Veriscope Regulatory Recap - February 21st to March 4th

Welcome to the latest Veriscope Regulatory Recap. In this edition, we dive into Taiwan's upcoming digital asset regulations, Russia's FATF assessment, the US's legislative push on crypto reporting, and the UK's steps towards regulating stablecoins and staking services. Join us as we navigate these global shifts in the crypto regulatory landscape.

Global Crypto Regulatory Shifts

Around the globe, countries are revisiting their regulatory stances on cryptocurrencies, marking a period of significant adaptation in response to the digital asset market's expansion. 

In Taiwan, the Financial Supervisory Commission (FSC) is preparing to present new digital asset regulations by September 2024, focusing on investor protection and market integrity. This move is part of Taiwan's broader effort to address the challenges and opportunities presented by the integration of digital assets into the traditional financial ecosystem. 

Another major development over the last two weeks came from Russia, as its standing with the Financial Action Task Force (FATF) has shifted due to perceived gaps in crypto oversight. Reportedly, the FATF's assessment points to the need for clearer guidelines and definitions within Russia's regulatory framework to monitor and control digital financial transactions effectively.

In North America, the United States is witnessing legislative efforts aimed at refining the regulatory landscape for cryptocurrencies and related services. Recent proposals challenge existing guidance on financial institutions' reporting of crypto assets and seek to bolster the Secret Service's capabilities in investigating crypto-related cybercrimes. 

Meanwhile, the UK is advancing towards implementing cryptocurrency regulations, with a focus on stablecoins and staking services. 

These developments highlight a global trend towards recalibrating regulatory frameworks to better accommodate the unique aspects of digital assets. As countries grapple with the complexities of crypto regulation, the outcomes of these efforts will likely shape the future of digital finance.

Taiwan Sets September Deadline for Comprehensive Crypto Regulation

Taiwan's Financial Supervisory Commission is gearing up to introduce a draft of new digital asset regulations in September 2024, marking a significant step towards regulating the burgeoning digital asset market. The draft, as outlined by FSC Chairman Huang Tien-mu, aims to bolster market regulation and investor safety amidst concerns over the potential for fraud within the digital currency space.

The proposed legislation, including the Virtual Asset Management Bill introduced in October, seeks to enhance customer protection and industry oversight, imposing stiff penalties for non-compliance. 

Speaking of its possible impact on Taiwan's crypto ecosystem, clearer regulations may attract more institutional investors, fostering a safer and more stable investment environment. On the downside, stringent measures and the potential for heavy fines could dampen innovation, especially among startups and smaller entities struggling with compliance costs. 

US House Committee Challenges SEC Guidance

The US House Financial Services Committee has shown majority support to repeal the SEC's Staff Accounting Bulletin 121 (SAB 121), which mandates financial institutions to list customers' crypto assets on their balance sheets. This guidance, criticized for potentially inflating balance sheets and hindering banks from engaging in digital asset custody, faces opposition for its implications on the sector's operational dynamics.

Critics argue that SAB 121 limits traditional financial institutions' participation in the burgeoning crypto market, especially in the context of the SEC's approval for spot Bitcoin ETFs, predominantly custodied by non-bank entities. On the flip side, proponents of the guidance advocate for its role in clarifying custody responsibilities amid the volatile crypto landscape. 

Interesting Reads

A Guide to Crypto Travel Rule Compliance in Japan

A Guide to FATF Travel Rule Compliance in the Philippines

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