Regulatory News
European Union (EU)
EU Supervisory Digital Finance Academy focuses on preparing for DORA - The European Banking Authority (EBA) remains committed to facilitating the sharing of knowledge within the supervisory community, with a current emphasis on the Digital Operational Resilience Act (DORA), through the efforts of the EU Supervisory Digital Finance Academy which is actively preparing EU supervisors for the full implementation of DORA on January 17, 2025. The regulation aims to enhance cyber resilience in the European financial system by addressing regulatory gaps and covering various financial services. It introduces six pillars that financial services must adhere to, including ICT risk management, incident reporting, testing, third-party risk management, information sharing, and oversight of critical ICT third-party service providers. The EU-SDFA plays a crucial role in disseminating the knowledge required to supervise complex cyber risks emerging from financial activities.
Bank of Spain endorses Digital Euro and its benefits - Banco de España, Spain's central bank, has joined other European banking institutions in promoting the potential benefits of a digital euro, emphasizing its role in modernizing the financial system. They argue that physical cash does not fully leverage the advantages of the digital economy and society. The digital euro is expected to become a crucial component of the financial system, allowing for offline payments and preserving user privacy, akin to cash transactions. In its online form, user data would remain visible only to their financial institutions, not to the CBDC infrastructure provider, Eurosystem. While the "preparation phase" for the digital euro began on October 18, a final decision on a pan-European CBDC is pending.
United Kingdom (UK)
UK legislation grants authorities the power to confiscate criminal Bitcoin holdings - The UK has introduced the Economic Crime and Corporate Transparency Bill in September 2022. After over a year of debate since it was introduced, the Economic Crime and Corporate Transparency Bill received Royal Assent on October 26. A key provision includes new powers for law enforcement to make it easier to tackle financial crime linked to cryptoassetsThis legislation empowers authorities to seize and freeze cryptocurrencies, like Bitcoin, if used for illicit activities. It targets crimes such as cybercrime, scams, and drug trafficking, allowing for the recovery of crypto assets without a conviction. The bill also addresses the use of digital assets for terrorism-related purposes. This move aligns with the UK government's strategy to regulate cryptocurrencies more rigorously and combat their illicit use, as the country emerges as a major crypto hub in Europe and the world.
FCA warns of common crypto marketing issues - The FCA, on October 25, 2023, issued a warning about crypto marketing. Since October 8, they have been supervising crypto promotions to ensure consumers receive proper information and risk warnings. The FCA has identified three common problems: misleading safety claims, hidden risk warnings, and inadequate information about risks. They are collaborating with businesses to combat illegal promotions and have issued 221 alerts. Consumers are advised to check the Warning List before investing in crypto, as it remains high-risk and largely unregulated. The FCA is taking a tough stance on non-compliance to protect consumers.
Largest Solana DeFi protocol exits UK over FCA rules - Marinade Finance, the leading decentralized finance (DeFi) protocol on Solana, has reportedly blocked users from the UK due to concerns about compliance with regulations set by the UK's Financial Conduct Authority (FCA), according to CoinJournal. The protocol's message informed UK users of the unavailability of their services and suggested actions like liquidity withdrawal. Marinade Finance represents 70% of all Solana blockchain funds. While the specific rules aren't mentioned, Marinade isn't the first to exit the UK market recently, with Binance, PayPal taking similar actions. The UK's FCA introduced the Financial Promotions Regime for cryptocurrency companies on October 8, aiming for fair and transparent advertising in the crypto industry. In his final speech as Deputy Governor for Financial Stability, Jon Cunliffe outlines the state of play for cross-border payments, a UK CBDC, or 'digital pound', and privately issued stablecoins.
LATAM
Argentina's Central Bank fast-tracking Digital Peso legislation - The Central Bank of the Argentine Republic is expediting the process of drafting legislation for the implementation of a central bank digital currency (CBDC). Director Juan Agustín D’Attellis Noguera announced during a public discussion on October 18 that the legislative framework for the digital peso CBDC project, proposed by Minister of Economy Sergio Massa, will be presented "as soon as possible" to the Argentine parliament. Noguera praised Massa's approach to the CBDC and indirectly criticized Bitcoin-friendly presidential candidate Javier Milei's stance on dollarization. Noguera believes the CBDC's traceability would assist the government in tax collection and help stabilize the Argentine economy, with the CBDC potentially becoming a reality by 2024.
