. SEC rejects Kryptoin spot bitcoin ETF proposal
  • Russia to decide between blanket crypto ban and legalizing exchanges in 2022
  • El Salvador’s President fires back at critics on ‘Bitcoin experiment’
  • Dubai World Trade Centre to create a new crypto hub and become a regulator. Binance joins fresh crypto hub
  • 100 digital payment token firms in Singapore fail to win licenses
  • Kazakhstan piloting a CBDC on R3′s Corda platform
  • Teenage suspect in 16M DeFi hack wanted for arrest in Canada
  • India’s crypto bill to be delayed for several weeks. Indian government to accredit Web 2.0 and Web 3.0 blockchain startups
  • Ukraine commercial bank to test digital currency built on stellar
  • Another Ethereum education initiative hampered by Iran sanctions fears
  • Arsenal football club in dispute with ASA over ‘irresponsible’ crypto ad
  • And more!


How Crypto Losses Could Result in Tax Benefits: The IRS allows investors to take deductions on crypto losses that can reduce tax liabilities or even lead to a tax refund.

Creating a pathway for crypto market growth through better regulation: The crypto industry as a whole needs to recognize the long-term problems inherent in the current lack of regulation and find ways to work with legislators.

Industry experts reveal a possible method for Bank of Russia to block crypto: Bank of Russia’s crypto restrictions through MCC would unlikely affect exchanges that have been operating illegally so far.

Why Corporate America Is Getting NFTs All Wrong: Here are the nine things every marketer and CEO should know about NFT projects.

IMF chief economist calls for global policy on cryptocurrency: The economist’s remarks come as nations around the world consider how to control cryptocurrencies.

Bank of Russia governor: Banning crypto in Russia is ‘quite doable’: “We cannot welcome investments into cryptocurrencies,” says Central Bank of Russia governor Elvira Nabiullina.

Fitch Says Improved Regulation Could Moderate Stablecoin Credit Risks: The approach taken by the U.S. would be key to medium-term development of stablecoins, Fitch notes.

Binance CEO Warns Against Isolating CBDCs From Broader Crypto Ecosystem: Changpeng Zhao described CBDCs as an “additional option” and warned central banks against their “walled-garden” approach.

Pakistanis have $20B in crypto assets, says head of local association: He called for the government to set up a Bitcoin policy, arguing that India already had some regulations in place.

‘I’m a huge believer in crypto technology,’ says former US SEC chair: Jay Clayton said that cryptocurrencies have numerous purposes and are connected to a variety of industries, and the SEC should be in charge of regulating only those sectors that are linked to it.


US Financial Stability Oversight Council identifies stablecoins and cryptos as threats to financial system: “The Council recommends that state and federal regulators review available regulations and tools that could be applied to digital assets,” says the FSOC.

In an annual report published on Friday, the United States Financial Stability Oversight Council, or FSOC, voiced its concern over the adoption of stablecoins and other digital assets.

Regarding stablecoins, the FSOC said consumer confidence could be undermined by factors such as illiquidity, lack of appropriate safeguards, opacity regarding redemption rights and cyber attacks.

“A run on stablecoins during strained market conditions may have the potential to amplify a shock to the economy and the financial system,” the report said.

The report also alerted to developments in decentralized finance, or DeFi, where the use of high leverage could trigger a fire sale when the price of the underlying asset declines. This would result in a cycle of margin calls and further price declines. In addition, the report outlined that “users of these services face the risk of loss due to market value fluctuations, operational issues and cybersecurity threats, among other risks.” In the report’s recommendations, the FSOC calls for a unified effort between federal and state authorities to enact legislation on stablecoins and digital currencies.

Despite concerns surrounding the much-unregulated nature of the crypto industry, the report highlighted their innovative potential:

“The development of digital assets and the use of associated distributed ledger technology may present the opportunity to promote innovation and further modernization of financial infrastructure. Regulatory attention and coordination are critically important in light of the quickly evolving market for digital assets.”

Wyoming Sen. Lummis to Propose New Crypto Regulator, Clear Guidance in 2022 Bill: The bitcoin-holding U.S. senator is trying to “fully integrate” crypto into the U.S. financial system, an aide said.

