Crypto Regulation News: UN sees blockchain technology as tool to fight climate crisis, Bill to study blockchain and crypto passes US House of Representatives, Digital Euro promises to protect people’s privacy, UK’s FCA bans Binance, Japan’s FCA issues Binance warning, and more
Vol. 71, 14th June — 28th June
TL;DR
- UN sees blockchain technology as tool to fight climate crisis
- Bipartisan bill to study blockchain and crypto passes US House of Representatives
- Biden nominee for Treasury Dept will prioritize crypto regulation
- SEC accuses CEO of crypto startup Loci of selling unregistered digital assets
- Biden hints at possible cybersecurity arrangement with Russia over ransomware attacks
- Bitcoin miners can prove green potential by undergoing ESG ratings check
- Digital Euro promises to protect people’s privacy, according to ECB board member
- EU to designate Bank of Spain, securities regulator for crypto oversight
- UK regulator approves fifth crypto company for crypto-asset register
- Norwegian FSA sees urgent need for crypto investor protection
- Top Chinese bank bans access to crypto
- South Korea seizes $47M worth of crypto for back taxes
- UK regulator bans Binance from regulated activities in the country
- Japan’s financial services regulator issues Binance warning
- Binance to cease operations in Ontario following regulatory crackdown
- Indonesia’s central bank marshals staff to enforce crypto payments ban
- Brazil stock exchange lists first Bitcoin ETF in Latin America
- South African banks block crypto trading on international exchanges
- Colombia’s Capital unveils $750K Blockchain Investment Plan
- Panama to present crypto-related Bill in July
- FATF says the majority of countries still haven’t implemented Watchdog’s Crypto Guidance
- How smart regulation can improve the future of blockchain
- El Salvador’s Bitcoin Fee Problem (and Solutions)
- Crypto is the most dangerous investment, Bank of Russia governor says
- Will regulation adapt to crypto, or crypto to regulation? Experts answer
- And more!
Reports
UN sees blockchain technology as tool to fight climate crisis: the United Nations will keep exploring the uses of blockchain technology to improve the reliability of data on harmful greenhouse gas emissions.
Amid ongoing concerns over Bitcoin’s carbon footprint, the U.N. has said that cryptocurrency’s underlying technology has massive potential for fixing global issues such as climate change.
The U.N. will keep exploring the uses of blockchain technology as a way to fight the climate crisis and help reach a more sustainable global economy, according to an article published on the official U.N. website on Sunday.
U.N. experts are confident that “cryptocurrencies and the technology that powers them can play an important role in sustainable development, and actually improving our stewardship of the environment.” Specifically, the article points out a number of environmental and sustainability benefits associated with blockchain, including its power to enable transparency and resistance to fraud, climate finance and clean energy markets.
Citing the U.N. Environment Programme’s partnership with the Technical University of Denmark, the article states that data on harmful greenhouse gas emissions is unreliable and incomplete in many countries. In providing an immutable record of carbon data, blockchain solutions can provide a transparent way for nations to take action to reduce their impact on the climate.
Blockchain technology can also be an important part of driving renewable energy sources such as wind and solar power by providing a tool to create clean energy markets. “As these sources are, by their nature, intermittent and decentralized, new forms of energy markets are needed,” the article notes.
Bitcoin miners can prove green potential by undergoing ESG ratings check: Bitcoin miners may opt for ESG ratings to prove “greenness” as environmental concerns loom over the entire crypto industry.
Smart contracts and the law: Tech developments challenge legal community: Regulators will be challenged to respond to and address smart contracts, as they represent a cross section of law and technology.
How smart regulation can improve the future of blockchain: Regulatory bodies must evolve with the markets they regulate, and when it comes to the crypto market, it becomes especially important.
An asset for all classes: What to expect from Bitcoin as a legal tender: New tech that reduces costs of international payments would “be a boon for poor countries that rely on remittances” — but will BTC as legal tender fix that.
El Salvador’s Bitcoin Fee Problem (and Solutions): Bitcoin fees would make the cryptocurrency mostly unusable for Salvadorans. Here’s how the first country to adopt BTC plans to tackle the fee problem.
El Salvador adopting Bitcoin could make it lose market dominance: The Salvadoran experiment is the shot heard round the world for the mainstream adoption of decentralized digital currencies as money.
