Crypto regulation in the world: weekly digest #86

USA

This week, in Wyoming has passed a landmark bill, the Decentralized Unincorporated Nonprofit Association Act, to regulate DAOs as legal entities. This new law establishes a framework for recognizing DAOs as legal entities, addressing the challenges of fitting decentralized organizations into existing financial regulations. Unlike the previous attempt in 2021 that failed to attract DAOs to Wyoming, this new legislation uses the model of unincorporated nonprofit associations instead of LLCs, providing DAOs with legal existence, the ability to contract with third parties, appear in court, pay taxes, and have limited liability from the actions of other members. The bill aims to bring DAOs into the existing tax framework and generate revenue while potentially avoiding classification as securities under securities laws.

This move by Wyoming is significant in the crypto industry, with a major investment fund Andreessen Horowitz (a16z crypto) supporting the legislation and planning to work with portfolio companies to incorporate in Wyoming under this new legal status. The state's approach is seen as likely to become an industry standard for blockchain networks established in the US.

By recognizing DAOs as legal entities under this new law, Wyoming is paving the way for innovation and inspiration in decentralized structures while addressing the unique challenges faced by DAOs compared to traditional businesses. Earlier this year, Japan has also proposed new regulations for DAO.

Nigeria

Binance has decided to stop its services in Nigerian Naira due to enforcement actions from the Nigerian government. The Nigerian government has demanded nearly $10 billion in compensation from Binance, accusing the company of manipulating foreign exchange rates through currency speculation and rate fixing. Additionally, Binance is not authorized to operate in Nigeria and has faced allegations of operating illegally and fixing the country's exchange rate.

The decision to discontinue Nigerian Naira services comes amidst increased scrutiny from Nigerian regulators, with the House of Representatives' Committee on Financial Crimes investigating money laundering and terrorist financing allegations against Binance. This scrutiny led to the summoning of Binance's CEO by the committee for questioning. Two Binance executives were also detained following investigations in February, although they were not charged at that time.

Consequently, Binance will no longer support Naira deposits after March 5 and will convert any remaining Naira balances in user accounts to the stablecoin USDT. The company will delist all existing Naira spot trading pairs and has already removed Naira trading pairs from its peer-to-peer platform.

Nigeria is a significant crypto market, with a high level of cryptocurrency adoption and trading activity. Despite regulatory limitations and challenges, Nigeria's crypto market has defied the odds and emerged as a key player in the global crypto space. Nearly 35% of Nigerians aged between 18 and 60 are investing or trading bitcoin and other cryptocurrencies, showcasing a strong interest in digital assets and Nigeria's cryptocurrency usage remains the highest in Africa and among the most developed globally, with a year-on-year growth rate of 9%.

As we wrote before, Nigeria proposed a new state-owned stablecoin and its moves to take control over major exchanges operating in the country could be the part of efforts to prepare domestic market for all-new rules and regulations.

Uzbekistan

Tether, a stablecoin issuer, recently signed a Memorandum of Understanding with the Republic of Uzbekistan to collaborate on developing blockchain and peer-to-peer telecommunication infrastructure, as well as fostering innovation in the crypto space. This agreement aims to enhance the crypto infrastructure in Uzbekistan and promote technological advancements within the country.

The partnership between Tether and Uzbekistan signifies a significant step towards integrating blockchain technology into the country's infrastructure. By working together, they aim to create a conducive environment for blockchain projects and peer-to-peer communication systems, which can potentially revolutionize various sectors in Uzbekistan.

Furthermore, this collaboration is not only focused on infrastructure development but also on regulatory aspects. Tether has partnered with Uzbekistan's National Agency for Crypto Regulation to ensure that crypto activities within the country adhere to regulatory standards. This strategic partnership highlights a commitment to fostering a secure and regulated crypto environment in Uzbekistan.

News from other countries:

• FBI reports that in 2023 the volume of frauds and scams related to cryptocurrencies increased by 53%, and user losses amounted to more than $12.5 billion. Don’t forget to check your crypto!

• BRICS, an economic cooperation bloc comprising Brazil, Russia, India, China, South Africa and Saudi Arabia, is considering the development of a common blockchain-based payment system to reduce reliance on the US dollar and enhance international monetary cooperation. This initiative aims to create a multilateral digital settlement and payment platform that could potentially involve digital currencies and blockchain technologies.