TronWeekly

Crypto World News

You are here: Home / Archives for Crypto Regulations

Crypto Regulations

Cryptocurrency Accounts Linked To North Korea Hacks Set Be Seized By U.S Government

by

The US government is boosting its cybersecurity efforts by targeting 280 cryptocurrency accounts linked to North Korea hackers. According to the Reuters report, the U.S. authorities are making efforts to seize crypto accounts believed to have been used by North Korean hackers to steal millions of dollars worth of cryptocurrencies from two virtual exchanges.

This action comes after the hackers have been identified to have been involved in a number of crypto-related cyber crimes in the world. U.S. authorities also believe that hackers use stolen currencies to fund different military operations, such as the missile program.

The U.S Department of Justice filed for a civil forfeiture complaint in a move touted to give the authorities total authority to seize all of the 280 accounts. It is worth noting the North Korea hackers laundered money through Chinese traders who used the accounts to launder over $100 million on their behalf.

North Korea using Hackers to overcome harsh economic effects of sanctions

Following the different sanctions imposed on North Korea since 2006, the country has had to face tough economic times. It is precisely this situation that the U.S. authorities believe prompts North Korea to incorporate state-sponsored hackers to hack and steal funds intended to fund different programs in the country.

The UN Security Council first imposed sanctions on the country, following reports that the government was working on a ballistic missile program. It is also widely believed that the majority of stolen cryptocurrencies are averted towards supporting this program.

Brian Rabbit Who serves as the assistant attorney general for the justice department in a statement insists that the recent expose shows just how much North Korea hackers were embedded with the Chinese gang to scam funds fraudulently.

Hackers have amassed a whopping $2 billion from targeted cyber crimes

According to reports, the North Korea hackers have managed to scam over $2 billion worth of cryptocurrency from their hacks.  The hackers mostly target banks and crypto-exchange platforms. Meanwhile, the infamous Lazarus group has been credited to a number of cyber attacks on financial firms worldwide.

 

.

 

Crypto Firm OSL Receives In-Principle License Approval From Hong Kong’s watchdogs

by

The Asian-based cryptocurrency firm, OSL Digital Securities, won the Hong Kong market regulator’s in-principle decision to issue an exchange platform license to operate its crypto-related business in the region.

With this crucial development, the Fidelity-backed BC group is now one step closer to operating as a regulated provider for brokerage and automated trading services, including security tokens. After the latest move, OSL asserted that it would continue to work under the SFC’s regime in a bid to secure a full-provider license in Hong Kong.

Commenting on the authorization, BC Group CEO Hugh Madden stated,

“Securing approval-in-principle for a virtual asset trading platform license in Hong Kong, inclusive of security tokens, underscores our commitment to comprehensively addressing the demands of institutional investors”

In response to growing anti-money-laundering [AML] and know-your-customer [KYC] concerns, Hong Kong’s Securities and Futures Commission expanded its regulatory oversight for cryptocurrency exchange treating them as traditional securities brokerages and allowed these platforms to opt into regulation under its new rules.

Essentially, the “in-principle” decision is the first step of the full authorization process in which the applicant platform is required to satisfy one or more requirements set by the Securities and Futures Commission [SFC] in order to obtain a license.

SFC had unveiled its new set of rules for the cryptocurrency exchanges in November last year. It details how the Platforms must address custody and compliance, in particular with regard to the KYC and AML rules. The published documents also state that exchanges can only offer products to “professional investors.” In addition, they will also be required to file a monthly report to the Commission.

The 61-paged document stated,

“The adoption of the new regulatory framework will enable the SFC to formulate its future
regulatory strategy for virtual assets through close supervisory interactions with an
evolving and dynamic industry.”

The exchanges will need the regulator’s approval for offering new products. Besides, SFC does not consider direct peer-to-peer platforms for licensing. Interestingly, OSL was the first and the only platform to apply for the license.

