Шард
Sign upSign up
En
Go to articles pageGo to articles page
Views
22

Crypto regulation in the world: the amendments to the European MiCA and more

The EU

The European Parliament has postponed the final vote on the MiCA cryptocurrency regulation bill to 2023. Despite the bill proposal has been finalized back in October, a unified regulation of cryptocurrencies in Europe will not appear this year.

At the same time, the European lawmakers are developing several new proposals regarding the use of cryptocurrencies and virtual assets service providers (VASPs) regulation.

With the collapse of the FTX exchange, legislators around the world have been discussing the necessity of creation stricter rules for VASPs. So, despite the fact that the MiCA bill still has not entered into force, the European Parliament has already begun to discuss the need to supplement it with provisions that allow blocking advertising of crypto exchanges that are not licensed to operate in the EU countries.

It is assumed that legal framework will develop The European Securities and Markets Authority (ESMA). The collapsed FTX crypto exchange, which provided services to European citizens, was registered in the Bahamas and was not controlled by European regulators.

It is clear that most global crypto exchanges are registered outside the European Union. Some of them like Binance or Crypto.com are licensed to provide services in the countries of the Union, but most of them provide services for the EU citizens without any permission. Such well-known crypto exchanges as KuCoin, OKX, MEXC, Bybit, are registered in offshore jurisdictions where there are no such stringent requirements as those of the US or European regulators. At the same time, if a company does not support fiat money transactions, it may not even require KYC checks, as many offshore companies do, such as SimpleFX or BaseFEX.

After MiCa bill will come into force the European financial watchdogs will monitor active crypto companies that do not have permission to work with EU citizens. At the same time, most likely, companies with offshore registration will retain their dominant position, but will be forced to obtain a license to work with citizens of the Union.

European lawmakers are also considering proposals for a unified taxation of the crypto industry. It is assumed that fees from cryptocurrency companies can reach €2.4 billion. The directive may be adopted by the European Commission in the near future.

The document claims that the proposal eliminates a «regulatory gap» for crypto investors and opportunities for tax evasion. The project also aims to ensure that member states receive equal rights to collect taxes on crypto assets.

Coins that may be used as a means of payment or investment will be subject to the new rules, with possible exceptions for private blockchains or some utility tokens. VASPs will be required to report to national fiscal authorities. At the same time, the document being developed as a directive, not a law, so that EU member states are free to apply its provisions. If the proposal is accepted, some of the rules will come into force in 2025, the main part of the changes will come into force in 2026.

China

The Legislative Council of Hong Kong passed in the third reading amendments to the Law on Combating Money Laundering and Terrorist Financing, which introduce the concept of virtual assets and establish mandatory licensing of crypto assets service providers. The amendments will come into force in 2023.

The document is intended to provide regulation of activities related to virtual assets and introduce licensing rules for city’s VASPs. It sets out definitions relating to such assets, conditions for obtaining licenses, as well as penalties for rules violation. The punishment can be imposed in the form of a fine of up to $5 million, as well as imprisonment for up to 7 years.

The law prohibits to advertise services for non-licensed companies. There are penalties for violating this provision as well. We already wrote that the creation of a new legal framework for regulating the activities of crypto companies in Hong Kong may be due to the desire of China not to stand aside from the rapid growth of this industry. In China cryptocurrencies are prohibited since 2021, but Hong Kong is a special economic zone where separate rules can be set. After the Chinese ban on cryptocurrencies, most Chinese crypto companies have moved to Singapore or offshore jurisdictions. Perhaps China is counting on some of them to come back.

News from other countries:

  • In the UK, same as in the EU, a bill is also being prepared to limit the advertising of crypto companies registered outside the country. Supervision powers will be given to the UK Financial conduct Authority (FCA).
  • Former FTX CEO Sam Bankman-Fried turned down an offer from members of the U.S. House of Representatives to take part in hearings on the collapse of the stock exchange. We previously wrote that the Senate invited him to give his explanations of the FTX crash.
  • The Japan Financial Services Agency (FS) has recommended to impose ban on algorithmic stablecoins in the country. This recommendation came in response to the collapse of the Terra/Luna ecosystem . At the same time, the New York Times reports that the State’s prosecutors are investigating the possibility of manipulation of the Luna and Terra cryptocurrencies by FTX founder Sam Bankman-Fied.
  • The Financial Stability Board (FSB) has once again called for the development of a global standard for crypto regulation.

We continue to highlight the news of the world of crypto regulation worldwide. Stay tuned for the latest news!

The TokenScope Team

#TokenScope #CryptoNews #FTX #Terra #MiCA #EU #Hong Kong #crypto #taxation

More about TokenScope cryptocurrency risk assessment & investigation platform on:

TokenScope.com | Telegram | Twitter | Chrome Plug-in

You may also like:
Article image
Crypto regulation in the world: weekly digest #24
Article image
Crypto regulation in the world: weekly digest # 25
Article image
Crypto regulation in the world: The summary of the year
Article image
Crypto regulation in the world: weekly digest #26
Article image
Crypto regulation in the world: weekly digest #27