Opinions
Will regulation adapt to crypto, or crypto to regulation? Experts answer: Blockchain technology promises to provide humanity and freedom with the rise of Web 3.0, a truly decentralized internet. Some even argue that the significant rise of the decentralized finance (DeFi) sector has become an important symptom of the conceptual shift from centralized services to decentralized ones, with Web 3.0 being its cornerstone.
Moreover, some even compare the invention of blockchain technology to the revolution brought by the advent of the internet itself. It is now becoming obvious that a lack of regulation would harm crypto innovations. As the decentralized technology sector has grown significantly, the space has started to attract increasing attention from regulators globally, which are targeting stablecoins, DeFi, NFTs, crypto assets, smart contracts, unhosted wallets, central bank digital currencies and so on. Meanwhile, some experts such as Caitlin Long, the founder and CEO of Avanti Financial, for example, see the started “crypto regulatory crackdown” as a positive trend, which will only benefit innovators. And others propose “a right way to regulate crypto.”
On the other hand, the current regulation is not suitable for crypto, and adjusting newly emerged decentralized technologies to it might ruin the core values of decentralization, bringing us back to where we started: with the centralized parties in control over the space. Is that the price we are willing to pay in order to become a regulated industry?
Here’s what crypto and blockchain industry experts think about the regulatory dilemma related to cryptocurrency.
‘Bitcoin will go all the way to $160,000 this year,’ says Celsius CEO: The highs for Bitcoin are yet to be seen this year, says Alex Mashinsky.
World-changing companies will rise from this sector of crypto markets, according to Mark Cuban: Mark Cuban thinks it’s inevitable that certain crypto and DeFi organizations will earn their status as “world-changing” companies — in a decade or two.
‘Bitcoin is not an asset that is designed to be leveraged,’ says Caitlin Long: The Avanti Financial CEO says Bitcoin shouldn’t be leveraged and that regulations for stablecoins are underway.
Not Just XRP? legal expert says SEC could target two additional Altcoins: US attorney Jeremy Hogan says he believes the U.S. SEC may target two additional altcoins after launching its battle with payments giant Ripple over the alleged illegal sale of XRP as an unregistered security.
NYC mayoral front runner Eric Adams says city will become ‘center of bitcoins’: “We’re going to become the center of life science, the center of cybersecurity … the center of bitcoins,” said Adams.
Ripple Settlement Coming? legal expert reveals when XRP lawsuit could conclude: Crypto legal expert and Ripple supporter Jeremy Hogan is hinting at when the San Francisco-based payments company’s lawsuit with the U.S SEC may conclude.
Federal Reserve official: Stablecoin growth is ‘exponential,’ deserves ‘attention’: Boston Federal Reserve President Eric Rosengren notes that Tether could be a “disruptor” to short term credit markets.
Crypto monitoring more effective’ than outright ban, dutch finance minister say: the minister was responding to calls by the head of Bureau for Economic Policy Analysis for a total ban.
Italian securities regulator head says crypto could negatively affect market: In a livestream Monday, Consob chairman Paolo Savona said if cryptocurrencies are left unregulated, they could lead to illegal activity.
Article 7 and Bitcoin’s Latin American Coup: El Salvador’s Bitcoin Law will make BTC a compulsory currency and create costs for everyday taxpayers — hardly an advancement for freedom or free money.
Powers On… El Salvador is the unlikely leader for sovereign adoption of Bitcoin as national currency: The question is not whether Bitcoin will be the future of money; the question is how, where and when it will be the future of money.
Bukele’s Bitcoin Blunder for El Salvador: Preached as a way to support an underbanked population, bitcoin will increase fees and risks for Salvadorans.
Why Bitcoin could be good for El Salvador: Adopting Bitcoin as legal tender could help the El Salvador economy grow, says our columnist, but there are risks if the government over-indulges new borrowing.
Crypto is the most dangerous investment, Bank of Russia governor says: The governor of the Bank of Russia has maintained a tough stance on Bitcoin despite growing criticism of how the bank has handled digital asset regulation.
Russian oligarch Deripaska blasts Bank of Russia for ignoring Bitcoin: Russia needs to move to Bitcoin to provide a “real financial instrument enabling independence in foreign trade settlements,” Deripaska argued.