U.K. Financial Watchdog Registers Gemini Crypto Exchange Firm

by

The U.K. financial watchdog has given the green light to U.S. crypto exchange firm Gemini to run its operations in the United Kingdom. The cryptocurrency exchange founded by the Winklevoss twins has registered its U.K. branch with the Financial Conduct Authority.

The Financial Watchdog rolled out mandatory risk assessments for exchanges in January this year to determine their compliance with the Fifth AML Directive (AMLD5) and the Counter-Terrorism Financing (CTF) Regulations of the European Union. The new regulations require all cryptocurrency firms operating in the United Kingdom to report their operations to the FCA. Archax crypto exchange was the first exchange firm to be approved by the authority under the new laws.

All crypto firms are required to comply with new requirements

According to the Financial Conduct Authority, cryptocurrency entities operating in the U.K. have until January 10, 2021, to comply with the new requirements. Gemini’s U.K. branch, Gemini Europe Limited, registered with the financial watchdog early this week. However, the authority has not revealed the exact date when the firm’s new registration will take effect.

Although Kraken claims it is the UK’s first licensed crypto exchange, only a United Kingdom Financial Conduct Authority (FCA) Multilateral Trading Facility (MTF) license was given to its subsidiary Crypto Facilities on 6 July. Moreover, according to FCA.s register, both Archax crypto exchange and Gemini registered their operations in the U.K. this week, and are the only two firms on the entry. However, the Archax’s registration entered into force on August 18, unlike Gemini, which is not specified.

Currently, the Gemini crypto exchange is adopting measures to fortify its oversight tools as it sails through the FCA’s procedures. According to a recent report by Bloomberg, the American exchange had chartered Ventus Systems Inc. to supply the firm with anti-market manipulation tools.

European nations implementing AMLD5 and FATF recommendations

European authorities are currently enforcing the AMLD5 and FATF recommendations.  Ireland is presently structuring its cryptocurrency regulations to combat money laundering and financing of terrorist activities. However, the new cryptocurrency regulations could pose more challenges to the Irish cryptocurrency sector. Notably, the cost of compliance might push some startups out of business.

Proposed Pan-Europe Crypto and Digital Finance Regulation Framework to Boost Crypto Assets Growth

by

According to a recent report by the financial news agency IFC Review, the European Commission, the law-making arm of the European Union, is concluding the first-ever crypto and digital finance regulatory structure proposed by Europe. The pan-European structure is intended to strengthen the development of crypto assets in the long run.

If the regulation is successfully passed into law and implemented, its acceptance would give the best possible legal atmosphere for crypto-related entities to thrive and contribute to the European economy.

Bitcoin and stablecoins recognized as financial instruments

Back in 2019, the Commission spent most of the year deliberating with industry experts and specifying crypto terms. Consultations included the acknowledgement of digital assets such as Bitcoin and stablecoins as financing tools and the development of a regulatory structure for blockchain-based entities.

According to the chairman of the European Blocktech Federation, the recognition of cryptocurrency assets as financial tools established them among the broad group of European and national legitimate tools that oversees Europe’s financial market. Moreover, he termed the upcoming crypto and digital finance laws as ‘historic,’ in regards to the immense potential it creates for businesses and individuals to develop digital finance solutions.

The proposal also elaborated a project to develop a single market for digital currencies, to facilitate cryptocurrency trading across all European nations. By comparison, the plan is the same as the launch of the Euro back in 1999, a single currency that united all members of the European Union back then.

Crypto and digital finance regulatory structure will boost European growth

The new crypto and digital finance regulations follow European Commission’s vice president Valdis Dombrovskis sentiment back in June; regulatory uncertainty surrounding digital assets hinder growth and development in the Eurozone. According to the report, the proposed crypto laws are likely to be enacted in Q3 2020. However, the report notes that interruptions can be expected due to the novel coronavirus disaster. 

