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Crypto regulation in the world: weekly digest #95

The USA

In the U.S. House of Representatives another act to regulate crypto was introduced this week. The Blockchain Integrity Act is a proposed legislation in the United States that seeks to impose a temporary two-year ban on cryptocurrency mixers. This bill aims to address concerns about the role of mixers in obscuring financial transactions. Under the proposed legislation, financial entities such as crypto exchanges, virtual asset service providers, and registered money service businesses would be prohibited from dealing with funds that have passed through a mixer. Violations of this ban could result in civil penalties of up to $100,000.

The act also involves a study by various government agencies like the Treasury Department, Securities and Exchange Commission (SEC), Commodity Futures Trade Commission (CFTC), and Department of Justice (DOJ) on the illicit uses of digital asset mixers.

Several bill proposals have been introduced by U.S. legislators to regulate cryptocurrencies during recent years. One of these proposals is the «Digital Asset Anti-Money Laundering Act», introduced by U.S. Senator Elizabeth Warren in December 2022. Additionally, the «Financial Innovation and Technology for the 21st Century Act» was launched in the House of Representatives, aiming to define when a digital asset is a security or a commodity and clarify the regulatory framework for the crypto market. Another significant proposal is the «Responsible Financial Innovation Act» put forward by U.S. Senators Cynthia Lummis and Kirsten Gillibrand, which focuses on enhanced regulation of digital assets, creating defined regulatory roles for the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

India

Binance and KuCoin, two major cryptocurrency exchanges, have made significant strides with the Indian Financial Intelligence Unit (FIU). Both exchanges have been approved by the FIU to operate in India after facing bans and penalties. KuCoin paid a fine of $41,000, while Binance's penalty is still being determined after a hearing with the FIU. The FIU lifted the ban on KuCoin in March after imposing a penalty of Rs 34.5 lakh. Binance, on the other hand, has completed initial registration with the FIU, with ongoing proceedings to decide its penalty.

These developments mark a shift in the credibility of the crypto industry in India, with the FIU emphasizing the importance of compliance with anti-money laundering laws for virtual digital asset service providers. The FIU's actions aim to safeguard the Indian economy and prevent financial crimes within the crypto sector.

The EU

The European Securities and Markets Authority (ESMA) has issued a call for evidence regarding the review of the UCITS Eligible Assets Directive. This call for evidence aims to gather feedback and insights on the eligibility of assets, including structured and leveraged loans, AT1 bonds, commodities, crypto assets, and emission allowances for investment by UCITS.

The review focuses on clarifying existing definitions, addressing divergent interpretations of eligible assets, and assessing the possibility of allowing UCITS exposures to such asset classes like crypto, commodities, delta-one instruments, and exchange-traded notes (ETN). Stakeholders have until Wednesday, 7 August 2024, to provide feedback on this call for evidence.

The purpose of a call for evidence is to engage stakeholders and gather feedback, empirical evidence, and expert knowledge on specific topics or issues. It serves as an information-seeking exercise to inform policy direction, decision-making, and reviews. Calls for evidence aim to ensure broad participation, especially from individuals, organizations, and stakeholders with direct experience or expertise related to the subject matter. Unlike consultations that typically occur after a draft policy is in place, calls for evidence are more open-ended and seek to collect a wide range of expert information to shape policies effectively.

News from other countries:

  • FTX, a bankrupt crypto exchange, has gathered assets valued at up to $16.3 billion, exceeding the estimated $11.2 billion debt owed to its creditors. The payouts are expected to commence after the proposed plan for repayment receives approval from the federal judge presiding over FTX's bankruptcy, John T. Dorsey. Any objections from creditors could potentially prolong the process.

We continue to highlight the news of the world of crypto regulation worldwide. Please stay with us!

The TokenScope Team
#TokenScope #CryptoNews #AML #KYT #ESMA #India #EU
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