USA
Bipartisan bill to study blockchain and crypto passes US House of Representatives: The Consumer Safety Technology Act passed quickly in the House, and if enacted would require the study of blockchain tech and digital tokens.
The Act is centered on consumer protection and includes digital token and blockchain research. The bill passed the 117th Congress within a week of its introduction, with a resounding 325 votes in favor of, and 103 votes against.
This is not the first time this bill has reached this point however, and under the Trump administration, the bill passed the House in September 2020. It was then referred to the Committee on Commerce, Science, and Transportation before being shot down in the Senate.
Among other things, the bill calls for the Consumer Product Safety Commission to deploy a pilot AI program to aid consumer safety inspections, such as identifying consumer product hazards and tracking trends related to injuries involving consumer products.
Additionally, it calls for the Secretary of Commerce and the Federal Trade Commission (FTC) to “study and report on the use of blockchain technology and digital tokens.”
Democrat representative for California’s 9th district, Jerry McNerney sponsored the bill, which was co-sponsored by Democrat Darren Soto, along with Republicans Warren Davidson, Van Taylor, Michael Burgess, and Brett Guthrie.
The Consumer Safety Technology Act also includes two other bills touching on crypto. One is the Blockchain Innovation Act along with parts of the Digital Taxonomy Act which mandate the FTC report on “unfair or deceptive acts or practices in transactions relating to digital tokens.” Rep. Soto first introduced the latter bill in April 2019, but did not receive a single vote at the time.
Both bills are aimed at stopping deceptive acts related to crypto from individuals and “unscrupulous companies.”
On the House Floor, Soto emphasized the importance of ensuring consumer protection from volatility and crim:
“When we look at market volatility, the use of cryptocurrency for ransomware, and recent attacks like the Colonial Pipeline and tax evasion, it’s critical that we get on the front end of this.”
The Blockchain Innovation Act requires the study of investment trends in the crypto industry, the potential risks and benefits of blockchain tech designed for consumer protection, and areas in which regulation could foster domestic innovation.
New crypto working group in Congress will feature Blockchain Caucus, Fintech Task Force leadership: More details have emerged about the new working group of Democratic House members looking to address crypto. Congresswoman Maxine Waters announced the formation of a new working group for House Democrats to focus on cryptocurrency policy.
Biden nominee for Treasury Dept will prioritize crypto regulation: Brian Nelson said he would push for implementation of the Anti-Money Laundering Act of 2020, “including new regulations around cryptocurrency.”
Market Wrap: Bitcoin Declines as Fed Projects Interest Rate Rise in 2023: The U.S. central bank also increased estimates of coming inflation to 3% from the 2.2% projection in March, largely due to transitory factors.
Crypto seller in New Orleans charged with running an unlicensed money transmitting business: The U.S. Department of Justice said that it has charged a New Orleans-based cryptocurrency seller with running an unlicensed money transmitting business.
U.S. Justice Department seeks crypto-specialized trial attorney for money laundering recovery: The DoJ’s Digital Currency Initiative is looking for a new crypto expert lawyer in the aftermath of several high-profile ransomware attacks.
SEC accuses XRP Army of issuing ‘false statements’ against its leadership on social media: The Commission argued that Ripple’s motion, if granted, would open the floodgates for the company to request testimony from high-ranking government officials.
SEC accuses CEO of crypto startup Loci of selling unregistered digital assets: The SEC charged John Wise and his company Loci Inc for allegedly selling an unregistered digital asset and making false statements related to its sale.
SEC is seeking additional comment as it weighs decision on VanEck bitcoin ETF: On Wednesday, the Commission said that it wants more input as it considers whether to approve a bitcoin exchange-traded fund (ETF) proposed by asset management firm VanEck.
Biden hints at possible cybersecurity arrangement with Russia over ransomware attacks: Joe Biden said that the U.S. and Russia might have the beginnings of a “cybersecurity arrangement that begins to bring some order” within the next year.
Europe
Digital Euro promises to protect people’s privacy, according to ECB board member: European Central Bank (ECB) executive board member Fabio Panetta promises that the digital euro will respect the privacy of consumers.