SEC Rejects Kryptoin Spot Bitcoin ETF Proposal: The decision comes about five weeks after the agency rejected VanEck’s application for a spot bitcoin ETF.

SEC Delays Decision on Grayscale and Bitwise Spot Bitcoin ETFs: The agency is extending its review of two proposals by at least 45 days.

Federal Regulator Says Credit Unions Can Partner With Crypto Providers: The new guidance will allow them to support the buying and selling of cryptocurrencies.

US Lawmakers Ask Janet Yellen to Define ‘Broker’ for Infrastructure Bill: A bipartisan group of senators say they’ll offer legislation if needed to clarify the contentious provision.

US Treasury official beckons new stablecoin regulations: “If Congress does not enact legislation, the regulators will try to use what authority they have,” stated the U.S. Treasury official Nellie Liang.

Fed Chair Jerome Powell says he isn’t concerned about crypto disrupting financial stability in the US: “Stablecoins can certainly be a useful, efficient consumer-serving part of the financial system if they’re properly regulated,” said Jerome Powell.

SEC commissioner Elad Roisman will leave by end of January: Roisman was sworn into the SEC in 2018 and served as acting chair until January 2021, with his term as commissioner originally set to expire in 2023.

US Senate confirms CFTC chair as President Biden announces commissioner picks: At his October confirmation hearing, Rostin Behnam said it was “critically important to have a primary cop on the beat” of an emerging market that included cryptocurrencies and stablecoins.

Six senators urge Treasury Secretary to clarify definition of broker in infrastructure law before 2022: According to the U.S. lawmakers, the infrastructure law contains an “overly-broad interpretation” of what a broker is and places the reporting burden on individuals who may not have the necessary information to comply.

Europe & UK

Turkey’s crypto law is ready for parliament, President Erdoğan confirms: Once implemented, the crypto law will implement a new economic model that can potentially help recover the lira’s falling value.

Turkey’s President Recep Tayyip Erdoğan has reportedly confirmed the completion of a crypto law draft that will soon be shared with the Parliament for mainstream implementation in the country.

In an effort to counter the falling value of the Turkish lira, President Erdoğan shared plans to implement a new economic model while speaking at a press conference in Istanbul. As reported by local media NTV, Erdoğan said that the cryptocurrency bill is ready, adding:

“We will take steps on this issue by sending it to Parliament without delay.”

Acknowledging the country’s recent inflationary episode, Erdoğan said that the currency event is not related to mathematics but a matter of process — implying a possibility and potential of lira’s value growth:

“With this understanding, we intend to channel it to a dry spot. But the exchange rate will find its own price on the market.”

With the introduction of the new crypto law, the president envisions Turkey to become one of the 10 largest economies in the world. Speaking about the rising prices in the region, he shared plans to follow the people who change the labels of the price list organizers several times a day. “We want them to lower the dollar’s increases now,” he concluded.

On Nov. 23, Bitcoin holders in Turkey avoided an accelerating currency collapse as the lira lost 15% against the U.S. dollar in a single day.

BTC/TRY 1-day candle chart (Binance). Source: TradingView

The fiat currency’s fall resulted in Bitcoin (BTC) reaching a new all-time high against the Turkish lira. The BTC/TRY trading pair reached 723,329 Turkish lira on Binance.

Binance Turkey fined 8M lira for non-compliance against money laundering: MASAK found Binance Turkey guilty of violating the Law on Prevention of Laundering Proceeds of Crime, also known as the AML Law.

Bank of England to Ramp Up Talks on Crypto Rules as Data Is Hard to Find: International cooperation is required to gather the information needed to evaluate crypto risks to the global financial system.

Binance Is Threatening to Block UK Derivatives Traders in a Move to Keep Regulators at Bay: U.K. users have until February to confirm if they are private investors or be blocked from accessing futures, margin, leveraged tokens and more.

UK advertising watchdog bans crypto ads for Coinbase and Kraken: The ASA wants crypto firms to make it clear that past crypto rallies do not guarantee the same scenarios in future.

French Central Bank Completes First Stage of Its CBDC Experiments: The final stage of the first tranche of experiments consisted of the issuance of a digital bond on a blockchain with settlement in CBDC.

