Global regulatory round up newsletter (June 28 to July 13)

Regulation News

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Binance, the world’s largest cryptocurrency exchange, gets banned by UK regulator

According to reports, Britain’s Financial Conduct Authority said that Binance Markets Limited “is not permitted to undertake any regulated activity in the U.K.” From June 30, Binance must notify U.K. users of the FCA’s restrictions in a prominent place on its website and apps. It’s the latest sign of a growing crackdown on the cryptocurrency market from regulators around the world.

Binance Deploys New AML Solution Amid Regulatory Pressure

Binance has deployed a new AML compliance solution in the face of a ban in the UK and warnings from Japanese and Thai regulators.

Binance has announced that it has deployed a commercial solution called CipherTrace Traveler to achieve compliance with FinCEN (Financial Crimes Enforcement Network) and FATF (Financial Action Task Force’s) travel rule regulations. This makes Binance the first crypto exchange to deploy Traveler, which was released in March. The solution automatically scans addresses associated with incoming cryptocurrency transactions, verifying the originating VASP and recipient VASP to each other, reported a crypto news site.

Coinbase Approved to Offer Crypto Custody in Germany 

According to reports, Coinbase has received a new crypto custody license to operate in Germany. The company has shown a commitment to work with national regulators.

Meanwhile, other crypto exchanges have fallen short of regulators’ expectations.

The price that President Bukele is ready to pay to turn El Salvador into a bitcoin nation

Nayib Bukele, the president of El Salvador, is taking his public persona of a millennial disruptor to new heights and to a place where no one can predict the consequences. The Central American country is going to be the first in the world to adopt bitcoin as an official currency, a decision that has been announced in English and fast-tracked by a parliament that is controlled by his party, and without offering much explanation to citizens, reported a crypto news site.

TP ICAP launches a crypto trading platform

The UK-regulated crypto trading platform promises to boost the Bitcoin price. Microstrategy, like other institutional organizations, invests in Bitcoins on their decline

TP ICAP, one of the best brokers globally, announced the launch of their crypto trading platform. This is achieved in partnership with Fidelity Investments and Standard Chartered. With this new partnership, the company seeks to make cryptocurrency trading very similar to stocks, bonds, and currencies. This platform will show a post-trading ecosystem with a crypto custodian system and separate settlements. This will reduce the risk caused by institutional actors, reported a crypto news outlet.

South Africa wants to implement crypto regulations ASAP

In South Africa, cryptocurrency regulations have reached their peak following the news about the Cajee brothers and Africrypt. The South African government is also guided by the measures of international authorities on crypto.

The CEO of South Africa’s largest banking regulator, Kuben Naidoo, thinks that crypto regulations are necessary. Prudential Authority, a South African regulatory agency, has proposed anti-crypto measures expected to be approved soon, reported a crypto news site.

New Bill to Ban Crypto Payments in Iran, Support Mining and Regulate Exchange

According to reports, members of the Islamic Consultative Assembly, the Iranian parliament, now have a plan to put the crypto space in order. The new bill, drafted under the supervision of the parliamentary Economic Commission, allocates responsibilities among regulators and answers some outstanding questions to determine the future of cryptocurrencies in Iran.

If adopted in its current version, the draft law would ban the use of cryptocurrencies as a means of payment in the Islamic Republic, Tasnim News Agency reported. Besides crypto payments, other domestic transactions with cryptocurrency would also be prohibited. Iranian lawmakers have provided for only one exception and that’s reserved for a state-issued digital currency (CBDC).

Japan’s FSA says regulations for DeFi space might come soon

The Financial Services Agency (FSA), Japan’s top financial and cryptocurrency regulator, recently published a report pertaining to decentralized finance (DeFi), blockchain and digital assets. The authors of the report concluded that there may be a need for the country to come up and eventually establish regulations for the DeFi space, reported a crypto news website.

Singapore’s Financial Watchdog to ‘Follow Up’ on Global Binance Concerns

The Monetary Authority of Singapore (MAS), the country’s financial regulator and central bank, said it is closely watching the regulatory developments surrounding Binance Holdings Ltd., owner of the Binance crypto exchange.

