Veriscope Weekly Regulatory Recap (June 20 — June 25)
The global crypto market is in a slightly better position than the week before. Yet, the cloud of uncertainty looms large over the broader market.
Welcome to another edition of Veriscope’s Weekly Regulatory Recap. The global crypto market is in a slightly better position than the week before. Yet, the cloud of uncertainty looms large over the broader market. Authorities continue to stress the need for regulatory measures to put an end to the wild-west days of the crypto industry. So, without further ado, let’s dive straight into it.
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Swiss Financial Authority CEO Demands Strong Crypto Regulations to Prevent Market Abuse
Drawing parallels to the US stock market of the 1920s, Urban Angehrn, Chief Executive Officer of the Financial Market Supervisory Authority, Switzerland’s financial regulator, demanded strong regulatory measures for the digital assets market to prevent abusive market practices.
While speaking during a conference in Zurich, Angehrn said, “It would seem to me that a lot of trading in digital assets looks like the U.S. stock market in 1928, where all kinds of abuse, pump, and dump, are now, in fact, frequently common.”
He also asked his colleagues to brainstorm ways to simplify the technology, find ways to make massive data processing easier to handle crypto transactions, and create frameworks to protect investors against market abuse.
A Leading Nigerian Bank MD Calls Country’s Auditors to Monitor & Flag Crypto Transactions for any Terrorism Financing-related Incidents
Math Ude, Managing Director of one of the leading Nigerian wholesale and investment banks, Nova Merchant Bank Limited, recently called on auditors to focus on digital asset-related transactions in the country.
Attending a quarterly meeting of the Association of Chief Audit Executive of Banks in Lagos, Ude said that illicit actors involved in terrorism might turn to digital assets for money laundering & terrorism financing.
Thus, he said that auditors must watch out for a systematic framework that enables them to collect sender & beneficiary information, such as names & account details of individuals & organizations behind the transactions, and flag high-risk ones to the authorities. And doing so will prevent the misuse of digital assets in illicit activities in the country.
ECB President Pushes for Extending Crypto Regulations to Staking & Digital Assets Lending
While giving testimony to the European Parliament, the Head of the European Central Bank, Christine Lagarde, proposed to EU lawmakers to extend the current crypto regulatory framework to staking and crypto lending. She termed her proposal, MiCA 2.0.
Lagarde’s statement comes amid increasing demand from users to regulate the crypto lending space as some of the most popular virtual asset lending companies recently paused or limited withdrawals.
Leading crypto lending platforms like Celsius and Babel Finance recently paused withdrawals amid growing market uncertainty. Whereas, BlockFi and Voyager reduced the withdrawal limit. The fiasco attracted the attention of global authorities, including the SEC.
Panamanian President Sends Back Crypto Bill for not Including AML Provisions
Laurentino Cortizo, President of Panama, recently rejected to sign the crypto bill, legally known as Bill No 697 in the country, over AML-related concerns.
Although President Cortizo had called the bill “innovative” in the past, he is concerned about the lack of anti-money laundering provisions to prevent the use of crypto-assets in illicit activities.
Panama is known worldwide for its tax haven status, denting its global reputation, especially among financial regulators, such as the Financial Action Task Force.
As of now, Panama is placed in the “Jurisdictions Under Increased Monitoring” list. Thus, the President wants to strengthen the country’s AML framework to improve its reputation.
Click here to read more on the Panamanian President’s stance on the country’s crypto bill.
The current crypto market downturn is wreaking havoc on some of the largest crypto companies in the world, with crypto lending and exchanges companies facing the most heat. Such a brutal market downturn has made one thing clear to the global financial regulators: this industry cannot continue without regulatory oversight. Thus, this week, too, authorities continue to vouch for bringing crypto assets within the regulatory net.
The day when countries will co-ordinate and develop a global framework to regulate digital assets is not far. Hence, Virtual Asset Service Providers (VASPs) must start complying with current national and international laws around digital assets. Speaking of global crypto regulations, the most important piece of law today is the FATF’s Travel Rule. And to comply with the Travel Rule, you will need a Travel Rule Solution Provider (TRSP).