Veriscope Regulatory Recap - March 6th to March 12th
Welcome to another edition of Veriscope Regulatory Recap!
This week, we have covered the debate on crypto regulations in the US House of Representatives, India enforcing KYC/AML requirements to crypto businesses, and the UK’s FCA Chair calls stringent crypto regulations a must to prevent money laundering risks.
We would also like to reiterate that while it is important to establish regulations that promote investor protection and combat illicit activities, it is equally important to ensure that they are balanced with users' privacy and experience. By doing so, regulators can help to create an environment that fosters innovation, adoption, and responsible use of digital assets.
Let’s dive straight into the recap now!
US House of Representatives Continue to Discuss Crypto Regulations
During the first hearing of the Subcommittee on Digital Assets, Financial Technology, and Inclusion, titled “Coincidence or Coordinated,” several Republicans criticized the Biden administration and the Security and Exchange Commission’s approach to regulating crypto space.
They highlighted the need for comprehensive legislation. And according to the subcommittee chairman French Hill, R-Ark, enforcement actions or regulatory guidance, no matter how extensive they are, can never be a substitute for "the unique role of Congress to legislate.”
The White House published a framework for managing digital assets in the U.S. in September, followed by an executive order issued by President Joe Biden in March 2022.
India Applies AML Provisions to Crypto Transactions
According to a notification issued by the Indian Finance Ministry on March 7th, local crypto exchanges and entities that deal with Virtual Digital Assets or VDAs will have to conduct KYC due diligence on their users.
Entities reporting under this law would be required to maintain a record of all transactions of more than US$12,200 for at least five years.
Local industry stakeholders believe that amidst the concerns about a possible ban on virtual assets, such inclusion of crypto transactions under the AML provisions has legitimized the industry.
UK FCA Chair Believes Crypto Regulations Need to be Appropriately Tough
The United Kingdom’s financial regulator, the Financial Conduct Authority (FCA), is “midway through a quite ambitious reset” with the Financial Services and Markets Bill going through the Parliament, said FCA chair Ashley Alder.
While addressing the perception of whether “speculative crypto is gambling” and “it should be regulated and taxed as such,” Alder said that the financial regulation in this area needs to be appropriately tough.
On the other hand, when asked whether these regulations would “undeservedly” legitimize crypto, Alder said that he believed issues like money laundering could not be tackled without regulations.
He stressed that the Financial Services and Markets Act would give the FCA necessary regulatory powers over the crypto industry when passed.
The Australian Treasury is taking more time to understand the emerging innovations and risks better, while it does not deny the need for action.
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