Regulation
The year of regulatory compromises
Following the implosion of several crypto operators in 2022, a phalanx of administrative agencies has descended on the industry, declaring it “is plagued by fraud, scams, bankruptcies and money laundering.” In an effort to address these perceived flaws, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have collectively brought in more than 200 enforcement Actions against crypto industry players during 2023.
This article is part of CoinDesk “Crypto2024” prediction package.
Regulators deemed everyone in the industry to be breaking Depression-era laws with questionable applicability to crypto and rejected petitions for more comprehensive regulations. But, as the year draws to a close, the SEC is nursing two black eyes from losses against Ripple And Shades of grey in federal court and the CFTC now seems more interested in regulation actions with crypto exchanges rather than engaging in protracted litigation with them.
If 2023 was the year of regulation versus decentralization (as I predicted last December), next year could very well be one of regulatory compromise. Congress is unlikely to pass comprehensive crypto legislation in an election year, but regulators could choose to scale back a faltering enforcement-by-app regulation strategy and work collaboratively with the industry to develop a regulatory framework provisional by a combination of opinions and comments. establishment of rules and relief without action.
Crypto industry players and regulators have a common interest. Both were caught in the same situation late last year (following the implosion of FTX) and should want to prevent bad actors from crippling the good ones again despite the unlikelihood of a legislative solution immediate.
Although SEC Chairman Gary Gensler is unlikely to abandon his crusade against perceived “widespread non-compliance” within the industry, the SEC and other crypto regulation hopefuls will have to compromise next year. Shades of grey legal challenge The SEC’s rejection of its application for a spot Bitcoin exchange-traded fund (ETF) resulted in a unanimous three-judge panel of the DC Circuit Court of Appeals. holding that the SEC’s action was “arbitrary and capricious.” The U.S. Court of Appeals for the Third Circuit also asked the SEC to respond to a petition for the development of rules on crypto asset securities.
This uprising against administrative agency overreach extends far beyond the crypto industry. In a lawsuit filed by the Chamber of Commerce against the SEC, the Fifth Circuit Court of Appeals governed Last month, the SEC acted arbitrarily and capriciously by failing to consider industry feedback and failing to conduct a proper cost-benefit analysis with respect to regulatory disclosure of repurchases. ‘actions.
And the SEC must defend itself against a trial brought by six industry groups alleging that the agency exceeded its statutory powers by adopting new regulations on private fund advisers. Additionally, the Fifth Circuit Court of Appeals recently said the CFTC that the agency abused its discretion by withdrawing a no-action letter without providing supporting rationale and that an exchange registered with the CFTC is pursue the agency for having arbitrarily and capriciously rejected its proposal to list new event contracts on its platform.
These types of legal challenges to administrative actions will likely continue to circumscribe and force the hands of regulators next year. Following the Grayscale decision, the SEC recently allowed an ether ETF based on futures contracts and it is rumor that the agency will approve a spot bitcoin ETF as early as January.
After the U.S. Court of Appeals for the Third Circuit ordered the SEC to respond to an industry request petition for rulemaking, the SEC chose to deny the petition. But the public accompanying President Gensler Remarks were far from his previous statement that “probably only a few” crypto assets “might not be” securities. “Of course, . . . not all crypto assets are necessarily offered and sold as collateral. . . [and] I look forward to working with crypto projects and intermediaries who want to comply with the law,” he says now.
Although the SEC has no plans to propose a comprehensive regulatory framework for crypto, the agency has proposed a handful of new regulations, expected to be finalized next year and which would impact crypto players. crypto industry. SEC proposals for redefine defining an “exchange” to include “communications protocol systems” and requiring investment advisors jail crypto assets with a qualified custodian, if adopted in their current form, are likely to result in similar administrative law challenges. Several industry groups And crypto companies claim that the SEC violated the so-called “major issues doctrine” by proposing these regulations without clear congressional authorization, among other complaints. The fact that these regulations could be delayed by legal battles and then abandoned in the event of a change in administration could prompt the SEC to make significant concessions.
