Global Crypto Regulation Is a Brain Teaser for the Industry

Crypto vs. the World

Crypto picked up a significant victory in Europe on Monday. The European Parliament has voted to advance a regulatory proposal without a controversial provision that would ban proof-of-work-based cryptocurrencies like bitcoin.

But the debate in Europe is far from over. And that highlights a major challenge for the industry: the battle over how crypto should be regulated is playing out in different ways in major geographies.

The EU’s approach to crypto regulation is slow but steady. The proposed regulatory framework in the Crypto Asset Markets Bill could pave the way for the digital asset industry internationally if passed into law.

• First introduced in 2020, the Markets in Crypto Assets proposal has undergone a number of revisions and delays due to controversial language requiring environmental sustainability standards for proof-of-work-based cryptocurrencies like the bitcoin and the initial version of ether. While some EU leaders have called for a proof-of-work ban since November, the EU vote has finally excluded the language.
• “Many countries around the world will now be looking closely at MiCA,” said Stefan Berger, the member of the European Parliament behind the legislation. in a press release. He called it a “pioneer” in building “reliable oversight structures” – something crypto companies in the US have been calling for.
• While many in the crypto industry saw Monday’s vote as a victory, the industry is expected to see more legislation proposed to address the negative environmental impact of crypto, in line with the goals of the European Green Deal. .
• The European Commission will present a proposal to amend the MiCA Bill to include wording for “the EU sustainable finance taxonomy [of] all crypto-asset mining activities that contribute substantially to climate change mitigation and adaptation” by January 2025.

The UK, meanwhile, is cracking down on crypto, with a focus on stablecoins. The UK, which has charted a separate regulatory path since Brexit, is struggling to obtain proper licensing and registration for the industry.

• The Financial Conduct Authority announced this month that he conducted 50 live investigations into rogue crypto businesses after opening more than 300 cases related to unregistered crypto businesses.
• The Treasury has also revealed its intention to specifically regulate stablecoinsas they were considered an immediate risk to traditional payment methods.
• But as it charts its own course on enforcement, Britain is expected to be “largely consistent” with the EU’s approach to crypto regulation, noted ComplyAdvantage, a London-based provider of financial compliance software and data.

Crypto Faces Bigger Regulatory Troubles in the US The country’s fragmented financial regulatory system, with multiple agencies playing a role in crypto and 50 states exercising some level of financial oversight, is a headache.

• The crypto is under fire on multiple fronts. The SEC argues that many cryptocurrencies are actually securities that must be subject to strict regulations. The Treasury Department is concerned about financial stability as well as money laundering and other crimes.
• The United States has “separate securities laws and separate derivatives or commodity laws” as well as “very broad concepts of what constitutes a security,” Michael Philipp, a partner at Morgan, told Protocol. , Lewis & Bockius.
• This makes the United States the “most complex” and “hardest place to do business” for crypto companies, he added. Philipp’s Advice for Crypto Entrepreneurs: “Unless You Can Commit to Regulation [process]start somewhere abroad.

“Reason and logic” prevailed in Europe, Diogo Mónica, President of Anchorage Digital said of the EU vote. But there are plenty more battlegrounds ahead for crypto on potentially much tougher rules. If you plan to operate globally, be prepared to rack up the miles. The only good news is perhaps that Brussels Airlines is take back his Dulles non-stop this month.

—Lindsey Choo (E-mail | Twitter) and Benjamin Pimentel (E-mail | Twitter)

A version of this story first appeared on Protocol.com. Read it here.

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on the money

On protocol: Block plans to use a fingerprint sensor for its new Bitcoin hardware wallet to “achieve seamless authentication”, but it also acknowledged that this might not work for, say, people who wanted to share a wallet with members of their family.

Sen. Joe Manchin has spoken out against the Fed’s confirmation of Sarah Bloom Raskin. Democratic senator likely confirmed Raskin’s Fed almost impossible after saying he couldn’t support her because of his views on climate risks.

TikTok may soon allow crypto ads. The social media app is would have run beta tests for crypto advertisements in the United States and Canada, and if successful, will allow crypto companies registered with an approved regulatory body to run paid advertisements.

Ukraine has partnered with FTX and Everstake to launch a crypto donation website. Along with its Kuna exchange, Ukraine new crypto donation siteAid for Ukraine, will convert the donated crypto to fiat and send it to the National Bank of Ukraine.

Japan has asked crypto exchanges to comply with Russian sanctions. Japanese authorities have ordered crypto exchanges not to process transactions subject to the asset freeze sanctions imposed on Russia and Belarus.

A UN report said Mexican cartels laundered $25 billion a year in bitcoins. The Jalisco Next Generation Cartel and the Sinaloa Cartel increasingly use small online bitcoin purchases to avoid money laundering checks, the International Narcotics Control Board has said.

Understood

Elon Musk thinks investing in physical things is better than dollars, and also thinks people get investment advice from Twitter. “As a rule of thumb, for those looking for advice on this thread, it’s usually better to own physical assets like a house or shares in companies that you believe make good products, than dollars when inflation is high I still own and will not sell my bitcoin, [ether] or doge fwiw”, he tweeted. People were fired up by Musk’s admission that he owns ether.

Running PayPal CEO Dan Schulman is more interested in using crypto in payments. “I think the first things everyone thinks about crypto, buying and selling it, and what the price of bitcoin will be tomorrow, is the least interesting part of digital currencies for me,” he said in an interview with CTech.

Crypto miners pass from Kazakhstan following infighting and government pressure, having moved there just six months ago. “It’s a mess, basically, a big mess,” Alejandro De La Torreformer vice president of the bitcoin mining pool poolin, noted.

Deal flow

Acorns is valued at $1.9 billion after raising $300 million. The investment app round F series was led by TPG, with participation from Bain Capital Ventures, BlackRock, Galaxy Digital and Thirty Five Ventures.

Loanable is worth $4.5 billion after raising $275 million. The UK Consumer Loan Company fundraising was led by the Ontario Teachers’ Pension Plan Board.

Alfred raised $125 million and acquired RKW Residential. The Home Tech Company last round was led by Rialto Capital, with participation from NEA, 166 2nd Financial Services, Holland Management and others.

Lunar raised $76 million. The digital bank series D-2 round was led by Heartland, with participation from existing investors Kinnevik, Tencent and IDC Ventures.

Branch has raised $75 million. The labor payment service round C series was led by Addition, with participation from new and returning investors including General Atlantic, Drive Capital, Crosscut Ventures and Indeed.

Gauntlet achieved unicorn status after raising $23.8 million. The blockchain financial modeling service round series B was led by Ribbit Capital, with participation from existing investors Paradigm and Polychain Capital.

PPRO acquired Alpha Fintech. With the acquisitionthe digital payment company hopes to strengthen its presence in the Asia-Pacific region and improve its services and products.

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