South Korea to Expel Crypto Exchanges Failing to Meet Its Stringent Conditions

February 15, 2024 Bitcoin.com

New York finance regulator tightens crypto listing guidance

November 16, 2023 Coin Telegraph

Crypto firms’ policies on coin listing and delisting must align with a list of standards set by the NYDFS.

Guidelines for firms listing and delisting cryptocurrencies in New York have tightened up to better protect investors, according to the state’s financial regulator.

The New York State Department of Financial Services (NYDFS) unveiled new restrictions on Nov. 15 which mandate crypto companies submit their coin listing and delisting policies for NYDFS approval.

Company policies will be measured against more stringent risk assessment standards set forth by the NYDFS to protect investors. Technological, operational, cybersecurity, market, liquidity and illicit activity risks of the tokens are among the factors to be considered by the NYDFS.

The incoming changes apply to all digital currency business entities licensed under the New York Codes, Rules and Regulation or limited purpose trust companies under the state’s Banking Law. The NYDFS initially called for public feedback on the proposal in September.

NEW: DFS Superintendent Adrienne A. Harris Adopts New Regulatory Guidance Regarding the Listing of Virtual Currencies

More here: https://t.co/F2eyZKzucG pic.twitter.com/p5kfXfUVnO
— NYDFS (@NYDFS) November 15, 2023

Cryptocurrency firms with a previously approved coin listing policy are not permitted to self-certify any tokens until they submit to and receive approval from the NYDFS.

Among the firms that must comply with the new rules are stablecoin issuer Circle, crypto exchange Gemini, fund manager Fidelity, trading house Robinhood and payments giant PayPal.

All affected firms must meet with the NYDFS by Dec. 8, 2023, to preview their draft coin listing and delisting policies and submit them by Jan. 31, 2024.

Superintendent of Financial Services Adrienne A. Harris said the financial regulator would implement an “innovative and data-driven approach” to oversee coin listings, delistings and the cryptocurrency market more broadly.

Harris stressed the new rule isn’t part of a state-wide crackdown on the cryptocurrency industry:

“[We want] to ensure that New Yorkers have a well-regulated way to access the virtual currency marketplace and that New York remains at the center of technological innovation and forward-looking regulation.”

In February, NYDFS said it broadened its ability to identify cryptocurrency-related illicit activities, such as insider trading and market manipulation.

About 690 blockchain-based companies are based in New York, while 19% of New Yorkers own cryptocurrency, according to an August report by Coinbase.

Magazine: NY sues crypto firms, FTX’s Nishad faces 75 years in jail, and Grayscale’s new BTC filing: Hodler’s Digest, Oct. 15-21

Namibia signs crypto exchange regulation bill into law

July 26, 2023 Coin Telegraph

Bank of Namibia

The law will officially enter into force at a date determined by Namibia’s Ministry of Finance.

The Namibian Government officially signed a law to regulate Virtual Asset Service Providers operating in the country last week, reversing its original 2017 decision to ban cryptocurrency exchanges.

On July 21, the VASP-regulating law was inserted into the Gazette of the Republic of Namibia after previously being approved in Namibia’s National Assembly on July 6 and signed by President Hage Geingob on July 14.

The bill called the Namibia Virtual Assets Act 2023 aims to assign a regulatory authority to supervise crypto exchanges in the country. It is the first law laying out how the country should regulate cryptocurrency-related activities.

It will enter into force at a date determined by Namibia’s Ministry of Finance.

*The bill became law when it was put into the Gazette of the Republic of Namibia. Source: Namibia Government.*

Among the top aims of the law is to ensure consumer protection, prevent market abuse and mitigate the risks of money laundering and the financing of terrorism.

Non-compliant providers could reportedly face penalties of up to $671,000 (10 million Namibian dollars) and 10 years in prison. The country's central bank, the Bank of Namibia, maintains its position that cryptocurrencies will not hold legal tender status in the country.

Namibia’s legal U-turn started in May 2018 when the Bank of Namibia revised its original decision to ban cryptocurrency exchanges.

