EUCI's August Recap

August may have been a quiet month from a regulatory outlook, yet it has been an opportunity for us to participate in activities and important advancements, from the proclamation of new rules by the French Financial Markets Authority to our responses to public consultations on key topics for the industry.

IOSCO Consultation: EUCI and Canadian Web3 Council's Joint Submission

We had a significant collaboration with the Canadian Web3 Council in preparing our public comment for the IOSCO Consultation Report on Crypto and Digital Asset Markets. Our combined response addressed core elements of the crypto domain, providing regulators with advanced, comprehensive recommendations. We have examined a broad array of crypto assets, and our submission emphasises consumer protection, transparency in crypto markets, cross-border cooperation, adaptable regulatory frameworks, and financial stability. Particularly noteworthy is our in-depth exploration and recommendations for NFTs, Stablecoins, and crypto asset lenders.

?? Our response

?? The TL;DR version

EBA Consultation Deadline

On August 31st, the European Banking Authority (EBA) wrapped up its consultation on the updated Guidelines on AML/CFT risk factors, in which we happily participated. In our response:

• We call for postponing the work on the Risk Guidelines due to its interconnectedness with the files from the AML Package that have still not been finalised, namely the revision of the AMLD and the upcoming AML Regulation;
• We also used the opportunity to comment on the need for better and easier access to banking services for CASPs;
• Regarding the contents of the proposed changes to the Risk Guidelines, we call for a more nuanced and case-specific approach when evaluating the risk related to "self-hosted wallets" and peer-to-peer transactions;
• We provided suggestions on the unified approach towards the use of privacy tools - a regulatory trend we find particularly concerning due to the differences in the level of risk posed by the various privacy protocols, apps and coins;
• We also had comments on the consideration of DeFi as posing a higher risk, which we find concerning on two grounds - the low level of AML risk generally posed by DeFi users and the possibility of creating a dual and duplicating supervisory regime towards DeFi in the EU - one related to AML compliance and another tied to the provision of crypto-asset services.

?? Our response

New ground rules from the French Financial Markets Authority for DASPs

In regulatory updates, Autorité des marchés financiers (AMF) – France recently announced new rules for Digital Asset Service Providers (DASPs) earlier this month. These updated guidelines come in anticipation of the new regulation set to take effect on the 1st of January 2024 under the DDADUE Law. This marks a crucial step forward in shaping the digital asset landscape, with the new rules aiming to provide clearer parameters for DASPs and strengthen the overall security and reliability of digital services. For an in-depth understanding, you can refer to the detailed information provided on the AMF's website or read our summary below.

?? Our summary

Events Highlights & Upcoming Events

??? We were thrilled to have our Policy Expert Anja Blaj participating in the Bled Strategic Forum . Watch the recordings on Youtube here.

??? Our panel discussion hosted by TokenEngineering Academy during EthCC Paris is now available to watch here.

??? Be sure to add "How Regulations Can Impact Different Use Cases in the DeFi Industry" at the Prague DeFi Summit to your watch list too. Find the recordings here.

EUCI in the media

?? POLITICO , Morning Financial Services Update

"Technology may allow new market structures and novel business models to evolve and new regulatory approaches may be necessary,” [EUCI and Canadian Web3 Council] said, urging tailoring rules for online collectibles, known as non-fungible tokens (NFTs), stablecoins and crypto lenders. “We encourage more open dialogue and collaboration between regulators and industry members across broad industry sectors before applying the concept of ‘same activity, same risk and same rules’ approach to regulation."

?? Cointelegraph , “EU Data Act smart contract ‘kill switch’ brings uncertainty”: Our Executive Director Marina Markezic shared perspectives and potential roadblocks of the Data Act on the European crypto industry asking:

“Is the regulation even targeted toward DeFi platforms and protocols? [...] It should be clarified under what circumstances the ‘access control’ is provided, what, who, why and how the ‘safe termination or interruption’ measure is triggered and how protocols prevent further abusive behavior thereof.”

?? DL News , "Sports fantasy platform backed by Lionel Messi develops NFT rules with French regulators”: Our collaborative response to the ACPR Consultation Report on Decentralized Finance was mentioned, as we highlighted concerns about regulatory proposals frustrating innovation.

?? Digitalk , "Does Europe need a digital euro?" (in Bulgarian): Our Policy Expert Vyara Savova, LL.M., Ph.D.—to—be unpacked the Digital Euro and key questions about its design and security.

That concludes our August Recap. Thank you for reading and supporting us! If you're curious about a specific activity or have any questions, don't hesitate to reach out to?[email protected].

Team EUCI