Global News
FATF plenary discusses AML progress and global initiatives - The latest Financial Action Task Force (FATF) Plenary, presided over by T. Raja Kumar of Singapore, began on October 25 and concluded on October 27. Delegates from over 200 member jurisdictions and observer organizations, including the IMF, UN, World Bank, INTERPOL, and the Egmont Group, are attending. The FATF's agenda includes discussions on pressing issues such as crowdfunding for terrorist financing, combating illicit financial flows from cyber-enabled fraud, and enhancing standards to prevent non-profit organizations' misuse and improve asset recovery. Progress in anti-money laundering and counter-terrorist financing measures in Finland, Japan, Switzerland and Luxembourg was noted. The plenary will also evaluate measures to combat money laundering and terrorist financing in Brazil.
FinCEN issues alert on crypto transactions tied to Hamas - The United States Treasury Department's Financial Crimes Enforcement Network (FinCEN) has issued an alert, warning financial institutions to identify and report suspicious transactions related to terrorist groups, with a specific focus on Hamas. FinCEN noted that Hamas has utilized fundraising campaigns involving both virtual currency and fictitious charities to support its activities. The alert advises financial institutions to exercise caution when dealing with clients who have conducted transactions with businesses in jurisdictions associated with Hamas, entities listed as Specially Designated Nationals (SDN) by the Office of Foreign Assets Control (OFAC), and those soliciting crypto donations on social media. This warning follows recent concerns about cryptocurrency in the context of terrorist activities, with U.S. lawmakers urging actions to combat illicit crypto use and U.S. Treasury officials sanctioning a Gaza-based crypto operator allegedly tied to Hamas.
Industry News
LATAM
Bitcoin funds deliver highest returns to Brazilian investors in 2023 - Despite the crypto winter, funds with exposure to cryptocurrencies, particularly Bitcoin, have provided the highest returns to Brazilian investors in 2023. According to data from Monitor do Mercado, the HASHDEX Bitcoin fund (HASHDEX BITCOIN FIC FIM) tops the list of the 30 best-performing multimarket funds of the year, with a profit of 51% from January to September. The second and third spots are also occupied by crypto funds, with XP's TREND CRIPTO DÓLAR FIM offering a return of 42.9% and HASHDEX 100 NASDAQ CRYPTO INDEX FIM closely following at 42.8%. Despite the crypto market's challenges, cryptocurrencies continue to outperform other assets like gold and silver, generating substantial returns for Brazilian investors.
Global News
BlockFi emerges from bankruptcy and resumes withdrawals - BlockFi, the crypto lending platform, has announced its emergence from bankruptcy and its readiness to facilitate withdrawals for both U.S. and international users. Users with assets in BlockFi's Wallet can now submit withdrawal requests, allowing the platform to process these transactions. BlockFi Interest Account (BIA) and Loan customers will be able to withdraw some assets starting in early 2024.
Reddit removes moderators accused of insider trading MOON tokens - Reddit's r/CryptoCurrency community has removed two moderators for their alleged involvement in insider trading of MOON tokens. According to Cointelegraph, this action came after at least three moderators' wallets dumped MOON tokens just before the official announcement of the closure of the blockchain-based points program. These moderators were privy to the information an hour before the public announcement, causing the token's value to plummet by nearly 85%. Two of the moderators were able to profit from this, leading to their removal, while three others are currently under investigation.
iSanctuary secures worldwide freezing order via NFT in Singapore - iSanctuary, a British investigative firm, has obtained a Worldwide Freezing Order using NFT technology from a Singapore court. The case began when a businessperson reported the loss of over $3 million in crypto assets after an investment meeting. iSanctuary's crypto investigators swiftly located 95% of the stolen assets, spread across private wallets and centralized crypto exchanges globally. They notified the exchanges and initiated legal action. iSanctuary used a proprietary process, including an NFT created with Mintology, to permanently attach the frozen assets to cold wallets, ensuring they couldn't be transferred. The case is ongoing, with efforts focused on returning the stolen crypto and holding the culprits accountable.
Zero Hash and Shift4 partner to create fiat-to-crypto on-ramp for Web3 - Zero Hash, a crypto infrastructure platform, has teamed up with Shift4, an integrated payments and commerce technology platform, to establish a fiat-to-crypto on-ramp for web3 merchants using Zero Hash's comprehensive API stack. This collaboration offers web3 merchants a unified solution, combining fiat and crypto capabilities, along with secure and compliant identity verification services provided by Zero Hash.