Earlier this month, South Africa’s financial regulator announced that all cryptocurrency exchanges in the country will be required to obtain licenses by the end of 2023 in order to continue operations.

Other African nations that have passed cryptocurrency laws include Botswana, Kenya, Mauritius and Seychelles. The Central African Republic made Bitcoin (BTC) legal tender in April 2022, however, that legislation was repealed less than 12 months later.

Cameroon, Ethiopia, Lesotho, Liberia, Republic of the Congo, Sierra Leone, Tanzania and Zimbabwe are among the African countries to have enforced a ban on cryptocurrencies according to the International Monetary Fund.

Magazine: Bitcoin in Senegal: Why is this African country using BTC?

Italy’s central bank calls for framework to prevent stablecoin runs

June 29, 2023 Coin Telegraph

Bank of Italy

Bank of Italy is calling for closer regulator scrutiny of stablecoins, which they say “have not proved stable at all.”

Italy’s top banking authority has called for a “robust, risk-based” regulatory framework for stablecoins, which could help prevent a worst case scenario — a “run” on stablecoins.

The central bank’s recently released Markets, Infrastructures and Payment Systems report for June 2023 has called on regulators to apply the same financial conduct standards to stablecoin issuers in the industry.

#Bankitalia #26June Alessandra #Perrazzelli discussed about the evolving regulatory landscape for #DigitalAssets at @pointzeroforum Panel “State of Global Digital Asset Regulation: Navigating Opportunities in an Evolving Landscape”#PZF2023 #PointZeroForum @sif_sfi @elevandi pic.twitter.com/Jm0OBeifZh
— Banca d'Italia (@bancaditalia) June 26, 2023

The bank said the rise of cryptocurrencies, coupled with several “boom and bust cycles” in a largely unregulated environment has caused “significant consumer harm.”

Regulatory attention on stablecoin issuers in particular should be a priority because of its close connection to DeFi, the bank said:

“A robust, risk-based regulation of stablecoins ensuring the prevention of ‘runs’ on their issuers is a necessary condition to reduce the fragility of the DeFi ecosystem, given the prominent role of this asset class in decentralized finance.”

“It is crucial that policy interventions on stablecoins and DeFi are well synchronized since the diffusion of stablecoins [...] is likely to spur new waves of DeFi innovation and increase the interconnection between traditional and decentralized finance,” it added.

The Italian banking authority also noted that stablecoins “have not proved stable at all” — citing the most notable collapse of Terra’s algorithmic stablecoin TerraClassicUSD (USTC) in May 2022.

The adoption of #DLT solutions, especially if featured by weak organizational structures, could undermine the financial system due to lack of controls, lack of specific rules as mitigation tools, interdependence among regulated and non-regulated entities. The fragmentation is…
— Banca d'Italia (@bancaditalia) June 27, 2023

The bank said the industry also needs to debunk “the decentralization illusion” by acknowledging that most decentralized protocols are operated by core stakeholders who can often “extract ownership benefits.”

“Such projects should be brought back to traditional, accountable business structures as a pre-condition for operating in the regulated financial sector,” the bank added.

The bank however stressed that it isn’t necessary to subject every crypto asset or activity to financial services regulation:

“Not all crypto activities and not all forms of crypto-assets need to be covered or should be covered by financial sector regulation, in particular where their issuance, trading and holding do not serve customers’ financial needs through a payment or investment function.”

Among the non-financial use cases enabled by blockchain are decentralized identification, real estate, supply chain, voting and carbon credits.