The country’s financial watchdog is expected to “follow up” with the company’s local subsidiary Binance Asia Services Pte, Bloomberg reported. The subsidiary has a grace period while it awaits a review of its license application. The move comes on the heels of Binance’s showdown last week with U.K. regulators over whether the exchange business had regulatory blessings to operate in the country. Japan had issued a similar notice the day before warning Binance wasn’t registered to do business in the country.

Cryptocurrencies aren’t all diamonds and roses — lawsuits from people who lost big are piling up with exchanges

According to reports, Crypto exchanges can run into trouble with investors, regular users or even regulators, but the impact may be on many. Big exchanges like Binance, Bithumb, and others are facing lawsuits in various countries. The US Securities and Exchange Commission’s (SEC) investigation into Ripple could also hurt investors, depending on the outcome.

LINE Launches Blockchain Development Platform for CBDC Use

South Korean communications company LINE has launched a blockchain platform for development called Line Financial, according to an official post made on July 9. The goal of the platform is to eventually facilitate the optimal use of a central bank digital currency (CBDC).

Saying that the platform provides excellent security and performance, and guaranteeing “the completeness of the payment required to confirm the transactions required by the CBDC business,” LINE expects that the platform can handle large transaction volumes. It will also keep payment information confidential, besides having measures in place to ensure that assets can comply with diverse financial regulations.

Busan tests potential as blockchain industry hub

Blockchain experts gathered in Busan — a city designated as a blockchain special zone — to assess the city’s potential to become the center of a global digital information ecosystem.

Introducing the city’s blockchain projects that are taking place here, Shin Chang-ho, director of the Future Industry Bureau of Busan Metropolitan City, said the blockchain technology has paved the way for the nation’s port city to transform into a financial hub and a global logistics center. “The city has supported blockchain projects to test their technologies and services without much concern about the regulations,” Shin said at a conference hosted by Korea CEO Summit, reported a crypto news outlet.

Using crypto for payments is very risky, Thai Central Bank warns

According to reports, the Bank of Thailand has warned against the use of cryptocurrencies for payments.Bank cited digital asset’s high risk of money laundering and price volatility as reasons against their use. However, the bank is planning to launch its CBDC next year.

Crypto Derivatives Exchange Bybit to Introduce Stringent KYC Policy

According to reports, the British Virgin Islands-based Bybit Fintech Limited has announced the cryptocurrency derivatives exchange is introducing an updated know-your-customer (KYC) policy on July 12. Bybit notes that it already had certain KYC requirements implemented, but the new system reform is meant to “improve security compliance for all traders.”

The Ukraine-based e-bank platform aims to introduce a Bitcoin trading feature to its users

According to reports, Monobank is seeking to become the first banking institution in the Ukraine to offer debit crypto services to its customers. Oleg Grokhovsky, the bank’s chief executive, stated yesterday that the institution had successfully undertaken a pilot program to integrate crypto trading into the bank’s services. The crypto platform that the bank plans to offer would enable customers to buy and sell crypto using debit cards.

Huobi bans crypto derivatives trading for users in China

Crypto exchange platform Huobi has updated its user agreement document, banning crypto derivatives trading for customers in China

According to the updated user agreement section of the Huobi Global website, the ban on crypto derivatives trading covers users in jurisdictions such as China, Taiwan, Israel and Iraq. Other banned countries include the United Kingdom — restricted to retail customers — as well as Bolivia, Bangladesh and Ecuador, to mention a few, reported a crypto news site.

South Korea’s ‘kimchi coins’ feel heat as crypto rules tighten

According to reports, Singapore has fallen one rung to fourth place in this year’s Global Fintech Rankings. And while it still takes the top spot among countries in the Asia-Pacific, the Republic faces stiff competition from countries like Australia, China and Japan, which have moved up the leaderboard this year.

The second annual index, produced by fintech analytics provider findexable in partnership with cloud banking platform Mambu, looks at over 80 countries, 264 cities, and over 11,000 fintechs. The index scores each location for the quantity and quality of privately-owned fintech companies, as well as the local business environment.

