Delphine F.’s Post

It’s Compliance Wednesday: Regulatory Updates from around the Globe! This week: - EU considers regulating DeFi protocols - South Korea tightens token listing rules - Rep. McHenry hopeful for digital asset legislation Would like to get more insights? Read our full summary here: https://lnkd.in/gwQithYu

...over to Europe.... 👉 Why industry warns MiCA delays put $1tn EU crypto market at risk The EU’s new Markets in Crypto-Assets (MiCA) regulation is set to go into effect on December 30, 2024, but delays in finalizing rules have left crypto firms with just weeks to get licensed by local regulators, potentially disrupting crypto trading across Europe. Industry associations have warned that unless the European Securities and Markets Authority (ESMA) extends the grace period for compliance, crypto firms may be forced to suspend services, risking significant harm to customers and the market's reputation. https://lnkd.in/eZVJSWNg 👉 Tether-backed Quantoz launches MiCA-compliant stablecoins USDQ, EURQ Quantoz Payments, a blockchain firm from the Netherlands, has launched two MiCA-compliant stablecoins, USDQ and EURQ, pegged to the U.S. dollar and the Euro, ahead of the European Union's Markets in Crypto-Assets (MiCA) regulation coming into full effect in December. These stablecoins, backed by fiat and highly liquid financial instruments, will be listed on Bitfinex and Kraken, with Tether, Kraken, and Fabric Ventures investing in Quantoz Payments to support the initiative. https://lnkd.in/eHDvE2h7 👉 SEC facing joint lawsuit from 18 US states over ‘unconstitutional persecution’ of crypto Eighteen U.S. state Attorneys General have filed a lawsuit against the Securities and Exchange Commission (SEC) and its leadership, accusing the agency of overstepping its constitutional authority in regulating the crypto industry. The lawsuit seeks to block what it calls an "unconstitutional persecution" of the sector, arguing that state-level efforts to foster crypto innovation and protect consumers should take precedence over federal enforcement actions by the SEC. https://lnkd.in/gdH5EZBG 👉 Bitcoin Blockchain Used To Secure Election Results In Georgia County Screven County, Georgia became the first U.S. county to use the Bitcoin blockchain to secure election results, partnering with Simple Proof to ensure the integrity of vote tallies. This initiative aims to prevent tampering with election data, offering a transparent and immutable way to verify results, with plans to expand the technology statewide in Georgia and beyond. https://lnkd.in/et8ZaykW 👉 Hong Kong warns against crypto firms misrepresenting as ‘banks’ Hong Kong's central bank, the Hong Kong Monetary Authority (HKMA), issued a warning on Nov. 15 against unlicensed crypto companies misrepresenting themselves as banks. The HKMA stated that using the term "bank" or referring to products like "bank cards" by non-licensed firms could violate the Banking Ordinance. Two overseas crypto firms were highlighted for such misrepresentations, misleading consumers into thinking they were licensed. The HKMA clarified that only authorized institutions, such as licensed banks, can offer banking services in Hong Kong, and unauthorized use of the term "bank" is illegal. https://lnkd.in/eGiZh-yJ

🇦🇪 Crypto Regulation News: Today, the FSRA released a consultation paper outlining a new regulatory framework specifically designed for fiat-referenced tokens (FRTs) issued within the ADGM. 1️⃣ Scope: The proposed framework focuses exclusively on FRTs. FRTs are defined as digital assets that (1) serve as a medium of exchange, (2) maintain a stable value by referencing a fixed amount of a single fiat currency, (3) allow holders to redeem the token for its fiat value from the issuer upon demand. This framework does not cover stablecoins pegged to multiple currencies or address (1) asset-referenced tokens or (2) commodity-backed tokens, as these are excluded due to the inherent value fluctuations of their underlying assets. The FSRA may consider regulations for these types of tokens in the future. FSRA has decided to prohibit algorithmic stablecoins within the ADGM. 2️⃣ Accepted FRTs: To ensure transparency and compliance, the FSRA proposes to publish a list of accepted FRTs. This list would include FRTs issued by licensed entities within the ADGM. Firms wishing to use FRTs not on this list would need to apply for their inclusion. 3️⃣ Issuance: The FSRA proposes to categorize the issuance of FRTs as a distinct regulated activity, separate from the issuance of Stored Value under the existing Financial Services and Markets Regulations 2015 (FSMR). 4️⃣ Requirements: ▶ Reserve Assets: FRT issuers must ensure reserve assets match the total value of FRTs in circulation, held in cash or high-quality liquid assets. ▶ Segregation: Reserve assets must be segregated and held by approved third-party custodians, with separate pools for each FRT. ▶ Granting Interest:  Unlike many jurisdictions (e.g., MiCAR, UK, or HK), issuers are allowed to distribute income from reserve assets, but FRTs must not be marketed as investment products; any income distributions must be transparently disclosed. ▶ Redemption: FRT holders can redeem their tokens at par value anytime, with issuers required to process requests within two business days. ▶ Capital Resources: Issuers must maintain minimum capital resources of $2 million or 12 months of audited expenditure to ensure financial stability. ▶ Business Restrictions: FRT issuers are restricted from other regulated activities and ownership stakes in other entities, except through related companies without issuer stakes. ▶ White Paper: Issuers must provide transparent and accessible disclosures in a white paper, published 20 business days before issuance and available as long as FRTs are in circulation. Merkle Science Mriganka Pattnaik Brigitte R. Ryan Berndt Jake Harwood Tom Luo AMBCS (羅雲驄) Ian Lee, CBC Susrita Sen Prachi Pandey Andrew Gross Dr. Justus D. Jussi Aittola Guru Prasant Rajam Ravi ANIKET SAMRAT MAZUMDAR

Paradigm maintains that the regulator’s present methodology misinterprets the mechanisms and implications of MEVs, which are a critical component of DeFi ecosystems Paradigm has expressed concern regarding the European Securities and Markets Authority’s (ESMA) proposed regulations under the Markets in Crypto Assets Regulation (MiCA), with a particular emphasis on the potential overreach of regulatory measures […] #Crypto #DeFiecosystems #ESMA

Welcome 2025 and welcome to MiCA!! The European Union's crypto regulatory framework is set to go live on Dec. 30, 2024. Markets in Crypto Assets (MiCA) regulations were passed by the EU in early 2023. Now, starting in just a few days, the regs will enter into an 18-month transition period until the full requirements hit across the EU in July 2026. While much of the recent news involves Tether.io, the truth is that MiCA will impact almost all digital asset players in the EU. The regulatory regime provides investor protection, AML requirements and registration provisions for crypto asset service providers (CASPs). MiCA is a major step forward in moving digital assets into the mainstream. As for USDT, it is interesting that it is not moving to come into compliance. It's largest competitor, Circle USDC, has already reached full compliance as an Electronic Money Token (EMT) under MiCA. As a significant EMT, MiCA would require USDT to hold a significant portion of its reserves in bank deposits which would require a change from current operations. Moreover, there would be a transparency and third-party audit requirement around reserves as well. The new year will bring a much more robust global regulatory environment around digital assets and, while irritating at times, it will benefit the industry greatly. The KPMG digital asset group has been working with CASPs and EMTs across the EU to come into MiCA compliance. Please reach out if your organization needs help. If you work with digital assets, you should be working with KPMG. https://lnkd.in/e2Hrvzcb

💫 The Bitcoin halving has sparked discussions around its potential influence on cryptocurrency regulations, especially in the U.S. 📋 Natalia Łątka, Public Policy Director at Merkle Science, was recently featured in a Cointelegraph article, highlighting the potential for "indirect effects on regulatory considerations" arising from the economic and market dynamics surrounding the halving, particularly regarding market stability and investor protection. 📄 🔖 The article explores the current state of crypto regulations in the U.S., underlining the ongoing lack of clarity and the challenges it presents for businesses. 📈 Read to know more: https://lnkd.in/eNrrrYMP Mriganka Pattnaik Nirmal AK Ian Lee, CBC Tom Luo AMBCS (羅雲驄) Adeline Wong Alice Romano Natalia Łątka

