🌐 The HODL Regulatory Radar | September 20, 2023
Stay ahead of the curve in the world of Web3 with our bite-sized weekly regulatory updates!
US House Financial Services Committee Advances Bills to Block Digital Dollar 🇺🇸
The United States House Financial Services Committee is pushing forward with legislative efforts to thwart the introduction of a central bank digital currency (CBDC). Chairman Patrick McHenry has announced that on September 20, the committee will conduct markups on two bills related to a potential digital dollar, a pivotal step before legislation can progress to the House floor. One of the bills, the Digital Dollar Pilot Prevention Act (H.R. 3712), introduced by Representative Alex Mooney, aims to prohibit the Federal Reserve from initiating CBDC pilot programs without congressional approval. While the Fed has expressed the need for an authorizing law before proceeding with a CBDC, the move to fill technical positions for a CBDC project by the Federal Reserve of San Francisco suggests continued interest in exploring a digital dollar, sparking ongoing debate about its implications for financial privacy and its potential impact on the global relevance of the US dollar.
Chamber of Digital Commerce launches Digital Power Network (DPN) 🇺🇸
Cryptocurrency miners in the United States now have a united voice in Washington through the recently formed Digital Power Network (DPN), an affiliated coalition of the Chamber of Digital Commerce. The DPN, the Chamber's first affiliate, shares a team with the Chamber and is linked to Chamber's Mining Initiative, which introduced the first pro-proof-of-work resolution in the U.S. House of Representatives. This resolution, submitted by Texas Congressman Pete Sessions in March, recognized the crucial role of Bitcoin mining in rebuilding energy independence in the USA. The coalition's mission is to advocate for digital asset mining and influence future energy policies, aiming to champion Bitcoin and blockchain technology to revolutionize energy markets.
UK House of Lords Advances Bill to Confiscate Stolen Cryptocurrency 🇬🇧
The Economic Crime and Corporate Transparency Bill, introduced in September 2022 to combat cryptocurrency-related financial crimes in the United Kingdom, has progressed to its final approval stages in the House of Lords. Now in the last phase, the House of Commons will either accept the proposed amendments or suggest modifications before the bill becomes law through royal assent. This legislative development aligns with the Financial Conduct Authority's (FCA) intent to collaborate with crypto companies to establish a comprehensive regulatory framework. During the review process, amendments were agreed upon to clarify the bill's purpose of targeting monetary gains derived from fraud and other financial offenses. Beyond its crypto-focused provisions, the bill also addresses corporate transparency and overseas business registrations.
Hong Kong Intensifies Crypto Regulation Amid JPEX Fraud Scandal
Hong Kong authorities are taking decisive steps to bolster cryptocurrency market oversight following the arrest of six individuals linked to the alleged fraud case surrounding the unlicensed crypto exchange, JPEX. The Securities and Futures Commission (SFC) had received a staggering 1,400 complaints regarding fraud, withdrawal issues, and declining wallet balances, totaling over HKD 1 billion ($128 million) in losses. In response, Chief Executive John Lee Ka-Chiu announced heightened efforts to educate and inform investors about the importance of utilizing platforms granted SFC licenses. JPEX's troubles escalated as users faced withdrawal restrictions and inflated fees, ultimately drawing the attention of Hong Kong's regulatory watchdog.
Japan Explores New Avenue for Startups with Digital Asset VC Funding 🇯🇵
Japan is set to expand its venture capital (VC) landscape by allowing startups to raise capital through the sale of digital assets, according to a recent report. This new rule aims to integrate digital assets as a legitimate investment option for VC firms targeting emerging crypto startups. Traditionally considered a conservative VC environment, the Japanese market has long faced stringent regulations and risk-averse investment practices. However, this move signifies a significant departure from the norm, adding digital assets to the list of available investment avenues alongside stock options and securities. The Japanese government plans to submit this groundbreaking proposal to parliament next year, further enhancing the nation's position in the global crypto and startup funding landscape. In June, the country passed an investor protection bill with the goal of creating a legal framework for stablecoins, categorizing them as assets tied to fiat currencies.
Philippines SEC Joins Forces with US Counterpart and ADB to Combat Crypto Fraud 🇵🇭
The Philippines Securities and Exchange Commission (SEC) has formed a strategic alliance with the US SEC and the Asian Development Bank (ADB) to intensify efforts against cryptocurrency-related criminal activities. According to a September 15th press release, these three organizations recently conducted an International Organization of Securities Commissions (IOSCO) Investigation and Enforcement Training workshop, designed to enhance their collective capabilities in preventing fraud and scams associated with cryptocurrencies. The Philippine SEC also committed to the IOSCO Multilateral Memorandum of Understanding on crypto crime and sought to enact legislation aligning with IOSCO's standards to strengthen their enforcement powers. While the country's regulatory framework for crypto assets faced delays earlier this year, it is committed to ensuring investor protection in the cryptocurrency space.
Thailand to Impose Tax on Overseas Income, Including Crypto, Starting Jan 2024 🇹🇭
Thailand's Revenue Department has announced its intention to levy personal income tax on foreign income sources, including earnings from cryptocurrency trading, for individuals residing in Thailand for more than 180 days. According to the report from Bangkok Post, this rule is to be effective from January 1, 2024 and aims to close existing loopholes by requiring individuals to declare any income earned overseas, irrespective of its intended use within the local economy. This move represents a departure from the previous policy, where only foreign income remitted to Thailand in the year of earning was subject to taxation. While Thailand's regulatory stance on cryptocurrencies has been stringent, there may be shifts ahead with the recent election of the crypto-friendly Prime Minister Srettha Thavisin, who actively supported a crypto investment management firm and issued its own token through the platform in 2022.
Malta Begins Public Consultation on Crypto Regulations 🇲🇹
In a move to harmonize with the EU’s MiCA regulations, Malta's Financial Services Authority (MFSA) has launched a public consultation over changes in its crypto regulations that will remain open until September 29. The proposed revisions seek to align the rules governing exchanges, custodians, and portfolio managers with MiCA, set to become effective in December 2024. They include the removal of the systems audit requirement for VFA license holders, reductions in capital requirements for specific license holders, and the incorporation of service-specific rules from MiCA into Malta's Virtual Financial Assets (VFA) rulebook. By proactively adapting to MiCA, Malta aims to facilitate a seamless transition for VFA license holders to comply with EU regulations.
Latvia's Central Bank Launches 'Innovation Hub' to Embrace Fintech Advancements 🇱🇻
Latvia, a relatively quiet player in the fintech regulatory arena, is making strides in fostering innovation by establishing its "Innovation Hub”. The Bank of Latvia, the nation's central bank, is quietly positioning itself to assist fintech projects and leverage emerging technologies. While digital currencies remain unregulated in Latvia, in contrast to its neighbor Estonia, the Latvian Personal Income Tax Act subjects cryptocurrencies to a 20% capital gains tax. Despite this, the central bank's Innovation Hub has been actively supporting fintech endeavors over the past five years, serving as a "first entry point" to the Latvian market.
We’re back with full-force. Join us next week for a fresh dose of regulatory updates and insights. Until next time! #HODLon