Italy’s central bank has also called for countries to cooperate and establish an international regulatory framework because the technology operates irrespective of nation state borders.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

Report: Binance Asked to Provide More Information as Dubai Tightens Screws Against Crypto Entities

April 7, 2023 Bitcoin.com

British Bank Natwest Implements New Limits on Cryptocurrency Payments to Combat UK Crypto Scams

March 15, 2023 Bitcoin.com

Nigerian Crypto Leverage Searches Second-Highest Globally — Africa Dominates Searches for Leveraged Trading Products

March 5, 2023 Bitcoin.com

US Treasury and White House to Hold Regular Meetings on CBDCs and Payment Innovations

March 2, 2023 Bitcoin.com

France on the verge of passing stringent crypto firm licensing laws

March 1, 2023 Coin Telegraph

Coin Telegraph

The bill was passed with a vote of 109 in favor and 71 against and will now rely on the approval of president Emmanuel Macron to be signed into law.

The French National Assembly has voted in favor of legislating stricter licensing rules for new cryptocurrency firms in order to harmonize local laws with proposed European Union (EU) standards.

The vote was passed with 109 votes (60.5%) in favor to 71 (39.5%) against. The French Senate has already passed the bill, which now goes to President Emmanuel Macron, who has 15 days to either approve it or send it back to the legislature.

✅ Projet de loi DDADUE dans les domaines de l’économie, de la santé, du travail, des transports et de l’agriculture | Adoption par l’Assemblée nationale, compte tenu du texte de la commission mixte paritaire.
En savoir plus ➡️ https://t.co/CDlQxPrs1b #DirectAN pic.twitter.com/PZ2uuC4MrS
— Assemblée nationale (@AssembleeNat) February 28, 2023

If passed, the new law would oblige France-based cryptocurrency service providers to comply with stricter anti-money laundering rules, show that customer funds are segregated, adhere to new guidelines on reporting to regulators and provide more detailed risk and conflict of interest disclosures as a means to strengthen consumer protection.

The contents of the bill would not, however, apply to the 60 crypto firms registered with the Financial Markets Authority (AMF), the nation’s financial regulator. These firms will continue to comply with the AMF’s rules until the likely passing of the EU’s own crypto regulations with the Markets in Crypto-Assets (MiCA) bill.

The stricter rules would therefore only apply to crypto firms that register from July onwards.

Among the 60-AMF registered companies include Binance, which recently began piloting in-store payments in France with the cloud-based payment platform Ingenico via Binance Pay.

Crypto payments just got easier in France

We've recently partnered with @ingenico, a global payment solutions provider, to enable users to pay in crypto through #Binance Pay.

Another milestone for global crypto adoption pic.twitter.com/S8f8Pab7nW
— Binance (@binance) February 22, 2023

The legislative push for stricter licensing rules was initiated by Hervé Maurey, a member of the French Senate’s finance commission, who in Decemberproposed an amendment to eliminate a clause enabling crypto companies to operate without a full license until 2026.

Bank of France governor, Francois Villeroy de Galhau, also pushed the agenda in a Jan. 5 speech to members of the finance sector in Paris.

Like many regulators around the world, Villeroy de Galhau cited the need to respond to the recent turmoil in the cryptocurrency market as the motive behind the bill, which he wants to come into effect “as soon as possible.”

While MiCA will likely serve as the blueprint for cryptocurrency market regulation in the EU, he added that France simply couldn’t wait around for the more comprehensive laws enacting the licensing regime on digital asset service providers..

The EU is set to finally vote on MiCA regulation in April after two postponements. A successful outcome would likely see the highly anticipated crypto laws come into force sometime during 2024.

‘Unworkable’ bill to ban blockchain immutability is introduced in Illinois

February 20, 2023 Coin Telegraph

Alter

Florida-based lawyer Drew Hinkes described the bill as “the most unworkable state law” related to blockchain and cryptocurrency that he has ever seen.

A recently introduced Illinois Senate Bill has been ridiculed by the crypto community over its "unworkable" plans to force blockchain miners and validators to do "impossible things" — such as reversing transactions if ordered to do so by a state court.

The Senate Bill was quietly introduced into the Illinois legislature on Feb. 9 by Illinois Senator Robert Peters but appears to have been only recently noticed by Florida-based lawyer Drew Hinkes who discussed the bill in a Twitter post on Feb. 19.

