Crypto regulation in the world: weekly digest #81


The United Arab Emirates is expected to be removed from the Financial Action Task Force's (FATF) «grey list» in February 2024. This decision comes after the UAE made significant progress in addressing strategic deficiencies related to money laundering and terrorist financing. The FATF's decision is based on the UAE's proactive initiatives, including strengthening its legal framework, increasing resources for its Finance Intelligence Unit, and enhancing investigations and prosecutions of money laundering. The UAE has also demonstrated effective implementation of targeted financial sanctions.

The UAE's efforts in regulating crypto, including the issuance of regulations for virtual assets and the licensing of virtual asset service providers, also have been recognized by the FATF. To comply with the FATF standards the country has implemented comprehensive regulations for crypto activities, facilitating the legalization of cryptocurrencies and virtual assets. These regulations cover various aspects of crypto guidelines in the Emirates, including licensing requirements and operational guidelines.

Central bank of the UAE, Dubai and county’s free economic zones have introduced a concrete licensing regime for entities planning to offer crypto-related services in the jurisdiction. This regime requires all such entities to seek the relevant licenses, thereby ensuring that crypto activities are conducted in compliance with regulatory requirements.

Regulatory authorities such as the Virtual Asset Regulatory Authority (VARA) and the Financial Services Regulatory Authority (FSRA) were established to oversee and regulate crypto activities. The FSRA was the first watchdog in the UAE to design a thorough normative document for crypto activities, demonstrating the country's commitment to effective regulation.

These measures reflect the UAE's proactive approach to regulating crypto in line with international standards, particularly the FATF's recommendations. The country's efforts to strengthen its regulatory framework and oversight mechanisms have contributed to its potential removal from the FATF grey list, signaling its commitment to combating money laundering and terrorist financing in the crypto sector.


Principality of Liechtenstein, a microstate located in the Alps between Switzerland and Austria, is planning to accept Bitcoin as a payment option for government services. The Prime Minister, Daniel Risch, announced this plan, stating that any crypto received as payment will likely be immediately exchanged for Swiss francs, the national currency of Liechtenstein. While a specific timeline for implementing this payment option was not provided, the country's openness to accepting Bitcoin for certain state services reflects its positive stance towards crypto adoption.

This move is in line with Liechtenstein's broader regulatory approach and its aim to attract crypto businesses, as evidenced by the adoption of the Token Act and the development of a comprehensive blockchain ecosystem in the country.

The country has become a crypto-friendly jurisdiction with a remarkable blockchain ecosystem that has developed in the country over the past few years. Liechtenstein is home to a vibrant crypto scene, with more than 28 companies registered for nearly 60 service provider roles, including 4 larger exchanges. The Liechtenstein Financial Market Authority has also opened itself to the token economy by creating a dedicated legislation to attract crypto business.

Liechtenstein is not a member of the European Union (EU) so it is not covered by MiCA regulation. However, it participates in the European Economic Area (EEA) through the European Free Trade Association (EFTA), having joined the EEA in 1995. This allows Liechtenstein to have close economic ties with the EU, despite not being an EU member state.

Hong Kong

Hong Kong has received its first application for a spot Bitcoin ETF, which has been submitted to the Securities and Futures Commission. The regulator has expressed readiness to accept applications for spot crypto ETFs, signaling a shift in the region's approach to Bitcoin regulation and investment. The potential listing of the ETF on the Hong Kong Stock Exchange could happen within a few months as the regulator aims to expedite the approval process. This initiative reflects the city's growing interest in embracing Bitcoin as a mainstream investment. The approval process in Hong Kong is expected to follow a trajectory similar to that of the U.S., where SEC recently greenlit multiple Bitcoin ETFs.

Additionally, Hong Kong authorities have launched an investigation into Worldcoin over data privacy concerns. The Office of the Privacy Commissioner for Personal Data (PCPD) executed warrants and entered six Worldcoin premises as part of the investigation. The focus of the probe is on the potential misuse of personal data, particularly the biometric data processed by Worldcoin in exchange for cryptocurrency tokens. The PCPD expressed concerns that Worldcoin may be in «contravention» of regulatory requirements related to data privacy. The commission emphasized that the information collected from users' irises was considered sensitive according to regulatory guidelines.

The investigation into Worldcoin by the Hong Kong authorities is not the first data privacy investigation against Worldcoin globally. Data protection regulators around the world, especialy in Europe, Brazil and Kenya are investigating Worldcoin over how it processes sensitive biometric data, indicating a global scrutiny of the project's data privacy practices.

Other news:

  • The UAE has successfully completed the first cross-border payment using its CBDC - Digital Dirham. This transaction of AED 50 million (~$13.6 million) was sent to China via the «mBridge» platform, a collaborative effort of the BIS Innovation Hub, four founding central banks, and over 25 observing members.

  • FTX has abandoned its efforts to restart the crypto exchange and is instead opting for a liquidation that should repay customers in full. The company's lawyers have stated that FTX does not plan to restart the platform, and after extensive efforts, no investor is ready to commit the needed capital to a restart of the offshore exchange.

The TokenScope Team
#TokenScope #CryptoNews #AML #CBDC #VARA #UAE #HongKong #Liechtenstein
More about TokenScope cryptocurrency risk assessment & investigation platform at: