Global encryption supervision presses the broad push button

Cryptocurrency benefits from its anonymity, decentralization, and freedom from geographical restrictions. Credit risk, liquidity risk, security risk, financial fraud, assisted crime, money laundering and tax evasion and other criminal risks.

In response to the risks posed by cryptocurrencies, various countries have implemented regulatory policies. For example, the classification of cryptocurrencies focuses on the supervision of security tokens; cryptocurrency providers such as exchanges are used as the “grabbing hands” of cryptocurrency supervision; and anonymous transactions are cracked in order to combat criminal acts such as money laundering and terrorist financing. In general, various countries and regions are actively exploring how to regulate cryptocurrencies but their attitudes are different. Entering September, regulatory trends in many countries and regions have also been adjusted.

President of Mexico: Mexico will not use Bitcoin as legal tender

According to news on October 15th, at a press conference held earlier today, Mexican President Andres Manuel Lopez Obrador ruled out the possibility of using Bitcoin as legal tender in the country. In answering reporters’ questions about Bitcoin, he said: “In this regard, we will not change. We believe that we must maintain orthodoxy in financial management instead of trying to innovate too much.” Lopez Obrador said that the government will focus on developing mechanisms to prevent tax evasion, rather than changing the national financial system. It is friendly to Bitcoin: “(We want to make sure) there are no privileges, everyone has to pay taxes, that’s enough.”

U.S.: Weigh the broad push for cryptocurrency regulation

According to sources familiar with the matter on October 9, the Biden administration is weighing an executive order on cryptocurrencies as part of developing a government-wide approach for this white-hot asset class. The proposed directive will require federal agencies to study encryption related fields and make recommendations-involving financial regulation, economic innovation, and national security. People familiar with the matter said that the plan will also aim to coordinate the work of the entire administrative department and agencies in terms of digital currency. The plan will prompt departments that are not paying enough attention to cryptocurrency to focus on it.

The White House declined to comment on the encryption plan. The draft directive is part of the White House’s efforts to develop a comprehensive strategy for digital tokens, and as digital tokens become popular among ordinary Americans, this has become a growing concern for regulators. When the financial regulator appointed by Biden seeks to strengthen the supervision of asset classes, it has taken an increasingly tough attitude towards the emerging crypto market. As the market swelled to more than US$2 trillion, regulators expressed concern about the lack of investor protection and possible risks to financial stability. The entire government’s national security agencies are also working hard to deal with cases where digital currencies play a role in ransomware attacks.

Kazakhstan: Start to clean up and rectify digital mining companies

According to news on October 8, Kazakhstan’s Deputy Minister of Energy Kerat Rashimov recently announced that the country will begin to clean up illegal cryptocurrency “mining” companies and plans to restrict activities in this area. Rahimov said, “With the arrival of “mining companies”, the country’s power system has become very bad. This year’s consumption has increased by more than 7%. If companies want to open a virtual currency processing center in Kazakhstan, they must first register. Only after obtaining the status of a legal entity can a permit for installation of the facility be obtained.

However, Rashimov also clarified that virtual currency mining companies officially registered in Kazakhstan will not be discriminated against and will continue to operate in accordance with the contract. In June 2021, the President of Kazakhstan signed a decree stipulating that the country’s digital mining activities will be charged. The effective date of this regulation is January 1, 2022.

European Central Bank Management Committee: The EU needs to quickly adopt the “cryptocurrency market supervision”

On October 7th, the European Central Bank Management Committee Villeroy urged the European Union to quickly adopt the “Encrypted Currency Market Regulation” (MICA). Supervision should also be strengthened, because decentralized finance is making major developments. “Innovation is of course positive, but if it is not regulated, innovation may reduce financial stability. At the same time, there are problems of market concentration and customer protection. Regulators should consider combining activities and entities for large technology companies The operation of the financial services industry. It may be possible to organize a specific legal entity within a large technology company to subject it to financial supervision.

Central Bank of Uruguay: Develop a “work plan” for digital asset supervision

On October 5th, the Central Bank of Uruguay (BCU) has developed a “work plan” to lay the foundation for the supervision of digital assets and companies that provide these services. The entity confirmed in a statement on Friday that the BCU plans to complete a proposal before the end of this year to amend current legal regulations involving digital assets and establish a clear framework to regulate these activities. The BCU will also promote “a dialogue with industry participants and will continue its relationship with other regulatory agencies and international organizations to deepen its understanding of the supervision and supervision experience of these activities”.

BCU stated that digital assets are not legal tender like the Uruguayan peso, have no issuance, and do not have any central bank support. At present, the BCU added that the issuance and trading of digital assets are not within the scope of the central bank’s activities and therefore are not subject to specific supervision.

French regulator: warns investors of unauthorized encryption services

On October 1, news, the French stock market regulator Autorité des Marchés Financiers (AMF) continued to monitor the cryptocurrency market and warned investors about unauthorized crypto services. According to regulators, there are listed entities that have been providing crypto investment products without authorization to provide such services. To protect investors from potential fraudulent investments, AMF and the French Prudential Regulation and Resolution Agency (ACPR) regularly update the blacklist of unauthorized investment providers.

Nonetheless, these lists are “incomplete” because “new unauthorized entities often appear”. The authorities strongly recommend that investors follow the list of authorized investment providers registered online using financial service providers and the authorized list of financial investment advisors or crowdfunding categories.

Swiss Financial Market Supervisory Authority: Approves the first crypto fund only for qualified investors

The Swiss Financial Market Supervisory Authority (FINMA) officially announced on September 29 that it has approved the Crypto Market Index Fund to become “the first crypto fund established under Swiss law.” The fund was initiated by the Swiss asset management company Crypto Finance, managed by the investment management company PvB Pernet von Ballmoos AG, and managed by the regulated institution SEBA Bank AG. FINMA pointed out that the newly approved funds are limited to qualified investors, mainly investing in cryptocurrencies or digital assets “based on blockchain or distributed ledger technology.”

