The Crypto blog: Regulatory News- may 17
📌EU Finance Ministers Approve MiCA Crypto Regulation 📌Democrats Back SEC's Crypto Authority 📌FDIC Admits Crypto Responsible for Signature Bank Collapse 📌EU tax directive requires reporting on all crypto asset transfers 📌Coinbase Massive ETH Withdrawals 📌DOJ to Increase Scrutiny on Crypto Exchanges
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Cryptocurrency News: Regulatory updates
Source: Cointelegraph
The European Union's Markets in CryptoAssets (MiCA) regulation has been approved by finance ministers from all member states, setting clear regulatory guidelines and requirements for the use of cryptocurrencies and related services and activities across the EU. The legislation covers a range of cryptocurrencies, digital assets, utility tokens, and stablecoins, and includes registration and authorization requirements for issuers of cryptocurrencies, exchanges, and wallet providers. Stablecoin issuers must meet certain security and risk mitigation requirements, and cryptocurrency custody services must ensure sufficient security and safety measures to address potential cybersecurity and operational failures. The bill will be published in the Official Journal of the European Union and come into effect within a year, becoming law midway through 2024.
Source: Cointelegraph
The United States Democratic Party has expressed support for the Securities and Exchange Commission's (SEC) total authority over crypto in a circulated memo. The memo highlights key messages for democrats to support the SEC's authority on crypto regulation, including the argument that nearly all digital assets constitute securities. This move has caused backlash from members of the crypto community, with some threatening to give their votes to other parties and others expressing dissatisfaction on Twitter. One community member argued that the Democratic Party is playing god with the future of American innovation.
FDIC Chair Martin Gruenberg has admitted that the collapse of Signature Bank was caused by its reliance on uninsured deposits and exposure to crypto. Signature Bank's lack of adequate risk management and poor governance practices contributed to its downfall, despite the FDIC's shortcomings in acting sooner to curb the crisis. Signature Bank had serviced big players in the crypto industry, including stablecoin issuer Circle and crypto exchange Kraken. Gruenberg's comments align with previous statements from the FDIC in March, claiming that fears related to the crypto market ultimately instigated the bank run.
The European Council has approved updated rules that extend tax reporting requirements to include transfers of crypto assets, in line with the CryptoAsset Reporting Framework and EU Anti-Money Laundering rules. This eighth version of the Directive on Administrative Cooperation (DAC8) requires crypto asset service providers (CASPs) to collect information on all crypto asset transfers to ensure traceability and identify suspicious transactions. It strengthens the EU's AML/CFT rules and proposes the creation of a new European AML body. The regulation requires CASPs to provide information on the beneficiary's name, distributed ledger address, and account number (if applicable) in a secure manner and in advance of the transfer. DAC8 also includes new reporting rules relating to high-income individuals and tougher requirements for communicating Tax Identification Numbers.
Coinbase's wrapped staked ETH (cbETH) has experienced significant growth since its launch, but recently, over 53,400 ETH were withdrawn from Coinbase's cbETH deposit address, indicating that ETH staking was terminated. This withdrawal suggests a sell pressure building for Ethereum, as cbETH is a liquid token that can be used for additional DeFi operations such as lending, swapping, and providing liquidity. Most stakers and entities who have staked Ether have withdrawn incentives rather than their principal after Ethereum's "Shapella" upgrade, accounting for more than 95% of withdrawals.
The US Department of Justice (DOJ) is targeting crypto exchanges, mixers, and tumblers that enable malicious players to carry out their crimes. The director of the national cryptocurrency enforcement team, Eun Young Choi, stated that the regulatory agency would also focus on hacks involving decentralized finance (DeFi), particularly chainbridge hacks. The DOJ is investigating Binance over potential Russian sanctions violations.
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