South Korea: Woori Bank the Latest to Enter the Crypto Custody Business

Woori Financial Group which is South Korea’s third-largest banking group by the total value of assets under management announced its foray into the digital asset custody business, a report by The Korea Economic Daily confirms.

Per sources close to the matter, the financial group’s banking offshoot – Woori Bank – has agreed to establish a digital asset custody joint venture with a bitcoin-based fintech solutions provider called Coinplug Inc.

Notably, Coinplug will be the dominant shareholder of the newly formed JV – called D-Custody – while Woori Bank will be the second-largest shareholder in the entity. The proposed JV is speculated to be incorporated by next week at the earliest.

Crypto Exchanges in South Korea Planning to Lodge a Constitutional Appeal Against the Gov

According to reports, South Korean crypto exchanges may sue the government for passing the regulatory buck upon banks. Most of the crypto exchanges in South Korea fear closure owing to the new anti-money laundering regulations that require them to submit a document to prove they have a real banking account with the native banks by September 24. However, the banks are refusing to offer their services in fear of facing penalties from the chief regulatory body.

Only a handful of banks namely K Bank, NH Bank, and Shinhan Bank are conducting a risk assessment for a few top crypto exchanges such as UPbit, Bithumb, Coinone, and Korbit. However the same is not true for smaller exchanges.

Crypto Investing has Left Gen Z Koreans With Massive Debt, Claims Government Official

According to the Korean Hearld on Thursday (June 7, 2021), Rep. Kim Han-jeong of the Democratic Party of Korea made his statement based on data by the Financial Supervisory Service. The younger generation in the data comprised millennials and generation Z (Gen Z), which also included people born from the 1980s.

The data presented by the government official showed that back in 2019, the younger generation accounted for 33.7 percent of South Korea’s household debt. The percentage increased to over 45.5 percent in 2020, and further rose to more than 50 percent in 2021.

Furthermore, the data reportedly revealed that the younger generation’s household debt from local banks skyrocketed from 4.4 trillion won ($3.8 billion) in March 2020 to 26 trillion won ($22.6 billion) in March 2021. Home-backed lending from millenials and Gen Z grew from 3.17 trillion won (~$2.8 billion) to 18.3 trillion won ($16 billion). Credit loans also increased to 7.67 trillion won ($6.6 billion), from 1.29 trillion ($1.1 billion) won on the year.

Poland’s UKNF Reminds Crypto Market Is Not Regulated, Mentions Binance

According to reports, the Polish Financial Supervision Authority (UKNF) issued a warning about Binance, a major cryptocurrency exchange, in the wake of the recent strain of announcements made by other regulators globally. According to the press release, the watchdog noted that as Binance Markets Limited is a cryptocurrencies exchange, such a market “is neither regulated nor subject to supervision” in the country.

South Korean Shinhan Bank joins Klaytn’s blockchain governance council

Shinhan Bank, one of the largest banking institutions in South Korea, has entered into a partnership with Klaytn, a global blockchain platform developed by Kakao’s subsidiary Ground

According to the announcement, Shinhan Bank has joined Klaytn’s blockchain governance council and become a member of the co-governance of the Klaytn blockchain. As part of the new partnership, Shinhan will be also involved in the development of Klaytn-based digital services to support fintech innovation

Crypto Miners in Kazakhstan to commence tax payments in 2022

According to reports, the government of Kazakhstan has put forward a new taxation law for the country’s crypto mining sector – a decision that has raised eyebrows among businesses. According to a government communique, the bill was signed last month and is set for enactment from January 1, 2022.

The authorities of the Central Asian country expect the new regulation to generate several billions of Kazakhstani tenge for the national treasury. However, reports in the media speculate that several businesses have started demurring the taxation law, citing that the move could potentially cripple the country’s budding crypto mining sector.

Crypto executives and companies are flocking to Singapore to take advantage of its crypto-friendly regulations and growth potential

Singapore has been attracting crypto companies and execs such as the US-based exchange Gemini. Meanwhile, the rest of the world is set to clamp down on cryptocurrency businesses like big exchange platform Binance. Crypto companies told Insider they launched offices in Singapore because of its regulatory environment and its potential for growth, reported a crypto news site.