In a Financial Times report, Panetta says the digital version of the euro will offer more privacy to users compared to stablecoins issued by private companies. He highlights that the ECB is not interested in monetizing user data.
“If the central bank gets involved in digital payments, privacy is going to be better protected… because we are not like private companies. We have no commercial interest in storing, managing or monetizing the data of users.”
According to Panetta, the ECB had conducted tests to separate the identity of the users from their payment details to ensure the public that the transactions remain private.
“The payment will go through, but nobody in the payment chain would have access to all the information.”
UK regulator bans Binance from regulated activities in the country: The U.K.’s FCA has ordered crypto exchange Binance to stop undertaking any regulated activity in the country. But since the exchange pulled its application for the FCA’s crypto-assets register, it will be unable to offer unregulated services — such as spot trading — either.Binance has to stop these services in the U.K. by June 30.
UK regulator approves fifth crypto company for crypto-asset register: Mode Global Holdings, a London-listed fintech app, has become the fifth company to be added to the Financial Conduct Authority’s crypto-assets register. Mode now plans to decommission its “Bitcoin Jar” investment product to focus on building a payment system with a bitcoin cashback offering.
UK regulator warns against 111 unregistered crypto companies… and FOMO: The Financial Conduct Authority has warned U.K. consumers of dealing with 111 unregistered crypto firms, calling it “a very real risk.”
UK regulator commits more resources to assessing crypto firms, says HM Treasury: HM Treasury said the FCA has increased the resources it has allocated to assessing applications to the cryptoasset register.
EU to designate Bank of Spain, securities regulator for crypto oversight: Draft regulation also requires businesses offering crypto services in the EU to have a base in the bloc, Cinco Dias reports.
Santander pilots Elliptic’s crypto risk screening tool on client transactions: The leading Spanish bank has finished a pilot designed to identify risk among clients transacting crypto exchanges.
Norwegian FSA sees urgent need for crypto investor protection: Norway’s Financial Supervisory Authority says it only supervises crypto companies for money laundering.
$71B in crypto has reportedly passed through ‘blockchain island’ Malta since 2017: The Financial Action Task Force, a membership body of 37 jurisdictions and two regional organizations, has flagged Malta’s initial push to attract cryptocurrency business as “problematic.”
Asia
Top Chinese bank bans access to crypto, issues stern warning to rule breakers: China’s third-largest bank, the Agricultural Bank of China, has announced it is cracking down on cryptocurrency transactions.
Japan’s financial services regulator issues Binance warning: The Financial Services Agency said Binance isn’t registered to do business in the country.
South Korea seizes $47M worth of crypto for back taxes: Officials called it the largest “cryptocurrency seizure for back taxes in Korean history.”
South Korean exchanges halt trading on certain cryptos as regulatory pressure mounts: Upbit, Huobi and Coinbit are among the cryptocurrency exchanges outlined in the report that have halted trading on certain coins.
Thai regulators ban exchanges from trading meme tokens and NFTs: The Thai Securities and Exchange Commission enacted the ban on Friday, giving exchanges one month to comply with the new regulation.
Indonesia’s central bank marshals staff to enforce crypto payments ban: Indonesia’s central bank is sending supervisors out to ensure local financial institutions aren’t defying the nationwide ban of crypto payments this bull season.
Rest of the World
Bybit becomes latest crypto platform to be targeted by Canadian securities regulator: The action against Bybit follows a similar one the OSC took against KuCoin trading platforms earlier this month.
Binance to cease operations in Ontario following regulatory crackdown: Ontario’s crypto exchange crackdown continues as Binance plans to end operations Dec. 31, 2021.
Panama to present crypto-related Bill in July: Following El Salvador, opposition politician Gabriel Silva says he is seeking consensus to make cryptocurrency legal tender in Panama.
Brazil stock exchange lists first Bitcoin ETF in Latin America: QR Capital’s bitcoin ETF started trading on the Sao Paulo-based B3 exchange under the ticker QBTC11.
Colombia’s Capital unveils $750K Blockchain Investment Plan: Companies can apply to the Bogota Innovation, Technology and Creative Industries Fund for investment as of today.
Denied electricity, world’s 5th-largest mining pool leaves China for Kazakhstan: Crypto mining pool BTC.com is leaving China after local authorities withdrew its power supply.