👉 Joe, the Party Pooper ? ..despite this setback, key US lawmaker expects crypto law by 2025 👉 ESMA 25th June 👉 US / UK sandbox collaboration ? 👉 BIS Project Rialto 👉 Coinbase SEC Accusation 👉 Crypto Party Pooper Biden vetoed SAB21 bill Biden on Friday decided to veto a Bill accepted by the US Senate (and Congress) that would have overturned a SEC bulletin that sets accounting standards for firms that would require institutions holding crypto assets to record them as liabilities on their balance sheets, therefore consuming significant levels of capital. This calls for a further increased effort to build constructive support with rule makers to achieve clear and a fair US regulatory crypto framework. https://lnkd.in/eaGEyvaR https://lnkd.in/ecqduAMG 👉U.S. Lawmaker at Center of Crypto Negotiation Predicts Digital Assets Law by Next Year So-called FIT21 crypto bill is now a "consensus product" of the House and can't be ignored, he said. and had more than a third of House Democrats showing up to vote yes, despite pushback from the White House. https://lnkd.in/eZ59E6xp 👉 Hester Pierce (SEC pro-crypto Commissioner) comment on Digital Securities Sandbox Joint Bank of England and FCA Consultation Paper, calling for US UK alliance The sandbox is designed to generate real-world insights about whether distributed ledger technology could streamline the issuance, trading, and settlement of securities without undermining investor protection, market integrity, or financial stability. https://lnkd.in/eiVz7SdH 👉ESMA : encourages stakeholders to provide feedback by 25th June on proposal linked to Market Abuse rules, notably Maximum Extractable Value (MEV). This is where a miner / validator can take advantage of its ability to arbitrarily reorder transactions to front-run a specific transaction (s) and therefore make a profit. Almost all regulated crypto businesses in the EU (exchanges, brokers, etc.) would need to detect and report instances of MEV through complex “suspicious transaction or order reports” (STORs, which in itself is already a 6 page long template....) https://lnkd.in/eJ87nq8b   👉BIS paper - Project Rialto: improving instant cross-border payments using wholesale CBDC settlement .. collaboration of the BIS Innovation Hub Eurosystem and Singapore Centres in partnership with several central banks. It explores a new automatic FX settlement layer solution using wCBDC as a safe settlement asset that could be deployed for interlinked instant payment systems or digital asset systems. https://lnkd.in/ebWZ37hs 👉Coinbase Accuses SEC of 'Purposeful Effort to Destroy' Crypto In a legal filing on Friday, America's leading crypto exchange accused the SEC of trying to snuff out crypto by refusing to make new rules. “This pattern of conduct is a purposeful effort to destroy an industry by demanding the impossible and prosecuting companies that fail to achieve it,” Coinbase’s filing stated. https://lnkd.in/eqavJuX2

