Crypto Compliance Weekly Roundup | September 11—18, 2023
In today's newsletter, South Korea intensifies its fight against illicit North Korean cryptocurrency funding and plans to strengthen regulations on its OTC market amidst growing concerns of market manipulation and related crimes. Meanwhile, Malta's MFSA is aligning its crypto regulations with upcoming EU MiCA standards, initiating a public consultation to integrate proposed changes effectively. ???? In the Americas, the NYDFS proposes more stringent guidelines for cryptocurrency listings in New York, aiming to mitigate risks and enhance customer protection. ????
Dive in!
Regional Highlights
APAC
???? South Korea Takes Dual Approach: Cracking Down on Illicit North Korean Crypto Funding While Eyeing OTC Market Regulation
South Korea is taking steps to combat illicit North Korean cryptocurrency funding for weapons programs, drafting legislation to track and freeze such assets and address the growing threat of North Korean hackers involved in crypto thefts. Simultaneously, South Korean regulators are considering regulating the over-the-counter (OTC) cryptocurrency market following scandals and allegations of market manipulation, particularly related to the "kimchi premium" trading phenomenon. The largely unregulated OTC market has become a hotspot for virtual currency-related crimes, including fraud and money laundering, prompting calls for stronger crypto regulations, especially for OTC companies used by high-value investors. Additionally, South Korea plans to establish a national cybersecurity committee to bolster defenses against foreign hacking attempts, strengthening its overall cybersecurity framework.
EMEA
???? Malta Consults Public on Aligning Crypto Regulations with EU MiCA Standards
On September 18, Malta's Financial Services Authority (MFSA) initiated a public consultation on proposed changes to its regulatory framework for cryptocurrency companies. The MFSA aims to align its rules for crypto exchanges, custodians, and portfolio managers with the European Union's Markets in Crypto Assets regulation (MiCA), set to take effect in 2024. This move seeks to facilitate a seamless transition for Virtual Financial Assets (VFA) Service Providers in Malta, as the country is an EU member. MiCA is considered the world's first comprehensive crypto regulation in a major jurisdiction, enabling service providers to operate throughout the EU with a single license. With its advanced legal framework, Malta is positioning itself alongside countries like France and is home to prominent crypto firms like Crypto.com and OKCoin. The consultation period is open until September 29th.
AMERICAS
???? NYDFS Proposes Stricter Oversight for Cryptocurrency Listings in New York
New York's financial regulator, the NYDFS, has proposed stricter oversight for cryptocurrency firms looking to list coins in the state. The proposed guidelines require crypto firms to meet higher standards in assessing risks such as fraud and price manipulation and ensuring adequate liquidity for customer demand. Firms would also need to create and submit a coin-delisting policy, with NYDFS approval required before any self-certification of coins. The goal is to enhance safety, protect customers, and strengthen regulatory controls. Public input on these proposals will be accepted until October 20th.
Thread of the Week ??
Reads & Listens ??
Elsewhere ??
More from Notabene