Crypto industry participants will also have reason to expand their interactions with agency personnel beyond those constrained by a subpoena next year. As institutional demand for crypto continues to rise, industry players are looking to offer a wide range of products that will require collaboration with regulators.
For example, many types of tokenized real-world assets (RWA) fall very clearly within the jurisdiction of the SEC and will require buy-in from SEC staff. Exchanges hoping to offer crypto margin trading and perpetual futures in the United States will need approval from the CFTC. And prudentially regulated financial institutions seeking to offer stablecoins and other crypto products will not be able to do so without permission from their supervisory regulators.
After a long year of legal battles, we can expect the crypto industry and regulators to move closer together (even slightly) in the new year, which will be a net positive for all.
Regulation
Crypto community gets involved in anti-government protests in Nigeria
Amid the #EndBadGovernanceInNigeria protests in Nigeria, a notable shift is occurring within the country’s cryptocurrency sector. As the general public demands sweeping governance reforms, crypto community leaders are seizing the opportunity to advocate for specific regulatory changes.
Rume Ophi, former secretary of the Blockchain Stakeholders Association of Nigeria (SiBAN), stressed the critical need to integrate crypto-focused demands into the broader agenda of the protests.
Ophi explained the dual benefit of such requirements, noting that proper regulation can spur substantial economic growth by attracting investors and creating job opportunities. Ophi noted, “Including calls for favorable crypto regulations is not just about the crypto community; it’s about leveraging these technologies to foster broader economic prosperity.”
Existing government efforts
In opposition to Ophi’s call for action, Chimezie Chuta, chair of the National Blockchain Policy Steering Committee, presents a different view. He pointed out The Nigerian government continued efforts to nurture the blockchain and cryptocurrency industries.
According to Chuta, the creation of a steering committee was essential to effectively address the needs of the crypto community.
Chuta also highlighted the creation of a subcommittee to harmonize regulations for virtual asset service providers (VASPs). With the aim of streamlining operations and providing clear regulatory direction, the initiative involves cooperation with major organizations including the Securities and Exchange Commission (SEC) and the Central Bank of Nigeria (CBN). “Our efforts should mitigate the need for protest as substantial progress is being made to address the needs of the crypto industry,” Chuta said.
A united call for support
The ongoing dialogue between the crypto community and government agencies reflects a complex landscape of negotiations and demands for progress.
While actors like Ophi are calling for more direct action and the inclusion of crypto demands in protest agendas, government figures like Chuta are advocating for recognition of the steps already taken.
As protests continue, the crypto community’s push for regulatory reform highlights a crucial aspect of Nigeria’s broader fight to improve governance and economic policies. Both sides agree that favorable regulations are critical to the successful adoption and implementation of blockchain technologies, signaling a potentially transformative era for Nigeria’s economic framework.
Read also : OKX Exchange Exits Nigerian Market Amid Regulatory Crackdown
Regulation
Cryptocurrency Regulations in Slovenia 2024
Slovenia, a small but highly developed European country with a population of 2.1 million, boasts a rich industrial history that has contributed greatly to its strong economy. As the most economically developed Slavic nation, Slovenia has grown steadily since adopting the euro in 2007. Its openness to innovation has been a key factor in its success in the industrial sector, making it a prime destination for cryptocurrency enthusiasts. Many believe that Slovenia is poised to become a powerful fintech hub in Europe. But does its current regulatory framework for cryptocurrencies support such aspirations?
Let’s explore Slovenia’s cryptocurrency regulations and see if they can propel the country to the forefront of the cryptocurrency landscape. My expectations are positive. What are yours? Before we answer, let’s dig a little deeper.
1. Cryptocurrency regulation in Slovenia: an overview
Slovenia is renowned for its innovation-friendly stance, providing a supportive environment for emerging technologies such as blockchain and cryptocurrencies. Under the Payment Services and Systems Act, cryptocurrencies are classified as virtual assets rather than financial or monetary instruments.