The crypto lobby emerged victorious as the House passed the Financial Innovation Act of 2021 (FIT21), a landmark regulatory framework. However, Democrats criticized the move. The House of Representatives passed the bill, which was widely supported by the crypto lobby. The FIT21 act establishes guidelines for cryptocurrency companies, including registration, reporting, and record-keeping requirements. Despite the bipartisan support, some Democrats criticized the move, citing concerns over the potential impact on the traditional financial system and the need for further study. The crypto lobby, which includes companies and advocacy groups, has been working to build relationships with lawmakers and regulators to shape the regulatory landscape of the cryptocurrency industry. The passage of FIT21 marks a significant milestone for the crypto lobby, as it demonstrates the industry's growing influence in Washington. However, the bill still needs to be passed by the Senate and signed into law by the President before it becomes law. The crypto lobby's victory in getting FIT21 passed is a clear indication of the industry's growing political power. As the cryptocurrency market continues to grow, it's likely that the crypto lobby will continue to push for regulations that support the industry while also addressing concerns about consumer protection and financial stability. This is a significant development for the crypto industry, as it will help to bring clarity and certainty to the regulatory environment. It will also provide a level playing field for companies operating in the space, which will help to promote innovation and growth in the industry. This is a positive sign for the future of the crypto industry, as it shows that lawmakers are beginning to understand and recognize the potential benefits of cryptocurrencies and blockchain technology. It's also a clear indication that the crypto lobby is becoming a powerful force in Washington, and that it will continue to play a major role in shaping the regulatory landscape of the crypto industry in the years to come.

👇 👉 Stalled Crypto Bill FIT21 Could Become Law by Christmas, Says Rep. Tom Emmer FIT21 would establish a federal framework for the regulation of digital assets that would be jointly overseen by the CFTC and the SEC. The bill would allow issuers to self-certify assets as digital commodities (objected by President Joe Biden and SEC Chair Gary Gensler).   Though FIT21 passed a vote in the House this spring with key support from 71 Democrats, including Nancy Pelosi, the bill has since stalled in the Senate.   This stalled crypto regulatory bill in the US could become law by year end if parts of it are included in a government spending deal. https://lnkd.in/eUmQ_DQy 👉 SEC Chair Gensler Denies Knowledge of Anti-Crypto Operation Choke Point 2.0 During congressional appearance, SEC Chair Gary Gensler faced intense criticism from lawmakers, including some of his own commissioners, regarding his crypto regulatory policies. Multiple SEC commissioners emphasize a need for clearer regulation and acknowledging the agency's previous missteps in categorizing crypto assets, with one commissioner directly attributing the agency's crypto agenda to Gensler himself. https://lnkd.in/euxBYYyV 👉 Japan Plans to Review Its Crypto Rules ...over the coming months to assess the effectiveness of regulating digital assets under the payments act, which could lead to reclassifying crypto as a financial instrument. This review may also facilitate the introduction of domestic funds for investing in digital assets and explore the possibility of lowering taxes on cryptocurrencies. https://lnkd.in/epY5a5X7 👉 Taiwan opens digital asset ETF market to professional investors Taiwan’s Financial Supervisory Commission (FSC) has authorized professional investors to access foreign digital asset ETFs as part of an effort to enhance investment options and competitiveness in the financial market. Taiwan remains cautious, maintaining strict monitoring and risk management practices, especially regarding fraud and volatility in the crypto space. https://lnkd.in/eTtmG3cd 👉 Mark Cuban Isn’t Playing: He Really Wants to Chair SEC in Harris Admin ..citing his support for the crypto industry and criticism of Gensler's enforcement actions. Cuban has been in contact with Harris's campaign regarding crypto policies, indicating a potential shift towards a more favorable regulatory environment. https://lnkd.in/e6qxWpkG   👉 Binance continues to serve Russian users despite 2023 exit Despite announcing a full exit from Russia in 2023, Binance continues to serve a limited number of existing Russian users to ensure their digital assets remain secure. https://lnkd.in/e9TXyyUW 👉 Ohio Senator Introduces Bill to Allow Bitcoin, Crypto Payments for State Taxes The proposed legislation requires all political subdivisions in Ohio to accept Bitcoin and other cryptocurrencies for payments. Other states which accept crypto include Florida, Utah, Colorado.. https://lnkd.in/e6BxUbY2

Short headline to summarise what the excellent Sophie Sheldon posts below - if you are doing MiCA, you have to do DORA as well. https://lnkd.in/ecpiz_3N Art 2(1)(f): "this Regulation applies to the following entities: [...] crypto-asset service providers as authorised under [MiCA] and issuers of asset-referenced tokens"