Cyprus’ finance ministry recommends ‘capacity building’ for crypto: Cyprus’s finance ministry stressed the need to accelerate its capacity building for the crypto industry.


Thailand to define ‘red lines‘ for crypto in early 2022: “Cryptocurrencies cannot become a means of payment,” Bank of Thailand governor Sethaput Suthiwartnarueput stated.

The government of Thailand is preparing a new regulatory framework for cryptocurrencies like Bitcoin (BTC) to minimize risks and improve investor protection.

The Bank of Thailand (BoT) will release a consultation paper in January that will define “red lines” for the crypto industry, governor Sethaput Suthiwartnarueput said in a Dec. 14 interview with The Bangkok Post.

“We want to ensure that we strike the right balance between allowing financial innovation and managing risks,” the official stated. The new rules will provide adequate safeguards for consumers as “risks are under-appreciated” currently, Sethaput said.

The central bank is cooperating with the Thai Securities and Exchange Commission and the finance ministry to point out restrictions specific to the crypto industry. For example, “cryptocurrencies cannot become a means of payment,” Sethaput noted.

The governor emphasized that, despite local authorities potentially recognizing digital assets as an investment product, their extreme volatility poses risks to the financial system. Authorities will also collaborate to adopt proper safeguards for future financial securities, he added.

Thailand’s plans to enact new rules for cryptocurrencies come amid booming local cryptocurrency adoption. According to the report, the turnover at seven locally licensed crypto exchanges surged to 221 billion baht ($6.6 billion) in November 2021 from 18 billion baht ($538 million) a year earlier.

In early December, the Thai central bank warned commercial banks against a “direct involvement” in trading cryptocurrencies, citing their high volatility and potential risks.

Japan’s Taxes on Crypto Firms Are Leading Some to Leave the Country: Founders face hefty corporate taxes when listing tokens and individual investors are taxed up to 55% on gains.

Japan’s Crypto Exchanges Grapple With ‘Travel Rule’ as Deadline Looms: The country’s crypto exchanges want to stagger implementation of the rule, which will require them to share customer data on transactions above a certain threshold.

China’s state-run news agency to launch NFT collection: Despite central bank officials’ call for heavy monitoring, Chinese state-run news agency Xinhua is launching an NFT collection.

Beijing court rejects monetary compensation in Bitcoin mining contract plea: The plaintiff in the case demanded 217.7 BTC in compensation for his Bitcoin mining infrastructure investment.

Tether lauds Myanmar shadow government for making USDT an official currency: The stablecoin issuer called NUG’s USDT adoption a significant event that goes “beyond the potentials of cryptocurrency.”

Myanmar shadow government declares stablecoin USDT an official currency: The NUG finance minister said using Tether would enhance trade speed and payment efficiency.

Rest of the World

Paraguay’s Senate Approves Proposal Regulating Crypto Mining and Trading: The bill, which seeks to take advantage of the Latin American country’s energy surplus, will be discussed by the Chamber of Deputies in 2022.

The Senate of Paraguay passed a bill on Thursday that regulates the mining and trading of cryptocurrencies. Paraguay’s Chamber of Deputies will discuss the bill in 2022, as confirmed on Twitter by Paraguayan Sen. Fernando Silva Facetti, one of the three authors of the measure. Miners — either individuals or companies — will need to request authorization for industrial electricity consumption and then apply for a license, the bill notes.

Paraguay’s Industry and Commerce Secretariat will enable and supervise crypto mining within the country, according to the bill, with the country’s National Securities Commission, Anti-Money Laundering Office and National Electricity Administration also regulating the activity. Although the concept of exchange is not included, the bill also proposes a registry for any individual or legal entity seeking to provide crypto trading or custody services for third parties.

According to the bill, Paraguay consumes only a third of its energy producted and, if regulated, crypto mining activity could reach “the electricity consumption of thousands of megawatts that Paraguay currently has as surplus.”

One of the main attractions for mining companies is the cost of electricity in Paraguay, which is the lowest in the region at around $0.05 per kilowatt-hour, Paraguayan congressman Carlos Rejala told in June, adding that almost 100% of energy production comes from hydroelectric sources.

In July, Rejala presented a bill that sought to regulate ownership and registration of crypto and crypto mining operations.