The regulation of the cryptocurrency sector in Slovenia is decentralized. Different authorities manage different aspects of the ecosystem. For example, the Bank of Slovenia and the Securities Market Agency oversee cryptocurrency transactions to ensure compliance with financial laws, including anti-money laundering (AML) and terrorist financing regulations. The Slovenian Act on the Prevention of Money Laundering and Terrorist Financing (ZPPDFT-2) incorporates the EU’s 5th Anti-Money Laundering Directive (5MLD) and aligns with the latest FATF recommendations. All virtual currency service providers must register with the Office of the Republic of Slovenia.
2. Cryptocurrency regulation in Slovenia: what’s new?
Several notable developments have taken place this year in the cryptocurrency sector in Slovenia:
July 25, 2024:Slovenia has issued a €30 million on-chain digital sovereign bond, the first of its kind in the EU, with a yield of 3.65%, maturing on 25 November 2024.
May 14, 2024:NiceHash has announced the first Slovenian Bitcoin-focused conference, NiceHashX, scheduled for November 8-9 in Maribor.
3. Explanation of the tax framework for cryptocurrencies in Slovenia
The Slovenian cryptocurrency tax framework provides clear guidelines for individuals and businesses. According to the Slovenian Financial Administration, the tax treatment depends on the status of the trader and the nature of the transaction.
- People:Income earned from cryptocurrencies through employment or ongoing business activities is subject to personal income tax. However, capital gains from transactions or market fluctuations are exempt from tax.
- Companies:Capital gains from cryptocurrency-related activities are subject to a 19% corporate tax. Value-added tax (VAT) generally applies at a rate of 22%, although cryptocurrency transactions that are considered as means of payment are exempt from VAT. Companies are not allowed to limit payment methods to cryptocurrencies alone. Tokens issued during ICOs must follow standard accounting rules and corporate tax law.
4. Cryptocurrency Mining in Slovenia: What You Need to Know
Cryptocurrency mining is not restricted in Slovenia, but income from mining is considered business income and is therefore taxable. This includes rewards from validating transactions and any additional income from mining operations. Both individuals and legal entities must comply with Slovenian tax regulations.
5. Timeline of the development of cryptocurrency regulation in Slovenia
Here is a timeline highlighting the evolution of cryptocurrency regulations in Slovenia:
- 2013:The Slovenian Financial Administration has issued guidelines stating that income from cryptocurrency transactions should be taxed.
- 2017:The Slovenian Financial Administration has provided more detailed guidelines on cryptocurrency taxation, depending on factors such as the status of the trader and the type of transaction.
- 2023:The EU adopted the Markets in Crypto-Assets (MiCA) Regulation, establishing a uniform regulatory framework for crypto-assets, their issuers and service providers across the EU.
Endnote
Slovenia’s approach to the cryptocurrency sector is commendable, reflecting its optimistic view of the future of cryptocurrencies. The country’s balanced regulatory framework supports cryptocurrency innovation while protecting users’ rights and preventing illegal activities. Recent developments demonstrate Slovenia’s commitment to continually improving its regulatory environment. Slovenia’s cryptocurrency regulatory framework sets a positive example for other nations navigating the evolving cryptocurrency landscape.
Read also : Hong Kong Cryptocurrency Regulations 2024
Regulation
A Blank Sheet for Cryptocurrencies: Kamala Harris’ Regulatory Opportunity
photo by Shubham Dhage on Unsplash
As the cryptocurrency landscape continues to evolve, the need for clear regulation has never been more pressing.
With Vice President Kamala Harris now leading the charge on digital asset regulation in the United States, this represents a unique opportunity to start fresh. This fresh start can foster innovation and protect consumers. It can also pave the way for widespread adoption across industries, including real estate agencies, healthcare providers, and online gaming platforms like these. online casinos ukAccording to experts at SafestCasinoSites, these platforms come with benefits such as bonus offers, a wide selection of games, and various payment methods. Ultimately, all this increase in adoption could propel the cryptocurrency market forward.
With this in mind, let’s look at the current state of cryptocurrency regulation in the United States, a complex and confusing landscape. Multiple agencies, including the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the Financial Crimes Enforcement Network (FinCEN), have overlapping jurisdictions, creating a fragmented regulatory environment. This lack of clarity has stifled innovation as companies are reluctant to invest in the United States, fearing regulatory repercussions. A coherent and clear regulatory framework is urgently needed to realize the full potential of cryptocurrencies in the United States.
