• Shyft Network
  • Posts
  • Veriscope Regulatory Recap - 12th September to 25th September

Veriscope Regulatory Recap - 12th September to 25th September

Welcome to the latest edition of our Veriscope crypto regulatory newsletter!

Welcome to the latest edition of our Veriscope Crypto Regulatory Newsletter, your trusted source for the latest regulatory developments shaping the global cryptocurrency space.

In this edition, we will navigate through the evolving regulatory frameworks in the European Union and the United Kingdom, touching on significant legislations like the DAC8 and the Economic Crime and Corporate Transparency Bill and highlighting the collaborative endeavors of regulatory bodies with crypto enterprises.

We will also glance at Malta's alignment with the MiCA regulation and scrutinize the broader international call for harmonized cryptocurrency oversight.

Emerging EU Regulations Set Global Precedence

European Union: The crystallization of crypto regulations within the European Union is casting ripples through the global financial waters.

Recently, DAC8, a directive empowering tax authorities, received robust backing in the European Parliament, indicating a united front in the enhanced oversight ofof crypto transactions to curb tax evasion and fraud.

This directive aligns itself with the overarching MiCA legislation and the Crypto-Asset Reporting Framework (CARF), forming a cohesive monitoring network for all EU-based crypto transactions.

However, the critics argue that DAC8 barely differentiates itself from CARF, potentially impacting individual member states' autonomy in digital oversight.

The United Kingdom: Parallelly, the United Kingdom is on the cusp of endorsing the Economic Crime and Corporate Transparency Bill.

This legislation, sharpened over time, is aimed at addressing financial crimes related to digital currencies. It underlines the necessity for precise modifications to maintain focus on illicit funds while upholding corporate integrity.

Additionally, the Financial Conduct Authority (FCA) in the UK is actively seeking collaboration with crypto businesses. Their ambition is to forge balanced and conducive guidelines that foster growth while ensuring a stronghold on Anti-Money Laundering and Counter-Terrorist Financing protocols.

Malta: Venturing south, Malta's Financial Services Authority (MFSA) is aligning its stance with MiCA, illustrating a worldwide movement towards unified regulatory frameworks.

This adaptation is critical for establishing orderly transition and operational stability in the crypto sector.

International Perspective: The concerted movement towards comprehensive regulation is reflective of a wider international push for harmonized oversight.

The European Parliamentary Research Service (EPRS) advocates for such harmonization, spotlighting the disjointed policies prevalent in the U.S. and spotlighting potential risks inherent to varied regulatory actions across the globe.

These unfolding regulatory developments depict a balanced interplay between innovation and governance in the crypto realm, raising pivotal questions about the convergence of international crypto norms and the future trajectory of the digital financial ecosystem.

The repercussions of these regulatory symphonies will inevitably sculpt the crypto landscape, defining its global resonance and directional flow.

Now, let’s analyze two of these major developments and look into their possible impact on the broader crypto ecosystem.

UK Nears Crucial Legislative Milestone: A Closer Look at the Impending Crypto Regulations

The UK’s meticulous legislative journey around cryptocurrency regulation is poised at a critical juncture, with the Economic Crime and Corporate Transparency Bill inching closer to becoming law.

Initiated last September, the legislation aims to alleviate financial crime concerns linked to cryptocurrencies, having evolved through extensive evaluations.

The bill seeks to preserve the focus on funds accrued from illicit activities while clarifying corporate integrity guidelines, especially for foreign entities operating within the UK.

The Financial Conduct Authority (FCA) has also articulated its willingness to work with crypto enterprises to formulate a holistic regulatory framework, emphasizing mutual cooperation and adherence to Anti-Money Laundering and Counter-Terrorist Financing protocols.

The Impact on the Crypto Ecosystem

Positive Aspects:

  • Enhanced Trust and Legitimacy: The collaborative approach between regulators and industry could elevate trust and legitimacy within the sector.

  • Market Stability: Clear, well-defined guidelines could contribute to greater market stability and reduced fraudulent activities.

Negative Aspects:

  • Operational Constraints: Strict adherence to the regulatory framework may impose operational constraints on crypto entities, potentially impacting innovation.

  • Market Participation: The stringent regulatory environment might deter new entrants and could influence market dynamics, impacting both consumers and businesses.

EU Urges Non-EU Regulators for Tighter Crypto Oversight

The European Parliamentary Research Service (EPRS) has underscored the critical need for cohesive regulation in the global cryptocurrency market, especially beyond the European Union, as the Markets in Crypto-Assets Regulation (MiCA) Act progresses towards its December 2024 enactment.

The EPRS report warns of potential risks to the EU’s financial system and autonomy, citing divergent policies in the U.S. and anticipated regulatory divergence between the UK and the EU, which could lead to a lack of legal clarity and regulatory certainty.

The Impact on the Crypto Ecosystem

Positive Aspects:

  • International Cohesion: The EPRS’s emphasis on unified regulations could propel a movement toward international cohesion in crypto policies, potentially fostering a harmonized global environment for crypto development and investment.

  • Enhanced Legitimacy: The pursuit of regulatory alignment can elevate the legitimacy of the crypto sector, possibly resulting in increased trust and participation from both individual and institutional stakeholders.

Negative Aspects:

  • Regulatory Overreach: The call for tighter oversight may spur stringent and inflexible regulatory frameworks, possibly imposing barriers to entry and constraining the dynamism inherent to the crypto industry.

  • Divergent Compliance Burdens: The varying pace of regulatory evolution across different jurisdictions may place inconsistent compliance burdens on crypto enterprises, potentially affecting market diversity and competitive balance.

Interesting Reads


VASPs need a Travel Rule Solution to comply with the FATF Travel Rule. Have you zeroed in on it yet? Check out Veriscope, the only frictionless crypto Travel Rule compliance solution.

Visit our website to read more, and contact our team for a discussion.

Follow us on X (Formerly Twitter), LinkedIn, Telegram, and Medium for up-to-date news from the world of crypto regulations. To keep up-to-date on all things crypto regulations, sign up for our newsletter.