Regtech Digest (16 March 2021)
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Our Top 5 Articles From the Week
The SEC Releases Compliance Notice on Future Crypto Regulations
As the traditional financial world begins its mainstream adoption of crypto assets, the process of legitimizing digital assets as financial products pose a myriad of risks and regulatory challenges. Today, the U.S. Securities and Exchange Commission (SEC) released an 8-page document that details the framework in which the agency will examine digital asset investments. Demanding regulatory compliance across areas ranging from custody, bookkeeping, registration requirements to conflicts of interest protocols, the SEC has made it clear to major broker-dealers and investment advisers that digital assets will face similar levels of scrutiny as traditional securities. [US SEC]
DeFi Sector May Face Threat from New EU Crypto Regulations — Survey
European crypto and blockchain players are worried that incoming regulatory frameworks could usher in “excessive requirements” that could “pose significant challenges for crypto-based projects,” particularly in the decentralized finance (DeFi) space, with “irreconcilable” obstacles, a survey has found. The survey was commissioned by the International Association for Trusted Blockchain Applications (INATBA), a group founded in 2019 by 106 “developers and users of [distributed ledger technology],” as well as regulators and policymakers. The survey questioned EU-based and -servicing companies and individuals, gauging their response to a European Commission initiative revealed last year. [Crypto News]
Seychelles Regulator Issues Investor Alert Over Crypto Exchange Huobi Global
The Seychelles Financial Services Authority (FSA) alerted investors Monday over an entity called Huobi Global Limited. The Seychelles regulator believes the entity is linked to cryptocurrency exchange Huobi Global and is operating in the country despite never being licensed to do so. The International Business Company (IBC) Huobi Global Limited “appears to be affiliated” with the online trading platform of the same name, the Monday notice states. The FSA is encouraging investors to exercise caution when dealing with the company. Talking to CoinDesk, a Huobi representative said: “Huobi Global Limited is a Seychelles-registered company that is part of Huobi Group. It provides services to global customers in accordance with applicable laws.” [Coindesk]
South Korean Authorities Are Reportedly Planning to Impose Heavy Fines on Businesses Violating Crypto Regulations
South Korean authorities have stated that they’re planning to impose heavy penalties or fines on individuals and businesses violating applicable guidelines for cryptocurrency transactions. The Korean financial regulator stated that it would impose a fine on virtual currency exchanges if they fail to report suspicious cryptocurrency transactions. The Financial Services Commission of Korea (FSC) has reportedly introduced new penalties for virtual currency service providers. The FSC says it will impose heavy fines on local digital asset exchanges if they do not report potentially fraudulent transactions. [Crowdfund Insider]
Turkish Treasury Exploring Digital Currency With Regulators
Turkey is preparing to end its “wait and see” policy towards digital currency regulation, with the news that the country’s finance ministry is working with regulators to devise a more substantial policy response. The Turkish Ministry of Treasury and Finance tweeted that it was beginning work with a number of regulatory bodies in the country to assess the risks posed by cryptocurrency, and to devise a government solution. “We share the rising concerns about crypto with the rest of the world. The developments (on crypto around the world) and the state of crypto in Turkey are closely monitored by our ministry. We are collaborating with the Central Bank, Banking Regulation and Supervision Agency, and Capital Markets Board within this frame under the presidency of Deputy Minister.” [Coingeek]
Merkle Science News
MiCA: A Guide to the EU’s Proposed Markets in Crypto-Assets Regulation
A detailed new digital finance package (DFP) was introduced by the European Commission (EC) on 24 September 2020 which, if it is implemented in its current form, would change the European economy over the coming decades. It is known as Markets in Crypto-Assets Regulation (MiCA). In this article, Claire Cummings from Cummings Pepperdine has provided an easy-to-understand overview of the upcoming MiCA regulation.
How Will FATF’s Proposed Travel Rule Amendments Impact Crypto Assets and Businesses?
On Feb 25th, FATF confirmed that it will revise the current Travel Rule and will also seek public consultation on amendments to its June 2019 guidance outlining AML/CFT obligations in relation to virtual assets and virtual asset service providers (VASPs). The upcoming guidelines will be an update to the current June 2019 guideline, also known as the Travel Rule. The regulation requires that VASPs are regulated, licensed and registered, and subject to effective systems for monitoring and supervision.
About Merkle Science
Merkle Science provides blockchain transaction monitoring and intelligence solutions for cryptoasset service providers, financial institutions and government agencies to detect, investigate and prevent the use of cryptocurrency for money laundering, terrorist financing, and other criminal activities. Merkle Science is headquartered in Singapore with offices in Bangalore, Seoul, and Tokyo and backed by Digital Currency Group, Kenetic, SGInnovate, and LuneX.
