Welcome to the Crypto Compliance Weekly, where we highlight crucial regulatory updates across the globe.
In this week's newsletter, ???? US lawmakers challenge the SEC on crypto asset regulation, ???? China revises anti-money laundering laws focusing on virtual assets, ???? ESMA seeks feedback on MiCA guidelines, including reverse solicitation and financial instrument classification.
- China is undergoing significant amendments to its Anti-Money Laundering (AML) laws, with Prime Minister Li Qiang leading discussions on the revised draft on January 22, 2024, marking the first major update since 2007. The overhaul aims to address the evolving landscape of financial crimes, particularly with the rise of virtual currencies.
- The revised draft includes measures for financial institutions to assess risks related to new technologies and products. However, operational guidance for dealing with virtual asset-related crimes, like seizure and freezing, remains lacking, leading to enforcement challenges. Improvements in judicial relief mechanisms are also necessary to protect individuals and businesses from unintended consequences of AML actions, such as account freezing.
- Establishing a robust financial intelligence network is another priority, requiring strategic enhancement based on current and future governance needs.
- The
European Securities and Markets Authority (ESMA)
has released two consultation papers seeking feedback on guidelines related to crypto-assets under the Markets in Crypto Assets Regulation (MiCA).
- The first paper focuses on reverse solicitation, emphasizing that third-country firms offering crypto-asset services must adhere strictly to MiCA regulations. The second paper addresses the classification of crypto-assets as financial instruments, aiming to establish clear criteria aligning with MiFID II and ensuring consistency across the EU.
- These guidelines aim to provide clarity while avoiding a one-size-fits-all approach. Stakeholders are invited to provide comments by April 29, 2024, with ESMA expecting to publish a final report in Q4 2024 after considering the feedback received.
- U.S. lawmakers have introduced a resolution to revoke the SEC's Staff Accounting Bulletin 121 (SAB 121), which imposes restrictions on banks holding their clients' cryptocurrency assets.
- This bulletin mandates that banks reflect the value of crypto assets on their balance sheets, leading to increased capital requirements. Lawmakers argue that this rule inhibits regulated banks from acting as crypto custodians and unfairly treats crypto holdings differently from other assets.
- Following a Government Accountability Office (GAO) finding, there are concerns about the enforceability and impact of SAB 121, with critics calling for greater regulatory clarity and public input. SEC was criticized for issuing SAB 121 without proper consultation or adherence to regulatory procedures, emphasizing the importance of congressional oversight in regulating the SEC's actions.
Great overview of recent crypto compliance news ?? As Steve Jobs said "Innovation distinguishes between a leader and a follower." Let's continue to lead by staying updated with relevant regulations and guidelines. The world of crypto never sleeps??? #cryptoenthusiast #innovationisthekey Follow us!