USA Is the Most Crypto-Ready Country, According to a Recent Research


The cryptocurrency platform – Crypto Head – ranked the USA as the most prepared nation for the widespread adoption of digital assets. On the other hand, Cyprus is the country most interested in virtual currencies, reported a crypto news website

Thai SEC and Cayman Islands regulator take action on Binance

Binance, the leading cryptocurrency exchange by trade volume, continues to face scrutiny from regulators regarding the legality of its operations in certain countries.

Thailand’s Securities and Exchange Commission (SEC) and the Cayman Islands Monetary Authority (CIMA) are the latest financial regulators to announce a regulatory crackdown on Binance

Thai SEC announced that the agency had filed a criminal complaint against Binance, launching a criminal procedure and an investigation for allegedly operating a digital asset business without a license. The authority said that Binance had provided crypto trading services via its website by “matching orders or arranging for the counterparties or providing the system or facilitating entry into an agreement”, reported a crypto news site.

Fake Tesla, Apple stocks have started trading on blockchains

According to reports, fake versions of Tesla Inc., Apple Inc., Inc. and other big stocks, as well as a few popular exchange-traded funds, have been created by the projects Mirror Protocol and Synthetix over the past year. The tokens, and the programming that allows them to trade, are engineered to reflect the prices of the securities they track without any actual purchases or sales of the real stocks and ETFs involved. So far, volumes are just a tiny fraction of those on regulated exchanges. But for crypto enthusiasts, the potential upside is huge.

Even as India and China clamp down on crypto, Philippines and Vietnam are considering crypto friendly regulations

According to reports, the national stock exchange of the Philippines wants to bring crypto assets under its purview, while Vietnam’s central bank has been asked to implement a pilot program for cryptocurrencies.

Both of these countries are looking to introduce new regulations to bring cryptocurrencies into the mainstream. The Philippines and Vietnam have the highest cryptocurrency use rate in Asia.

And, they both seem more optimistic about digital tokens compared to their largest Asian counterparts — India and China.

India’s new crypto regulations are ready for the monsoon session of parliament, says the country’s Finance Minister

According to reports, India is inching closer to regulating cryptocurrencies within its borders. The country’s Finance Minister, Nirmala Sitharaman told The Hindu that India’s crypto bill is ready and the government has taken inputs from industry stakeholders to prepare the document.

“We have done a lot of work on it. We have taken stakeholders’ inputs. The Cabinet note is ready. We have to see when the Cabinet can take it up and consider it so that then we can move it,” she said in her interview.


India’s cryptocurrency investors are playing with fire


Indian investors are flocking to cryptocurrencies like never before and the trend could be a dangerous one.


Indians had parked nearly $6.6 billion (Rs49,189 crore) in cryptocurrencies until May this year, as compared to around $923 million until April 2020. The country ranks 11 out of 154 nations (pdf) in terms of cryptocurrency adoption, as per blockchain data firm Chainalysis.


Many believe that this growth is still just the tip of the iceberg and many more Indians will likely flock to digital coins in the near future. “India has a population of 1.39 billion that is predominantly young which is seen as tech-savvy and more adaptable to crypto saving,” Harish BV, co-founder of Unocoin, which has a userbase of 1.3 million in India, reported a finance news website.


El Salvador’s crypto-friendly plans are facing some important questions


El Salvador’s move to accept Bitcoin as legal tender within its borders has been hailed as a positive move from the industry, but experts are starting to find flaws in that plan. In a report last week, the investment bank, JPMorgan, said that choosing to make Bitcoin as a mode of payments in the country may put “potentially a significant limitation on its potential as a medium of exchange.” The bank was primarily concerned about the illiquid nature of Bitcoin.

Essentially, while El Salvador may consider cryptocurrency as a valid exchange medium within its borders, money is a global concept. The country has to eventually convert its digital wealth into currencies that can be used as a mode of exchange with other countries — in most cases, the US dollar. And the only way to convert crypto to any fiat currency is by finding someone who will pay you fiat money in exchange for it, Business Insider reported

FCA Is Tightening Cryptocurrency Regulation In The U.K.