Bank of Russia to allow crypto investment via foreign firms: Russian citizens and businesses will reportedly have the right to acquire Bitcoin, but not via local infrastructure.

Russia to decide between blanket crypto ban and legalizing exchanges in 2022: The world’s biggest country will reach a crossroads on crypto regulation as it enters 2022.

El Salvador Buys 21 Bitcoins on 21st Day of Last Month of 21st Year of 21st Century: In announcing the purchase on Twitter, President Nayib Bukele also noted the country’s land area is 21,000 square kilometers.

President Bukele fires back at critics on ‘Bitcoin experiment’: The adoption of Bitcoin is changing El Salvador’s economic landscape, according to the Salvadoran president.

Dubai World Trade Centre to create new crypto hub and become regulator: Another government-backed project in Dubai aims to set up an attractive environment for the crypto industry.

100 digital payment token firms in Singapore fail to win licenses: The Monetary Authority of Singapore wants to support crypto and blockchain adoption in the country but it’s also willing to recognize the risks.

Kazakhstan Piloting a CBDC on R3′s Corda Platform: The country’s central bank is expanding the pilot of a digital tenge and will decide if it wants to launch the token by the end of 2022.

Teenage Suspect in $16M DeFi Hack Wanted for Arrest in Canada: In a possible DeFi first, Canadian law enforcement is now looking to track down a suspected hacker.

India’s Crypto Bill Likely to Be Delayed for Several Weeks: The bill, which needs Cabinet approval to be heard by the full parliament, isn’t on the agenda for today’s meeting.

Indian state government to accredit Web 2.0 and Web 3.0 blockchain startups: Telangana will launch the blockchain accelerator program in partnership with CoinSwitch Kuber and Lumos Labs.

Indian police commissioner issues a public warning against crypto frauds: On behalf of the Hyderabad City Police, Addl. Commissioner Shikha Goel asked Indian citizens to invest in crypto only through reputed and long-established players in this field.

‘Avoid Ban on Private Cryptocurrencies,’ Indian Technology Think Tank CIS Recommends: The recommendations include classifying crypto in a way that allows it to be regulated by either the central bank or the markets regulator.

Ukraine Commercial Bank to Test Digital Currency Built on Stellar: The pilot will test an electronic hryvnia in handling payroll for public employees along with peer-to-peer and merchant payments.

Another Ethereum Education Initiative Hampered by Iran Sanctions Fears: Gitcoin’s suspension of a grant for a coding course in Farsi follows a similar move by ConsenSys.


Derivatives Trade Association ISDA to Develop Common Standards for Crypto Assets: ISDA is aiming to characterize the different features of crypto assets and their relevance to contractual standards.

The International Swaps and Derivatives Association (ISDA), a trade organization, is working to develop common legal standards for derivatives linked to crypto.

ISDA published a white paper Tuesday aiming to characterize the different features of crypto assets and their relevance to existing contractual standards, and identify events that might cause problems with derivatives pegged to crypto assets. The events highlighted by ISDA include forks, airdrops, cyberattacks and changes in law or regulation. The paper also seeks to explore how digital assets can be valued and what happens when that valuation cannot be obtained.

As a global standard setter, ISDA’s standards are incorporated for derivatives trading in mainstream markets such as bonds and equities. Having an equivalent template for crypto could be a boon for institutional investment into the digital asset market.

ISDA’s announcement followed less than a week after crypto exchange FTX’s U.S affiliate became a member of the association. As one of the most prominent derivatives platforms in crypto, FTX has a 24-hour trading volume of nearly $14.5 billion, according to CoinGecko.

Bitcoin book for American policymakers gets 5x funding on Kickstarter: With this book, Jimmy Song and a group of seven writers intend to reduce the policymaker’s reliance on traditional media’s narrative on Bitcoin and cryptocurrencies.

Binance joins fresh crypto hub by Dubai World Trade Centre: Binance will assist crypto exchanges and businesses to become licensed in Dubai in cooperation with the local government.

Arsenal football club in dispute with ASA over ‘irresponsible’ crypto ad: Following the ASA’s decision, Arsenal announced that it would appeal against it and stated that it had provided further information regarding financial risks.

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