Veriscope Regulatory Recap - 18th October to 30th October
Welcome to the latest edition of our Veriscope crypto regulatory newsletter!
Welcome to the latest Veriscope Regulatory Recap. In this issue, we'll explore the US' stance on cryptocurrency mixers, the UK's new legislation on illicit crypto, Taiwan's initial steps into crypto regulation, and Turkey's progress on the crypto front. Let's dive in!
Major Global Crypto Regulatory Developments Unveiled
The US: As regulatory scrutiny tightens, FinCEN is eyeing increased transparency measures for crypto "mixers."
The UK: Meanwhile, the UK has given royal assent to a bill that arms law enforcement with the power to seize crypto linked to crime. Introduced last September, the Economic Crime and Corporate Transparency Bill addresses a spectrum of crimes and enables asset seizure without a formal conviction.
Taiwan: Amidst global regulatory shifts, Taiwan steps into the crypto regulatory arena with a bill presented to the Legislative Yuan. This draft legislation seeks to define operational standards and emphasizes industry affiliations. Notably, it flags potential divergences between crypto derivatives and traditional finance, hinting at tailored regulations down the line.
Turkey: Positioned between Europe and Asia, Turkey is charting its regulatory course. Their recent Presidential Annual Program hints at a structured crypto framework by 2024, encompassing clear legal definitions and tax guidelines, though details are still under wraps.
Now, with this global panorama in view, let's delve deeper into a couple of these significant shifts and explore their broader implications for the crypto ecosystem.
UK Passes Law to Seize Illicit Crypto Assets
The UK's new Economic Crime and Corporate Transparency Bill addresses cryptocurrencies linked to illicit activities like money laundering, drug trafficking, terrorism, and cybercrimes.
One of the key provisions of the bill permits swift recovery of crime-associated crypto assets without conviction. Lawmakers expect this would enhance the capability of law enforcement agencies for quicker and more impactful asset seizures.
On the upside, this bolsters security and trust in the UK's cryptocurrency landscape, aiming to shield consumers, appeal to institutional investors, and align with international norms. Conversely, these measures could risk overreach, infringing on individual rights, and potentially stifle innovation. There's also the concern of unintentional asset seizures from innocent individuals, posing legal and reputational issues.
FinCEN Proposes New Regulation for Crypto Mixers
The US Department of the Treasury's financial crimes unit is considering the designation of crypto mixers as a primary concern for money laundering, given their potential use by malicious actors like cybercriminals and terror groups.
If greenlit, financial firms would be mandated to report suspicious mixer-related transactions, possibly leading to further restrictions in their dealings with these mixers. This comes after US sanctions on mixers like Tornado Cash and Blender and increasing concerns over illegal crypto use.
The proposed rule, which will be open to public feedback for 90 days, is part of FinCEN's efforts in the crypto market domain.
While this initiative aims to highlight potentially dubious transactions, it might inadvertently affect legitimate users who prioritize privacy. Additionally, the increasing scrutiny might elevate operational costs for financial entities and challenge the intrinsic privacy values of the crypto sphere.
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