BAR global crypto regulatory round-up May 12 – May 26

May 27, 2021

Regulation News

Japanese MP Pro-Crypto Explains Crypto’s Vision, NFT Regulatory Future

According to reports, Japan’s most vocal pro-crypto MP has spoken out on his vision of Japan’s crypto regulation, claiming that supporting non-fungible tokens (NFTs) could help create a new growth engine for cultural exports.

The comments come from Shun Otokita of the Japan Innovation Party, the third most represented party in the Japanese lower house, the House of Councilors, in a video interview hosted by ConnecTV, where the MP claimed that NFTs could become a “weapon” in the battle to export Japanese game, manga, music and anime content to foreign markets.

South Korean crypto clampdown pushes many exchanges to precipice

According to reports, to win a business licence as a legal trading platform, Korean exchanges are required to partner with local banks to open real-name bank accounts for customers. But banks are concerned that this could leave them liable for any money laundering in digital currencies.

Now, a deadline of September 24 from the Financial Services Commission is looming, and only a handful of exchanges are expected to meet the requirements, reflecting the pressure on the thousands of crypto exchanges that have sprung up around the world while global regulators tighten up on the market.“Many in the [global crypto] industry fear a big-four regulated exchange scenario similar to South Korea,” said one crypto market executive.

FSC chief urges crypto investors to use real-name accounts for protection

 South Korea’s top financial regulator said that cryptocurrency investors would be provided protection under the revised financial transaction information law.

“The amended Act on Reporting and Using Specified Financial Transaction Information took effect on March 25 and crypto exchanges are to file for regulatory approval by Sept. 25,” Financial Services Commission Chairman Eun Sung-soo told reporters after delivering a keynote speech at 2021 Korea Fintech Week in Seoul, reported a local news site.

Top crypto exchange Binance under federal investigation — here’s why

According to Bloomberg, the exchange is being probed by the U.S. Department of Justice and Internal Revenue Service (IRS) in relation to possible money-laundering and tax-related offenses. The report claims that officials from both agencies have sought information regarding Binance’s business dealings, and that they are exploring potential wrongdoing by both the exchange’s employees and customers.

Although specific details about the investigation are thin, the report claims that the U.S. government is wary of the use of cryptocurrency in relation to criminal acts, such as for money laundering and ransomware attacks. Additionally, the IRS has started cracking down on potential tax evasion offenses related to cryptocurrency trades.

Hungary is halving taxes on cryptocurrency earnings to boost its COVID-hit economy

Hungary’s Minister of Finance Mihály Varga announced that the country’s government would halve capital gains tax on cryptocurrency earnings from 30.5 per cent to 15 per cent as part of their COVID-19 relief programme.

Announced in a video posted on Facebook, the news will make the EU country a competitive jurisdiction with respect to capital gains tax on crypto assets and will likely please Hungarian crypto investors who are set to receive a 50 per cent tax cut on those earnings from 2022.

Three South Korean Banks Stop Working With the Nation’s Crypto Exchanges

According to a report, about three South Korean native Banks have stopped operating with the nation’s crypto exchanges. Of note, the Bank’s strict decision on the exchanges came due to the country’s severe and unfriendly regulatory environment.

To mention a few, the aforementioned Banks include Woori Financial Group, KB Financial Group, and Hana. Moreover, the banks again emphasized that the South Korean regulations mainly air unfavorable conditions towards crypto exchanges.

Korea facing backlash for banning police from owning crypto

South Korea’s ban on police officers holding cryptocurrencies was never going to be an easy sell, not least to the individual men and women who make up the force. Now, as its implications sink in, it’s generating a backlash among the rank and file.

The ban has irked many police officers, and their discontent with it is becoming harder to ignore. Incheon Ilbo is one of a number of media outlets that have reported disparaging comments from officers that disapprove of the guidelines, arguing that denying an individual’s right to make economic choices is an unreasonable infringement on their property rights., reported a crypto news website.

European Central Bank Publishes Risk Report on Bitcoin, Compares the Crypto to the Tulip Mania

According to reports, the European Central Bank published a new report on the financial stability of the European Union. The report, titled the Financial Stability Review (FSR), detailed potential risks of Bitcoin and other crypto-related assets.

In the context of the broader economy, the ECB stated that “signs of exuberance” in crypto assets were potentially concerning, but that financial stability risks were limited.

Bank of England’s Bailey calls crypto-currencies ‘dangerous’

According to reports, Bank of England Governor Andrew Bailey said that crypto-currencies and similar assets were a danger to the public, reiterating his long-standing concern about them.