According to reports, The Financial Conduct Authority is implementing tight regulations in the cryptocurrency space and cracking down on some crypto platforms. The tight regulations have seen more crypto firms withdraw their applications from the regulator.

UK’s Financial Conduct Authority is keeping an eye on the cryptocurrency market after it was appointed anti-money laundering and counter-terrorist financing regulator of crypto-asset firms earlier this year.

Mexican billionaire wants to introduce Bitcoin to banking — but regulators aren’t having it

The third-richest man in Mexico wants to accept Bitcoin in his bank. Regulators in the country issued a joint statement warning investors that the same isn’t allowed. Mexico does have a history of being friendly to crypto companies.Regulators and businessmen in Mexico may have to go head-to-head in the fight to bring cryptocurrencies into the country.

Within a day of Mexico’s third-richest billionaire announcing his intention to introduce Bitcoin into the banking system, Mexico’s Finance Minister, the Central Bank of Mexico, and the Securities Commission issued a four-page joint statement to make it clear where they stand, reported a news website.

SoftBank invests $200 mln in Latam cryptocurrency exchange

Japan’s SoftBank Group Corp (9984.T) has invested $200 million in Mercado Bitcoin, one of the largest cryptocurrency exchanges in Latin America, said Roberto Dagnoni, executive chairman and chief executive officer of 2TM Group, the trading platform’s parent company.

The investment, raised in a Series B funding round, was made through SoftBank Latin America Fund and represents the Japanese multinational company’s largest investment in a Latin American crypto company. As a result of the investment, 2TM said its valuation reached $2.1 billion.

The SoftBank capital raise comes at a time when investor sentiment on cryptocurrencies has soured amid regulatory crackdowns in China, Britain and Japan, reported Reuters.

Bitcoin Becoming Legal Tender in Paraguay? ‘Impossible’, Says Congressman

Paraguayan congressman Carlos Rejala, who on June 17 got the crypto community excited when he tweeted about upcoming Bitcoin-related legislation, now says that he was not talking about making Bitcoin legal tender in his country.According to reports, El Salvador President Nayib Bukele announced during a national address on Thursday (June 24) that the bill to make Bitcoin legal tender will become effective in the central American nation on September 7.

As you may remember, the “Bitcoin Law” got passed by El Salvador’s Legislative Assembly on June 9. Mean while, over in South America, Paraguayan congressman Carlos Rejalat said in a tweet “country needs to advance hand in hand with the new generation” and that there is “an important project to innovate Paraguay in front of the world”.

Vietnam Changes Tune on Crypto with Pilot Plans

Vietnam’s central bank will begin piloting the use of crypto technology on Prime Minister Phạm Minh Chính’s request, Vietnam News has reported. The development is something of a U-turn for Vietnam, which has historically displayed aversions towards cryptocurrencies.

Countries around the world have shown conflicting views on the asset class to date.

Crypto exchanges in Europe may have to store all transactional data as regulators set up a new anti-money laundering watchdog

According to reports, to jump-start travel after the pandemic, a number of digital health passes – sometimes called vaccine passports – are now emerging around the world

Cryptographic technologies, such as digital signatures and blockchain, are being used to ensure that health records are authentic, secure and private Approved to Offer Bank Transfers in Malta is the first cryptocurrency firm to acquire Malta’s Electronic Money Institution (EMI) license. The license permits the firm to issue payment cards and offer bank transfers to customers in the European island nation. Regulatory concerns have characterized the last few months in crypto, with Binance suffering facing intense scrutiny from several official bodies, reported a crypto news site.

Coinbase plans to launch a cryptocurrency app store

According to reports, leading US crypto exchange Coinbase has revealed plans to launch a cryptocurrency app store offering third-party developed products.

Coinbase CEO Brian Armstrong has revealed that the cryptocurrency exchange is planning on launching a crypto app store. The app store would allow third-party developers to develop and host their products.

In his Medium post, Armstrong said the rise of Decentralised Finance (DeFi), non-fungible tokens (NFTs), smart contracts, Decentralised Autonomous Organizations (DAOs) and more had created the need for Coinbase to expand its services to help more people access the decentralised economy.


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