Indian Prime Minister Endorses Blockchain Technology Publicly as an Investment Opportunity

by

The Prime Minister of India, Narendra Modi, has backed blockchain technology as an ‘opportunity in frontier technology’ reviving the desires of the crypto community for the country to be warming up for virtual assets. Like many other countries worldwide, India has seen a surge in the use of crypto assets. However, the conditions are not favorable for cryptocurrencies to thrive; the government is not supportive of crypto.

The Indian Prime Minister ‘s latest sentiments while speaking at the India Idea Summit, which was hosted by the U.S Indian business council on July 24, touched on five different technologies, including blockchain technology. The PM classified Big Data Analytics, 5 G, Quantum Computing, Internet of Things ( IoT), and Blockchain technology as frontier technologies.

Indian Prime Minister urges investors to take advantage of COVID-19

Outwardly, the Indian PM has smudged on an investment opportunity for emerging technologies and is encouraging entrepreneurs, especially from the US, to invest in them. The COVID-19 crisis has badly impacted the economy of India. In particular, the Indian Prime Minister aims to rejuvenate the economy through foreign investment collaborations from developed and promising countries, notably the United States.

The PM urged investors to take advantage of coronavirus damage in India and deploy tech-related investments that will benefit the people of India and the investors. Moreover, the Indian Prime Minister implied a long-term partnership that could flourish even post COVID-19.He noted that:

“American investors often lookout for the perfect timing to enter a sector or a country. To them, I would like to say — there has never been a better time to invest in India.”

Regulatory uncertainty still looms in the Indian cryptocurrency industry

While the future of cryptocurrencies is indistinct, the country is very supportive when it comes to blockchain technology. Skepticism about crypto is very high in India.   Even after the Reserve Bank of India removed the crypto banking ban, some Indian banks are still reluctant to offer their services to crypto-related entities.

In spite of that, the sentiments of the Indian Prime Minister have instilled faith in the cryptocurrencies community, obtaining full green light to operate in the country.

Russian Federation Drops Plot to Outlaw Bitcoin Transactions

by

The Digital Financial Assets Bill (DFA), which is scheduled to be read for the second time in the Russian Parliament today, has withdrawn mentions to the administrative and unlawful obligation for bitcoin transactions. The third and ultimate reading will institute the draft as a law. According to the head of parliament’s financial markets committee, Anatoly Aksakov, while speaking to a domestic news outlet, Ria Novosti: “There will be no liability in this bill.” 

Administrative and criminal liabilities withdrawn from DFA bill

Speaking to the media agency, Aksakov noted that the decriminalization of bitcoin investment had been set aside until further notice. He also said: “They have removed everything; there is only a link that the regulation of digital currency will be determined by another law.” The previous edition of the DFA bill intended to introduce financial penalties of up to $7,000 or face seven years in prison.

In addition, the bill suggested penalizing firms that issue or deal with cryptocurrencies without the authorization of the Russian central bank. The proposed financial penalties amounted to approximately $28,000 for violations of the Bitcoin Transactions Act if it is used as a means of payment for goods and services. Initially, the original bill proposed that firms would have to pay up to one million rubles ($13,900), while individuals would be fined at least 200,000 rubles ($2,800) for transactions in virtual assets to pay for goods and services.

Lawmakers planning “special law” to outlaw bitcoin transactions

Moving forward, Aksakov noted that the current draft bill, in its amended structure, now only concerns the challenges surrounding the definition of digital financial assets; and spells the standards for dealing with blockchain tech, among other issues. Besides, Aksakov, who is in charge of sponsoring the bill, anticipates the proposed law to be enacted on January 1, next year after adopting the second and third readings during the State Duma spring section that ends on July 23.

Legislators in Russia are also working on another “special law” on cryptocurrency policing, which may introduce strict penalties for dealing with bitcoin transactions. According to Aksakov, the law could be adopted during the autumn session, which ends in December. Digital currencies in the Russian Federation remain vague. The legality of ICOs, Smart Contracts and Crypto Mining lacks a clear definition despite the high number of proposals submitted to the legislature for this intention.