While the US struggles to find its footing, other countries, such as Singapore and the UK, are actively looking into the cryptocurrency sector by adopting clear and supportive regulatory frameworks. This has led to a brain drain, with companies choosing to locate in more conducive environments.
Vice President Kamala Harris has a unique opportunity to change that narrative and start over. Regulation of cryptocurrencies. By taking a comprehensive and inclusive approach, it can help create a framework that balances consumer protection with innovation and growth. The time has come for clear and effective regulation of cryptocurrencies in the United States.
Effective regulation of digital assets is essential to foster a safe and innovative environment. The key principles guiding this regulation are clarity, innovation, global cooperation, consumer protection, and flexibility. Clear definitions and guidelines eliminate ambiguity while encouraging experimentation and development to ensure progress. Collaboration with international partners establishes consistent standards, preventing regulatory arbitrage. Strong safeguards protect consumers from fraud and market abuse, and adaptability allows for evolution in response to emerging trends and technologies, striking a balance between innovation and protection.
The benefits of effective cryptocurrency regulation are multiple and far-reaching. By establishing clear guidelines, governments can attract investors and mainstream users, driving growth and adoption. This can, in turn, position countries like the United States as global leaders in fintech and innovation. Strong safeguards will also increase consumer confidence in digital assets and related products, increasing economic activity.
A thriving crypto industry can contribute significantly to GDP and job creation, which has a positive impact on the overall economy. Furthermore, effective regulation has paved the way for the growth of many businesses such as tech startups, online casinos, and pharmaceutical companies, demonstrating that clear guidelines can open up new opportunities without stifling innovation. This is a great example of how regulation can allay fears of regressive policies, even if Kamala Harris does not repeal the current progressive approach. By adopting effective regulation, governments can create fertile ground for the crypto industry to thrive, thereby promoting progress and prosperity.
Regulation
South Korea Imposes New ‘Monitoring’ Fees on Cryptocurrency Exchanges
Big news! The latest regulatory changes in South Korea are expected to impact major cryptocurrency exchanges like Upbit and Bithumb. Under the updated regulations, these platforms will now have to pay monitoring fees, which could cause problems for some exchanges.
Overview of new fees
In the latest move to regulate cryptocurrencies, the Financial Services Commission announced on July 1 the revised “Enforcement Order of the Act on the Establishment of the Financial Services Commission, etc.” update “Regulations on the collection of contributions from financial institutions, etc.” According to local legislation newsThe regulations require virtual asset operators to pay supervisory fees for inspections conducted by the Financial Supervisory Service starting next year. The total fees for the four major exchanges are estimated at around 300 million won, or about $220,000.
Apportionment of costs
Upbit, which holds a dominant market share, is expected to bear more than 90% of the total fee, or about 272 million won ($199,592) based on its operating revenue. Bithumb will pay about 21.14 million won ($155,157), while Coinone and GOPAX will contribute about 6.03 million won ($4,422) and 830,000 won ($608), respectively. Korbit is excluded from this fee due to its lower operating revenue.
Impact on the industry
The supervision fee will function similarly to a quasi-tax for financial institutions subject to inspections by the Financial Supervisory Service. The new law requires any company with a turnover of 3 billion won or more to pay the fee.
In the past, fees for electronic financial companies and P2P investment firms were phased in over three years. However, the taxation of virtual asset operators has been accelerated, reflecting the rapid growth of the cryptocurrency market and increasing regulatory scrutiny.
Industry reactions
The rapid introduction of the fee was unexpected by some industry players, who had expected a delay. Financial Supervisory Service officials justified the decision by citing the creation of the body concerned and the costs already incurred.
While larger exchanges like Upbit and Bithumb can afford the cost, smaller exchanges like Coinone and GOPAX, which are currently operating at a loss, could face an additional financial burden. This is part of a broader trend of declining trading volumes for South Korean exchanges, which have seen a 30% drop since the new law went into effect.
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