Proposed crypto ban legislation reportedly under review by India’s government: Authorities in India are reportedly weighing up options concerning crypto regulations in the country.
Iran authorities seize 7,000 crypto miners in largest haul to date: The seizure comes less than a month after the country enacted a four-month ban on crypto mining in an effort to reduce nationwide power cuts.
Palestine’s Central Bank reportedly mulling a CBDC launch: Palestinians do not have an independent currency, and rely on the Israeli shekel and Jordanian dinar.
South African banks block crypto trading on international exchanges: Customers of Johannesburg-based bank Absa received an error message when attempting to buy crypto on Binance.
Founders of South African crypto investment firm — and $3.6B in Bitcoin — are missing: Africrypt investors were told not to inform police of the purported hack because it could slow the recovery of their funds.
Tanzania central bank may rescind crypto ban after presidential endorsement: President Samia Suluhu Hassan’s positive stance on crypto could see Tanzania’s central bank reversing its previous cryptocurrency prohibition.
Russian central bank ‘short-sighted’ regarding crypto, lawmaker says: A long-time member of the Russian State Duma has criticized the central bank’s approach to digital assets.
Bank of Israel testing Ethereum tech in digital shekel trial: The Bank of Israel is trying out Ethereum’s technology in a recently launched internal digital shekel trial, a spokesman said.
MISC
Cryptocurrency: The future of futures? Institutional inflow to crypto is only getting started, but the technology promises to improve the futures markets beyond crypto.
Most of the trading in cryptocurrency futures — around 85 to 90% — is yet to be regulated. This situation mainly arose because cryptocurrency futures markets sprang up while regulators were still grappling with more fundamental questions around the legal status of digital assets. BitMEX paved the way for cryptocurrency futures trading by using coin-margined and collateralized contracts. In doing so, the company avoided the regulatory requirements associated with fiat on-ramps. There are around a dozen major trading platforms currently, but only a small number of them have achieved regulated status.
Both the Chicago Mercantile Exchange (CME) and Bakkt are regulated by the United States Commodity Futures Trading Commission (CFTC). In Europe, Kraken Futures operates under a multilateral trading facility license awarded by the United Kingdom Financial Conduct Authority. In Switzerland, Vontobel and Leonteq offer mini-Bitcoin futures contracts via the SIX Swiss Exchange.
The regulatory situation may preclude traders in some countries from participating in trading on non-regulated venues. This circumstance is particularly true of the U.S., where exchanges are mindful that the CFTC is now pursuing BitMEX for violating Anti-Money Laundering regulations and the Bank Secrecy Act.
However, the U.S.-regulated crypto futures platforms have expanded their range of instruments beyond pure Bitcoin (BTC) futures, likely in response to increasing demand. The CME, for example, recently branched out beyond Bitcoin futures and options to provide Ether (ETH) futures too. In addition, Bakkt also offers Bitcoin monthly futures and options.
Unregulated platforms offer futures contracts and perpetual swaps against a broader range of altcoins, although only to traders in countries where they are permitted to operate. In any case, most liquidity remains concentrated in BTC and ETH futures, at least for now.
Despite their rapid growth, cryptocurrency futures markets are still very much in their infancy, particularly since the institutional inflow to crypto is only getting started. As the markets grow and develop, we will likely see new and more sophisticated instruments emerge, along with some blurring of the boundaries between traditional and digital finance. Furthermore, it seems likely that the regulatory situation will continue to evolve as more funds flow in. One thing is for sure: cryptocurrency futures have a long future ahead.
FATF says the majority of countries still haven’t implemented Watchdog’s Crypto Guidance: Only 58 out of 128 jurisdictions have stepped up, the anti-money laundering watchdog.
Crypto in Canada: Where are we today, and where are we heading? An exploration into the country’s crypto landscape today and what it means for the future of the digital asset industry in Canada.
Top US regulators issue big bitcoin warning, say investors must carefully consider these four risk factors: US regulators are warning investors about the potential risks associated with gaining exposure to the Bitcoin futures market.
3 reasons why China’s bitcoin crackdown isn’t all that bad: Improved decentralization and the potential for a greener mining industry are just some of the benefits to emerge from China’s latest anti-bitcoin action.
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