Regulatory News
European Union (EU)
EU Council and Parliament reach landmark agreement on stricter AML rules - On January 18, the Council and Parliament reached a provisional agreement on an AML package, aiming to enhance the EU's defenses against money laundering and terrorist financing. The agreement expands the list of obligated entities to include the crypto sector, imposing due diligence measures on crypto-asset service providers for transactions exceeding €1000. Additionally, the agreement introduces measures for beneficial ownership transparency, a €10,000 EU-wide limit for cash payments, and enhanced due diligence for high-risk third countries. The documents will be finalized and submitted to member states' representatives in the Committee of Permanent Representatives and the EP for approval. Upon endorsement, the Council and Parliament must officially adopt the texts prior to their publication in the EU's Official Journal and subsequent enforcement.
ESAs reveal rules for Digital Operational Resilience in EU Financial Sector - On January 17, the European Supervisory Authorities (ESAs), released the first set of final draft technical standards under the Digital Operational Resilience Act (DORA). Aimed at bolstering the digital operational resilience of the EU financial sector, the standards focus on Information and Communication Technology (ICT) risk management, incident classification, and governance of ICT third-party service providers. The regulations, developed based on public consultation feedback, emphasize harmonization, simplification and proportionality in enhancing the cybersecurity and operational stability of financial entities. The completed technical standards have been presented to the European Commission, which will initiate the assessment process with the aim of officially endorsing these initial standards in the upcoming months.
EBA issues pivotal amendments on ML/TF Risk Factors for CASPs - On January 16, EBA issued pivotal amendments on Money Laundering/Terrorist Financing Risk Factors, bringing CASPs into the scope of AML/CFT requirements applied to credit and financial institutions. The brand new Guideline 21 for CASPs highlights high ML/TF risks in crypto transactions involving self-hosted addresses and decentralized protocols/platforms, as well as anonymity-enhancing tools such as mixers and tumblers. CASPs, often reliant on remote onboarding, are urged to implement suitable Customer Due Diligence (CDD) measures, with a focus on anonymity features. The GL focuses on customer business activities involving crypto assets as a risk indicator. The amendments outline key aspects for identifying risks stemming from correspondent relationships involving CASPs. Retail banks are advised to adapt risk management strategies to address crypto-related risks. Guidelines take effect 3 months after the official translation to all EU languages is published on the EBA website.
LATAM
Argentine President Javier Milei warns against socialism, advocates for free market capitalism at WEF - Argentine President Javier Milei, in a powerful speech at the World Economic Forum, cautions the Western world against the perils of shifting toward collectivism. Milei emphasizes the threat of socialism, asserting that such ideologies risk condemning people to poverty. The recently elected economist advocates for a return to free market capitalism as a means to combat economic deprivation.
Argentine president Milei allows provinces to introduce their own currencies, cautions against inflation risks - Argentine President Javier Milei has pledged not to obstruct provinces from launching their own currencies, following a public exchange with the governor of La Rioja province. In an interview, Milei expressed his belief that the market will determine the value of these local projects. However, he cautioned against potential inflation risks associated with the use of "quasi-currencies," warning that those accepting them might face income losses due to inflation in such alternative currencies.
Industry News
European Union (EU)
Gemini expands global presence with French crypto registration - Gemini, a leading cryptocurrency platform, has achieved registration as a Digital Asset Service Provider (DASP) with l’Autorité des Marchés Financiers (AMF), the French financial markets regulator. Following the establishment of their EU headquarters in Ireland in 2022, Gemini is now operational in over a dozen EU countries and more than 70 countries globally. With this French registration, Gemini plans to offer its products to retail and institutional users in France, emphasizing compliance, security and access to a diverse range of cryptocurrencies. The move aligns with the broader trend of the European Union's leadership in fostering innovation within a robust regulatory framework for the crypto industry.
United Kingdom (UK)
Universal Digital Payments Network (UDPN) forms strategic partnership with Digital Pound Foundation (DPF) - The Universal Digital Payments Network (UDPN), a wholesale DLT messaging network facilitating cross-currency payments, has joined forces with the Digital Pound Foundation (DPF) to enhance interoperability across digital currencies. UDPN, founded by Red Date Technology, aims to connect various digital currencies, including stablecoins and central bank digital currencies (CBDCs). The collaboration will explore regulatory developments and involve DPF members in testing 12 pilot solutions, furthering the adoption of emerging technologies in the digital finance landscape.
LATAM
Prometeo raises $13M in funding to propel open banking in Latin America with backing from PayPal and Samsung - Latin American startup Prometeo secures $13M from backers including PayPal and Samsung to drive open banking across the region. Prometeo focuses on a unique approach, using a single API to tackle Latin America's fragmented market, offering services in 10 countries. Challenges abound in a region where financial inclusion needs improvement, but opportunities emerge as open banking gains traction. PayPal and Samsung's strategic backing signals their interest in the potential growth of open banking services in Latin America.
Landmark Bitcoin rental agreement signed in Argentina: Tenant to pay $100 monthly in BTC - In Rosario, Argentina, a groundbreaking rental agreement has been inked between a local landlord and tenant, marking the country's first-ever Bitcoin-based lease. The monthly rent, set at $100, will be transferred through the Fiwind crypto platform, reflecting recent legal amendments by President Javier Milei, who aims to embrace cryptocurrencies as part of economic reform. The move signifies a notable shift in Argentina's approach to crypto integration, following adjustments to rental laws and a decree allowing the use of Bitcoin under specific conditions.
MENA
Dubai Regulator conditionally grants crypto license to OKX, opening doors for regulated VASP services - OKX's Dubai subsidiary has been awarded a Virtual Asset Service Provider (VASP) license by Dubai's Virtual Assets Regulatory Authority (VARA) for exchange services. The license, although currently labeled as "non-operational", is expected to become active in the coming months as OKX fulfills the regulatory requirements. Once operational, OKX Middle East will provide regulated VASP services, including spot and fiat trading services, AED deposits and withdrawals, and spot trading pairs, catering to both retail and institutional users. The collaboration emphasizes the significance of well-defined regulations in fostering responsible growth within the crypto space.
Global News
Reddit plans IPO launch in March - Social media giant Reddit is set to go public with its initial public offering (IPO) in March, marking the first major IPO in the social media sector since Pinterest in 2019. Facing fierce competition from platforms like TikTok and Facebook, Reddit aims to sell approximately 10% of its shares, with a valuation close to $10 billion. The move also tests Reddit users' willingness to support the IPO, following their notable impact on "meme" stock rallies in recent years. The San Francisco-based company, founded in 2005, plans to make its public filing in late February, with the IPO completion expected by the end of March.
Crypto Crime Report: Declines in scams and stolen funds; Surges in ransomware and darknet markets - The Chainalysis team offers insights into the evolving landscape of cryptocurrency-related illicit activities. Despite a significant drop in the value received by illicit cryptocurrency addresses in 2023, with a total of $24.2 billion, there is a nuanced picture. While scamming and stolen funds experienced a notable decline, ransomware and darknet markets saw growth. Additionally, the report highlights the prominence of transactions with sanctioned entities, accounting for a substantial portion of illicit activity. - based on this, propose a title.