A New Legislation to Regulate Digital Currency Payment Suggested by G20

by

A new digital currency payment bill proposed by the G20 is set to propel the adoption of cryptocurrencies to levels never seen before. The G20 countries announced on 11 July that they might introduce a regulatory framework to payment of digital currencies and allow “digital currency” instead of just cash payment methods.

The Group of Twenty or G20  is an international forum for governments and central bank governors from 19 countries and the European Union. Members of the G20 are Argentina, Australia , Brazil , Canada, China , Germany, India , Indonesia, Italy , Japan, Mexico , Russia, Saudi Arabia, South Africa, Turkey, United Kingdom , United States of America and the European Union.

G20 ‘s attention to cryptocurrencies is a big deal for the entire industry. The successful approval of the proposed new bill is lucid: it will stimulate the mass adoption of digital currencies. This massive adoption is due to the fact that G20 nations account for 90 % of the world’s gross revenues.

In addition, more than 80% of all trade activities worldwide take place in these countries. And also the G20 countries account for more than 50% of the world’s total land area and two-thirds of the world’s total population.

G20 to enact FATF digital currency payments guidelines

The Financial Action Task Force ( FATF) is a body founded in 1989 to battle money laundering. The Authority held its annual Private Sector Consultative Forum in Austria this month, and digital currency payments were among the topics discussed.

The FATF reiterated that the guidelines and recommendations for implementing digital currency payments are still in place. Subsequently, the authority advanced to show its support for virtual assets, stating that crypto assets could have a significant impact on the world economy.

The G20 nations have also accepted  to support the guidelines recommended by the FATF by enforcing them. In particular, Russia, one of the G20 nations, has agreed to establish a regulatory structure for crypto assets in the country. The enactment of a clear structure in line with the FATF Directives was planned for July last year, but Russia is set to implement it this month.

Bottom line

In addition, another G20 member in Japan is actively working to establish a policing guideline for crypto assets in the country. South Korea is also reportedly prioritizing a clear regulatory structure and is working towards the realization of a consistent structure. On the other hand, South Africa and China could potentially see a change in cryptocurrency policing in their respective countries this year.

Wirecard to Resumes Operations After FCA Lifts Restrictions

by

The U.K. Financial Conduct Authority ( FCA) announced on 29 June that it would lift the restrictions imposed on the German payment firm Wirecard AG, allowing Wirecard to resume operations. The watchdog noted that it had provided a written agreement to Wirecard ‘s subsidiary, Wirecard Card Solutions, to resume its e-money and payment services, although some limitations remain.

The UK financial watchdog ordered the e-payment firm to halt operations on 26 June, following the submission by its parent company of an insolvency application in Germany. The move to lift the ban allows the users of the firm to access the financial services they have been locked out.

Wirecard’s clients can now access financial services

The limitations imposed on the fintech firm include not being able to dispose of any assets or money, not to run any regulated activity, and put a statement on its official website notifying users that it is no longer authorized to carry out regulated activities. Nevertheless, clients can now use their debit cards freely without interruptions. A statement by FCA reads:

“We know that some people may have faced difficulties over the weekend and we worked with DWP, HMT and the Home Office in order to help anyone suffering financial distress. Anyone who is still in difficulties should see our website for more details.” 

Insolvency proceedings

Despite the lifting of the restrictions by the FCA, experts suggest that the issue could have permanent damage to people’s trust in fintech firms. In particular, firms such as Curve and Anna rely on their e-money licenses to manage payments but do not hold banking licenses to hold client funds. The funds are instead ring-fenced with a third party financial institution.

Germany-based Wirecard has stated that it will continue to operate despite insolvency filings last week. The company also stated that it is exploring whether its subsidiary firms will also be required to apply for insolvency. In addition, the American subsidiary of the company which it acquired from Citigroup in 2016; stated on 29 June that it was looking for a buyer.

