Veriscope Regulatory Recap - 17th April to 23 April
Welcome to another edition of the Veriscope Regulatory Recap, where we spotlight key regulatory shifts and their potential influence on the digital world.
This week, we examine the UK's plan to introduce specific crypto regulations within the next year, the EU's approval of the MiCA legislation, Abu Dhabi seeks feedback on their proposed DLT structure, and the implementation of anti-money laundering guidelines for Indian crypto exchanges.
Dive in with us as we explore these vital developments shaping the future of the crypto landscape.
UK to Introduce Crypto Regulations Within a Year
The UK government plans to introduce specific cryptocurrency regulations within the next year, according to Andrew Griffith, economic secretary to the UK Treasury.
The consultation period for proposed regulations ends on 30 April.
Griffith said the UK could use existing regulations and new ones to regulate crypto assets.
“Wherever possible, we want to see the same asset, the same transaction regulated in the same way. But there are some additional opportunities in the crypto asset or distributed ledger space, and we want to take advantage of that,” said Griffith.
The aim is to position the UK as a crypto-friendly location for firms to set up shop.
The Financial Services and Markets Bill is currently passing through Parliament and includes provisions for asset-backed stablecoins.
EU Approves MiCA
The European Parliament has approved the Market in Crypto-assets (MiCA), a regulatory framework that seeks to establish clear standards for the cryptocurrency industry.
The new crypto licensing policy got approved with a vote of 517-38 in favor.
Legislators insist that MiCA will prevent incidents like the collapse of FTX and other scandals that plagued the industry last year.
The legislation on stablecoins will reportedly come into effect in July 2024, while the broader rules on crypto providers will come live in January 2025.
Abu Dhabi Seeks Feedback on Proposed DLT Framework
The ADGM Registration Authority is currently seeking input on its proposed legislative framework that focuses on disclosures, liquidation, and governance structures for distributed ledger technology (DLT).
The consultation paper, titled "DLT Foundations Regulations 2023," aims to create a tailored legislative framework that considers the features that might be attractive to developers of DLT projects, including DAOs.
The proposed regulations are focused on service type and governance matters and include provisions for reporting, disclosure, publication, insolvency, and liquidation measures. Comments on the proposed framework must be submitted by May 12.
The UAE has been working on establishing regulations to attract blockchain and crypto firms to the region, with Dubai enacting a crypto regulatory framework earlier this year.
Just last week, the UAE introduced federal licensing requirements for VASPs.
Anti-Money Laundering Rules For Indian Crypto Exchanges
India’s financial sector watchdog, the Financial Intelligence Unit, has shared a set of suggested rules with Indian crypto exchanges to tighten controls over crypto trading.
The rules are likely to be formalized by April 21 and cover proper KYC checks for customers, transaction monitoring, staff training on money laundering prevention, and risk review of products.
They also require compliance with the Financial Action Task Force's Travel Rule and cover storage of crypto assets in cold wallets and donations made to non-governmental organizations using digital tokens. These rules will also cover asset tokenization firms operating in India.
Indian cryptocurrency exchanges are also in talks with the government to establish formal regulations for reporting and monitoring illicit transactions, such as those related to money laundering.
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