“I’m sceptical about crypto-assets, frankly, because they’re dangerous and there’s a huge enthusiasm out there,” Bailey told the British parliament’s Treasury Committee.

Bailey has previously said people should only invest in crypto-currencies if they are prepared to lose all their money, and warned that assets such as bitcoin do not fulfil key functions of a standard means of payment.

Banking Software Provider Temenos Brings Crypto Asset Access to Clients

Temenos, a provider of banking software, has teamed up with crypto-technology firm Taurus to give clients access to digital assets. The two Switzerland-based firms will aim to “bridge the gap between traditional investments and digital assets,” Temenos product director Alexandre Duret said in a press release.

Hong Kong Announces Proposal to Ban Retail Crypto Trading

According to reports, the Hong Kong government has announced it is moving forward with plans to make licensing local crypto exchanges mandatory. The move will allow crypto trading to be done only by professional investors. To be a qualified investor, one must hold at least $1 million in their portfolio. This requirement will exclude a massive portion of crypto investors operating in Hong Kong.

Iran Detains Head of Local Cryptocurrency Company

According to reports, The chief executive of cryptocurrency company Bridge Oracle, Sina Estavi, has been arrested in Iran by the order of the special court on charges of “disrupting the economic system”.

“The firm provided unsupported crypto tokens, concentrated all capital in several wallets, created fluctuations to drain people’s capital, provided fake and unrealistic justifications as well as unreal pricing,” the cybercrime center of the Islamic Revolution Guards Corps (IRGC), said in a statement on May 17, accusing the company of fraud.

Beijing says it rejects pending U.S. legislation to counter China

China’s foreign ministry spokesman Zhao Lijian sai, it rejected a pending U.S. bill to counter China, and that Beijing would safeguard its own interests.

U.S. Senate Democratic Leader Chuck Schumer unveiled revised bipartisan legislation last week to approve $52 billion to significantly boost U.S. semiconductor chip production and research over five years to better compete with China, reported a finance news website.

DBS Launches Asia’s First Bank-Backed Trust Solution for Cryptocurrencies

DBS Private Bank has introduced a trust solution for the asset class via DBS Trustee, the bank’s wholly-owned, licensed trust company, to enable its private banking clients to invest, custodise and manage their digital assets.

According to DBS, this offering is Asia’s first bank-backed trust solution for cryptocurrencies, and builds on the DBS Digital Exchange (DDEX).

Launched in December 2020, DDEX enables institutional investors and accredited investors to tap into a fully integrated tokenisation, trading and custody ecosystem for digital assets, reported a crypto news website.

Bitcoin loses ground on concerns over regulations in China

Bitcoin, the biggest and most popular cryptocurrency, rose 8.75 per cent to touch $40,000, after plunging 14 per cent on 18th May to its lowest since late January

Bitcoin regained some ground on the 19th May  from the previous session’s brutal slide to four-month lows but was weighed down by concerns over tighter regulation in China and unease over the extent of leveraged positions in the cryptocurrency world. Bitcoin, the biggest and most popular cryptocurrency, rose 8.75 per cent to touch $40,000, after plunging 14 per cent on Wednesday to its lowest since late January, reported a crypto news outlet.

China’s latest move to tighten crypto regulation is not new, says HSBC

According to reports, China’s recent move to tighten crypto regulation is not a “new development”, according to Paul Mackel, global head of FX research at HSBC.

His comments come after Chinese Vice Premier Liu He and the State Council said in a statement that tighter regulation on cryptocurrency is needed to protect the financial system. Bobby Lee, founder and CEO of cryptocurrency wallet Ballet, expects bitcoin to rally in the coming months.

U.S. SEC chair says more investor protection needed on crypto exchanges

According to reports, U.S. Securities and Exchange Commission Chair Gary Gensler said that he would like to see more regulation around cryptocurrency exchanges, including those that solely trade bitcoin and do not currently have to register with his agency.

“This is quite a volatile, one might say highly volatile, asset class, and the investing public would benefit from more investor protection on the crypto exchanges,” he said at the Financial Industry Regulatory Authority’s annual conference.

His comments came one day after a brutal sell-off in bitcoin on concerns over tighter regulation in China and unease over the extent of leveraged positions among investors

Govt Could Set Up Panel To Look At Crypto Regulations In India

The new committee is looking to explore the use of blockchain for technological enhancement and suggest ways to keep track of cryptos in the form of digital assets instead of a currency.

The report highlights that the committee could also be asked to look at ways to operationalise the Reserve Bank of India’s digital rupee that’s currently in the works. Sources have also hinted that the finance ministry has been keeping tabs on the growth of cryptocurrency trading in India and is in conversation with stakeholders on potential supervisory risks that can arise.