The bill titled the “Digital Property Protection and Law Enforcement Act,” would authorize the courts — upon a valid request from the Attorney General or a State's Attorney that is made pursuant to the laws of Illinois — to order a blockchain transaction that is executed via a smart contract to be altered or rescinded.

The act would apply to any "blockchain network that processes a blockchain transaction originating in the State."

*Senator Robert Peter’s bill to ban immutability on blockchains. Source:* *Illinois General Assembly.*

Hinkes described the bill as “the most unworkable state law” related to blockchain and cryptocurrency that he has ever seen.

"This is a stunning reverse course for a state that was previously pro -innovation. Instead we now get possibly the most unworkable state law related to #crypto and #blockchain I’ve ever seen," he said.

The bill states that any blockchain miners and validators may be fined between $5,000-10,000 for each day that they fail to comply with court orders.

While acknowledging the need to implement bills that strengthen consumer protection, Hinkes said it would be “impossible” for miners and validators to comply with the bill proposed by Senator Peters.

SB1887 focuses on consumer protection (this is GOOD). But, the manner in which it seeks to protect consumers is to require #node operators ##miners & #validators to do impossible things, or things that create for themselves new criminal & civil liability at pain of fines/ fees /3
— Drew Hinkes (@propelforward) February 19, 2023

Hinkes was also shocked to see that “no defense” would be available to miners or validators that operated on a blockchain network that “has not adopted reasonable available procedures” to comply with the court orders.

The bill also appears to mandate "any person using a smart contract to deliver goods and services" to include code in the smart contract which can be used to comply with court orders.

“Any person using a smart contract to deliver goods or services in this State shall include smart contract code capable of enforcing court orders regarding the smart contract.”

If you thought that was bad. Get ready to #Illinoize your blockchain! Yes, #Illinois is going to force you to re-write your blockchain- specifically by including smart contract code capable of responding to court orders. And if you don’t, you can be sued /10
— Drew Hinkes (@propelforward) February 19, 2023

Other members of the cryptocurrency community have responded with similar ridicule of the bill proposed by Peters.

Crypto analyst “foobar” noted to his 120,800 Twitter followers on Feb. 19 that court ordered transactions would need to — somehow — be amended “without needing the private key” of the participants, which he considered to be “hilarious.”

this is hilarious, Illinois is proposing a bill that would make miners & validators “respond to a court order by including transactions on the blockchain without needing the private key”

why are you refusing to comply, transfer satoshi’s bitcoin to governor pritzker! off to jail https://t.co/7JcpktWMgH pic.twitter.com/FPKLsFNE3e
— foobar (@0xfoobar) February 19, 2023

Gabriel Shapiro, lawyer and general counsel at investment firm Delphi Labs explained very briefly to his 34,100 Twitter followers on Feb. 19 that the bill would essentially try to ban immutability on blockchains:

TLDR--they are trying to ban immutability https://t.co/HSg00pcFHx
— _gabrielShapir0 (@lex_node) February 19, 2023

Meanwhile, Carla Reyes, assistant professor at Southern Methodist University School of Law in a Feb. 19 tweet, stated that lawmakers should only introduce bills if they understand how the technology works.

While immutability is a common property in blockchains and distributed ledgers, the Peters-sponsored bill explained that such networks lack an enforcement mechanism that can be tapped into by the courts:

“As a result, the cost to enforce legal rights in digital property is often prohibitive such that the property rights cannot be vindicated and the vast majority of blockchain crimes go unpunished.”

Fraud and mistake would be two of the most commonly used cases where Illinois courts may order for a blockchain transaction to the victim or original sender, the bill noted.

The bill also wants to help users recover their assets if they lose their private keys.

While the bill was only introduced on Feb. 9, it will need to be "read" and voted in by three separate committee hearings before being passed on to Illinois Governor Jay Pritzker to officially sign the bill into law.

The first reading took place on the same day it was introduced into the Illinois General Assembly by Peters.

If it is ever passed, the contents of the bill would take effect 30 days after becoming law.

consumer protection

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