The 800-pound gorilla in any conversation about cryptocurrency regulation this week was the removal and collapse of $ 45 billion from the stable TerraUSD currency.
The G-7 is preparing to call on the International Financial Stability Board (FSB) to further push for the creation and approval of a comprehensive, unified set of internationally regulated cryptocurrency regulations, Reuters reported on Thursday (May 19th).
Of course, the FSB has been shouting this message out loud for quite some time, most recently in mid-February, when it launched a formal call for governments around the world to move faster in regulating crypto in general and stablecoins in particular. .
See also: FSB sounds the alarm of growing threats from cryptographic assets
“Cryptocurrency markets are evolving rapidly and could reach a point where they pose a threat to global financial stability due to their scale, structural vulnerabilities and growing interconnection with the traditional financial system,” the FSB said. “Reported outstanding stablecoin assets account for nearly 20% of the total size of U.S. assets held in major institutional and retail money market funds … [while] Concerns about regulatory compliance, the quality and adequacy of reserve assets, and risk management and governance standards remain unresolved.
Read more: FSB tells national regulators to move faster in Stablecoin regulation
Still, the call of the finance ministers and central bankers of the Group of Seven, made “in light of the recent turmoil in the cryptocurrency market,” may make regulators and lawmakers listen.
Europe is ahead of the US U.S., with its Markets in Crypto Assets (MiCA) regulatory framework heading toward a vote. The United States has only begun its efforts with President Joe Biden’s March Executive Order calling on US agencies to submit a proposal in September.
That is underway, but only as suggested by the Commerce Department’s May 19 call for public comment on the Executive Order, which will remain open until July 5th.
Meanwhile, South Korean regulators have begun “emergency” inspections of local cryptocurrencies, the Yonhap news agency reported on Tuesday (May 17th).
“Last week, the financial authorities requested data on the number of transactions and investments, and dimensioned the relevant measures of the exchanges,” said a local cryptocurrency exchange executive, according to Yonhap. “I think they did it to come up with measures to minimize the damage to investors in the future.”
Preparing for Rumble
Observing in Congress testimony that TerraUSD and its sister currency LUNA have gone “from $ 50 billion to nearly zero” in recent weeks, Securities and Exchange Commission (SEC) Chairman Gary Gensler reiterated his (Wednesday, May 18) warning to unregistered cryptographic exchanges. to get in from the cold, threatening continued enforcement actions.
The SEC recently won its first win in this field, when Coinbase revealed its record in its first quarter 2022 earnings announcement on May 10th.
Citing the desire to “have better access to the capital markets quickly and efficiently when needed,” the company said it could also “offer and sell securities in the future,” adding that it had no such plans at the moment.
Related: Coinbase is registered with the SEC to avoid regulatory setbacks
Gensler also said he needed a larger budget to devote even more resources to cryptography.
Also on May 18, The Wall Street Journal reported that the chairman of the Commodity Futures Trading Commission, Rostin Behnam, said his agency is stepping up law enforcement as the number of alleged cases of commodity accelerates. fraud and manipulation of the cryptographic market.
See also: At the Senate hearing, CFTC President Behnam intensifies battle with SEC for cryptocurrency oversight
“Headlines about the loss of tens of millions of dollars in digital assets due to protocol exploits, phishing attacks, damaging vulnerable people and other fraudulent and manipulative schemes have become all too common,” he said. “I’ve said many times that cryptocurrencies have unique features that would benefit from federal market oversight.”
Then there’s the Treasury Department’s Financial Crimes Control Network (FinCEN), whose associate director for enforcement, Alessio Evangelista, has warned the industry to be more aggressive on the blacklist of “problematic” digital wallets, CoinDesk reported.
Scholarships tend to ignore these wallets “until the day of OFAC’s designation or criminal prosecution,” he said, warning that they often ignore “clearly observable red flags that could and possibly should have been noted long ago.”
Good morning, Crypto
In Australia, tax authorities have issued a public warning that the sale of cryptocurrencies, and even non-fungible tokens (NFTs), could attract capital gains taxes.
“Remember, you can’t make up for your cryptocurrency losses with your salary and wages,” Australian Tax Office (ATO) assistant commissioner Tim Loh reminded taxpayers.
Meanwhile, The Guardian reported that the country’s largest financial institution, the Commonwealth Bank of Australia, has announced a pause in launching a cryptocurrency trading feature planned in its banking application.
“As the events of the last week have intensified, it’s clearly a very volatile sector that continues to be of huge interest,” said CEO Matt Comyn. “But along with that volatility and awareness and I guess on a global scale, certainly globally, you can see that there’s a lot of interest from regulators and people who think about the best way to regulate it.”
No release date has been announced.
Hesitation and enthusiasm
In Panama, President Laurentino Cortizo said Tuesday that he was considering a veto on a bill passed by the National Assembly that would allow Panamanians to use cryptocurrencies for payments, CoinDesk reported.
Although he described the bill as a good law, he said it was not good enough given the country’s desire to leave the “gray list” of the Financial Action Task Force (FATF) of countries with weak or insufficient anti-money laundering. (AML) and countering terrorist financing regulation (CFT).
“I have to be very careful if the law has clauses related to money laundering or anti-money laundering activities,” Cortizo said. “That’s very important to us.”
Meanwhile, the experiment of bitcoin as a legal course in El Salvador is not going very well: its issuance of $ 1 billion bitcoin bonds is on ice, the use of bitcoins for payments remains very low and its investment in BTC he lost tens of millions of dollars. dollars, but that did not stop President Nayib Bukele from trying to export it. At a meeting of the Alliance for Financial Inclusion (AFI) this week, he recommended that the 44 developing nations present consider following suit.
He just says no
In Europe, the head of the Capital Markets Supervision and Transparency of the Dutch Financial Markets Authority (AFM) said retail investors should be banned from trading in cryptocurrencies, citing an opaque and manipulation-prone market, CoinDesk reported.
The report also noted that the top AML official of German financial regulator BaFin has called for new decentralized finance (DeFi) regulations, saying that “experience shows that DeFi is not as popular and disinterested as space fans represent” and that it cannot thrive. without specific regulations.
In India, the Reserve Bank of India (RBI) said in a report that crypto could lead to the “dollarization” of the economy.
“Almost all cryptocurrencies are denominated in dollars and issued by foreign private entities, which can lead to the dollarization of a part of our economy that goes against the sovereign interest of the country,” India’s Economic Times reported. Cryptocurrencies “can replace a part of the monetary system [and] it will also undermine the RBI’s ability to regulate the flow of money into the system. “
Read more: India launches Coinbase from the payment interface days after its entry into the market
Indian Prime Minister Narendra Modi has made it very clear that he wants to protect the rupee and has said that the use of crypto for payments will not be allowed.