Finance Minister Nirmala Sitharaman is expected to be briefed on the ongoing developments in the cryptocurrency domain by her team later this month, reported a local news website.

Paytm Payments Bank Pulls The Plug On Cryptocurrency Transactions

Indian crypto exchanges have not been able to facilitate cryptocurrency transactions that require transfer of INR to or from Paytm Payments Bank accounts via APIs since 10 PM on Thursday (May 20th). API-based real time cryptocurrency transactions won’t be possible on Indian exchanges in the immediate future as the new process will take a user 15 minutes to complete one transaction, reported a finance news website.

Cryptocurrency exchange Huobi to suspend services for new users in China

According to reports, Cryptocurrency exchange Huobi said on Monday that it will suspend services for new users in Mainland China. The platform will be more focused on expanding overseas business, it said in a statement sent to Reuters.

U.S. Treasury calls for stricter cryptocurrency compliance with IRS, says they pose tax evasion risk

According to reports, the Treasury Department announced that it will require any transfer worth $10,000 or more to be reported to the IRS.

“Cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly including tax evasion,” the Treasury said.

Investors have seen the value of bitcoin slide about 25% over the past month and talk of capitulation creep into online forums.

‘Time to Buy Bitcoin’ Luno Ads Banned in the United Kingdom

The UK’s Advertising Standards Authority introduced severe restrictions for the crypto space in the past year. According to reports, ASA continued with its tough stance towards digital assets and banned the popular Luno ads.

The Cryptocurrency app grabbed the watchdog’s attention with its posters displayed at bus and Underground stations in London. ASA described the adverts with the slogan “If you’re seeing Bitcoin on the Underground, it’s time to buy” as highly misleading.

Hong Kong swan song for cryptocurrencies

According to reports, cryptocurrency exchanges operating in Hong Kong must to be licenced by the city’s market regulators and will only be allowed to provide services to professional investors if new government proposals are actioned.

The city’s Financial Services and Treasury Bureau (FSTB) published its conclusion on legislative proposals on Friday to enhance its anti-money laundering and counter-terrorist financing regulations. The final report followed a two-month public consultation launched in November.

Russian Central Bank Confirms Digital Rouble Trials Commence in 2022

The head of the Russian Central Bank, Elvira Nabiullina, has confirmed that digital ruble trials will begin in 2022. Earlier, the central bank of the country expressed its intention to start testing a CBDC in April. Digital financial assets are considered property under the Russian legislation, according to a law implemented on Jan 1, reported a crypto news website.

South Africa’s Central Bank Starts Research On Retail-Focused Digital Currency

The South African Reserve Bank (SARB) has begun a study to investigate how a central bank digital currency (CBDC) would work for general purpose retail use alongside cash, according to a press release.

A retail CBDC is a digital form of cash which works to combine the best aspects of both cash and digital payments, the release stated.

With the study, SARB will investigate how a CBDC would impact its policy position and mandate, according to the release. The study will look at how a CBDC can be implemented practically across various tech platforms. It will take into account several factors, including policy, regulatory, security and risk management implications.

UAE investors favour crypto more than expats, poll shows

Emirati investors are more open to investing in cryptocurrencies and less concerned with more regulation than Western expats according to a recently published survey of UAE residents.

The survey, conducted by YouGov and commissioned by Holborn Assets, found that one in four (26%) of the 1,000 plus respondents view crypto assets as “exciting investment opportunities” and a further 44% would be willing to allocate over 5% of their investment portfolio to the nascent asset class, reported a crypto news website.

Senator warns lack of regulations could harm Australian crypto innovation

Conservative Australian senator, Andrew Bragg, has asserted that Australia must introduce better regulations for crypto assets if the country is to “stay ahead of the game” and foster innovation.

Appearing on Sky News, the member of the ruling Liberal Party — who is chairing a senate inquiry into Bitcoin and other digital assets — stressed that crypto asset products have already proliferated, emphasizing the need for Australia to cultivate a positive business climate and offer consumer protections for the burgeoning industry.

Dutch Central Bank Forced To Backpedal On Bitcoin Address Verification Procedures After Court Ruling

According to reports, The Dutch Central Bank has lost a legal battle over its uninformed and bureaucratic bitcoin address verification requirements.

Bitonic, the oldest Bitcoin exchange in the Netherlands, recently had its day in court with the Dutch Central Bank (DCB). At issue was the legitimacy of DCB’s mandate that Bitonic (and other Bitcoin exchanges and custodians operating in the Netherlands) implement very stringent “address verification procedures” in order to obtain the legally required registration with the DCB, reported a crypto news website.

 

 

 

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