Indian Crypto Firms Optimistic Despite Crypto Blanket Ban Rumors

by

Indian crypto firms remain optimistic for the bright future, despite rumors of an imminent ban on cryptocurrencies from India. Last week, the Indian Ministry of Finance submitted a proposal to permanently ban digital currencies from the country.

The Indian cryptocurrency industry has begun to experience growth since the Reserve Bank of India ( RBI) has been forced to lift the banking ban by the apex court, giving the government embattled industry a new lifeline. Even so, after three months of a smooth ride, the industry is once again facing the threat of permanent dismantlement.

Indian crypto firms under siege

If the new bill awaiting approval by ministers passes into law, it will end the booming cryptocurrency industry. Notably, the new law will affect crypto-related firms and individuals who own and trade digital currencies. 

Regardless, some Indian crypto firms are still optimistic and claim there is no need to panic. The first cryptocurrency firm that comes to mind when talking about the Indian crypto sector is WazirX. WazirX has been making headlines in the media for record-breaking trading volumes, and the recent high-profile acquisition by exchange giants Binance.

Optimism galore

According to the CEO and founder of WazirX, Nischal Shetty, the news of a blanket ban are merely rumors. He says:

“While we do not question the credibility of the source, we do know from our own links within the government that India’s crypto sector, in fact, is viewed in a positive light. There is no ban being considered, as far as we know.”

Moreover, the founder and CEO of CoinDCX, Sumit Gupta, commented on the rumors. The crypto firm recently managed to raise $2.5 million in extra funds to venture into several crypto-related investments in India.

Furthermore, Gupta launched CoinDCX’s online crypto and blockchain learning platform to drive adoption. He noted that India is yet to enjoy the best days, and he sees his new initiative introducing digital currencies to at least 50 million people in India. He stated:

“The launch of DCX Learn is a big step toward understanding and embracing crypto. It comes at a time when Indian crypto companies are thriving. So, instead of focussing on rumors, we must do all we can to fast-track financial inclusion in India.”

Russia’s Proposed Crypto Ban Opposed by Ministry of Justice

by

Russia’s proposed ban on crypto, which seeks to restrict all crypto-related activities within the Russian Federation, has suffered yet another setback following a negative review by the government’s vital arm.

Russia’s Ministry of Justice challenged the newly proposed bill seeking to ban cryptos on 16 June, exactly seven days after Russia’s Ministry of Economic Development also issued a scathing criticism of the bill. The new bill was proposed by the legislators back in March, but it is believed to be the original idea of the nation’s central bank.

Russia’s proposed crypto ban criticized by both the public and government bodies

The Russian central bank is known to be anti-cryptocurrencies and does not support the use of digital currencies. After being revealed, the new proposal seeking to prohibit individuals from using the country’s necessary facilities to run any crypto-operations was met with some cruel reviews from the Russian cryptocurrency community. 

Notably, the proposal seeks to bar Russians from utilizing the country’s infrastructure to conduct, run, or operate any crypto-related activities. However, individual people will be allowed to inherit digital assets or receive them due to the counterparty’s bankruptcy procedure. Additionally, cryptocurrencies can be seized like any other property by a court order.

More clarity required

According to Russia’s Ministry of Justice, the bill does not clarify the justice system on what to do with confiscated digital assets. Under normal circumstances, marshals sell the confiscated assets through auctions, but with crypto transactions being prohibited in the country, this will be impossible. 

Instead of the standard procedure, the Russian Ministry of Finance proposes that a government agency be assigned to assist Russians in selling their cryptocurrency holdings overseas. Meanwhile, Anatoly Aksakov, the sponsor of the draft bill while speaking to Tass news agency, stated that the draft bill on digital securities is already finalized. It is only awaiting to go through the final reading.