Canadian regulator warns of misleading “gambling-style” cryptocurrency advertisements

On September 27th, the Canadian financial regulator, the Canadian Securities Regulatory Agency (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC) have issued a joint guidance letter warning that cryptocurrency trading platforms may be The importance of requirements related to media use. In the published document, the regulator outlines three main areas of concern for those cryptocurrency platforms that have registered (or filed an application) as traders under securities legislation or are considering doing so in the future: “May be considered false or misleading.” “Compliance and regulatory challenges” for advertising and marketing materials, the use of gambling-style competitions, promotions or programs, and the use of social media platforms for advertising.

It is worth noting that the document pointed out that although these requirements mostly involve the trading of digital assets that are considered securities, they may also apply to “encrypted assets that are commodities, because the user’s contractual rights related to encrypted assets may themselves constitute securities. And/or derivatives”.

Indonesian Minister of Trade: Will not ban cryptocurrency but will tighten supervision

On September 26, Indonesian Trade Minister Muhammad Luthfi stated that Indonesia will not completely ban cryptocurrencies, but will tighten supervision. The country is studying how to reduce the possibility of cryptocurrency being used for illegal financial activities. It is reported that cryptocurrency trading in Indonesia has developed rapidly in the past year and a half. In the first five months of 2021, the trading volume of 13 domestic exchanges authorized by the Futures Exchange Supervision Committee has increased by 40%.

China: rectify mining and virtual currency trading hype

On the evening of September 24, the National Development and Reform Commission, the Central Bank, etc. issued a series of notices mentioning rectification of mining and virtual currency trading hype. Among them, the National Development and Reform Commission and other departments issued a notice on the rectification of virtual currency “mining” activities, mentioning strengthening the dual control of energy consumption for new virtual currency “mining” projects. In addition, on the evening of the 24th, ten departments including the People’s Bank of China, the Central Cyberspace Administration of China, the Supreme People’s Court, the Supreme People’s Procuratorate, the Ministry of Industry and Information Technology, the Ministry of Public Security, the State Administration for Market Regulation, the China Banking Regulatory Commission, the China Securities Regulatory Commission, and the State Administration of Foreign Exchange issued a Notice on preventing and disposing of the risk of speculation in virtual currency transactions.

UAE Regulator: Approves Cryptocurrency Trading in Dubai Free Zone

On September 22, the Dubai World Trade Center Authority (DWTCA) announced that it has signed an agreement with the UAE Securities and Commodities Authority (SCA) to support the supervision and trading of cryptocurrency assets in the DWTCA Free Zone. This new initiative establishes a framework that enables DWTCA to issue the necessary approvals and permits for financial activities related to cryptocurrencies.

As part of the agreement, SCA will also oversee major cryptocurrency-related activities such as issuance, listing, trading and licensing processes. According to the announcement, SCA Acting Chief Executive Officer Maryam Al Suwaidi, DWTCA Director General Helal Saeed Al Marri, and an executive from the Dubai Tourism and Commercial Marketing Department signed the agreement.

South Korean financial authority: announced the list of 28 cryptocurrency exchanges that meet regulatory requirements

On September 19, the South Korean financial authority announced a list of 28 cryptocurrency exchanges that meet regulatory requirements. The revised “Specific Financial Transaction Information Reporting and Use Law” requires crypto exchanges to obtain information security management system (ISMS) certification before September 24 and report to the Financial Intelligence Unit (FIU) under the Financial Services Commission (FSC). Crypto exchanges that fail to do this must cease operations before September 24. The 28 exchanges that can continue to operate after September 24 include opax, Upbit, Korbit, Coinone, Bithumb, Hanbitco, Casherest, Tennten, Dove Wallet, Flybit, Gdak, Aprobit, Huobi, Coin&coin, Probit, Borabit, Coredax , Okbit, etc.

However, to provide Korean won fiat currency trading services, cryptocurrency exchanges must also cooperate with banks to provide customers with real-name verified deposit and withdrawal accounts. Out of concerns about money laundering risks, most banks are less willing to cooperate with crypto exchanges. So far, only four major crypto exchanges-Upbit, Bithumb, Coinone, and Korbit have achieved this, which means that the other 24 exchanges can only provide currency trading.

The Russian Duma: Hope to regulate crypto mining as a business

On September 9th, Anatoly Aksakov, Chairman of the Financial Market Committee of the Russian State Duma, said that Russian legislators are now considering recognizing crypto mining as a form of entrepreneurship in accordance with local commercial laws. Since this [cryptocurrency mining] is a kind of entrepreneurial activity, it is obviously necessary to include it in the national registry, supervise it as an entrepreneurial activity in accordance with appropriate regulations, and collect related taxes. The government is actively carrying out a number of legal measures related to the crypto industry, and it is expected that the bills on crypto taxation, mining and digital currency issuance will be promoted in the near future.

Aksakov also emphasized the need to provide more regulatory clarity for digital currency, and pointed out that there is still a need to discuss what digital currency is. Although it is called currency, it is more like a financial instrument or a financial asset that can be invested. Rather than a means of payment.

India: plans to regulate cryptocurrencies as commodities

On September 4, the “Economic Times” quoted three people familiar with the matter as saying, “The government plans to define cryptocurrencies in the draft of the new bill, and the bill also proposes to classify virtual currencies based on their use cases.” A report said, India It is planned to regulate cryptocurrency as a commodity. The report stated that “cryptocurrency will be treated as an asset/commodity used for all purposes, including taxation and depending on the use case-payment, investment or utility.”

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