Compliance Wednesday: Latest Regulatory Updates in Crypto
Hey everyone,
Welcome back to Compliant Wednesday with the latest batch of policy updates from our around the world:
- 🇺🇸 Chamber of Digital Commerce responds to IRS Form 1099-DA
- 🇪🇺 ECB releases CBDC progress report
- 🇮🇹 Italy enhances crypto market surveillance
🇺🇸 Chamber of Digital Commerce responds to IRS Form 1099-DA
The Chamber of Digital Commerce, a blockchain industry trade association, has given feedback on the IRS’s proposed Form 1099-DA for reporting digital asset transactions. They emphasized the need for simplifying the form for brokers and privacy concerns regarding the amount of information requested. The Chamber suggested that the form should only ask for essential information for tax reporting, with brokers keeping additional details for IRS examinations. They also expressed concerns about the form requesting sensitive information like transaction IDs and digital asset addresses, which could invade taxpayer privacy.
Our take:
The Chamber of Digital Commerce’s pushback on the IRS’s proposed Form 1099-DA is crucial for protecting privacy and streamlining tax reporting for digital assets.
Read more here.
🇪🇺 ECB releases CBDC progress report
The European Central Bank (ECB) released its first progress report on developing a central bank digital currency (CBDC), focusing on privacy provisions and methods for conducting offline transactions. The report promised pseudonymization, hashing functions, and encryption features to safeguard against tracking individuals by transactions. It also outlined restrictions on payment service providers from using consumer financial data without explicit consent and discussed support for offline transactions directly between parties. The report mentioned a timeline for the Rulebook Development Group to finalize the first draft of its technical and regulatory CBDC framework by the end of 2024.
Our take:
The ECB’s CBDC progress report highlights efforts to ensure privacy and enable offline transactions. Their focus on encryption and user consent reflects our values of transparency and consumer protection in the digital asset space.
Read more here.
🇮🇹 Italy enhances crypto market surveillance
Italy is planning to increase its surveillance of the cryptocurrency market in line with the European Union’s regulatory framework. The new regulations aim to crack down on insider trading and market manipulation, with fines ranging from 5,000 to 5 million euros for violations. The European Union’s Markets in Crypto-Assets (MiCA) regulatory framework, introduced in 2022, is also affecting blockchain firms and decentralized finance (DeFi) protocols. Fully decentralized networks are exempt from reporting requirements, but protocols using intermediaries may need to decentralize or comply with the framework’s regulations. In response to these regulations, centralized exchanges like Binance and Uphold are making changes to remain compliant, with some stablecoins being delisted.
Our take:
Italy’s move to enhance crypto market surveillance demonstrates a rigorous approach to curbing market manipulation and insider trading. Following the EU’s MiCA framework, this step underscores our dedication to fostering a secure and transparent crypto environment while adapting to regulatory requirements.
Read more here.
And that’s it! What do you think about this week’s news? Let us know in the comments!
