We're back with another in-depth edition of Veriscope Regulatory Recap. This week, we cover New Jersey’s New York-like crypto regulatory framework, the Indian Finance Minister’s call for global collaboration on crypto regulations, France to turn up the heat against crypto businesses, and Oman to create new crypto regulations. So, let’s dive straight into it.
Following New York state’s footsteps, the state of New Jersey, too, is ready with a crypto regulatory framework of its own.
Introduced in February 2022 and amended most recently last month, the proposed framework goes by the name the Digital Asset and Blockchain Technology Act. And many legal experts believe that the New Jersey law could be more comprehensive than its New York predecessor.
As evident from the draft, the proposed regulation offers directives on what types of persons should engage in a digital asset business activity. It also talks about a licensing system whereby an application for a license under this act has to be submitted through the Nationwide Multistate Licensing System.
Indian Finance Minister recently stressed that a collective global effort is an answer to regulating virtual assets rather than a standalone country trying to control the tech-intensive areas of crypto mining, asset, or transaction.
She also highlighted the country’s efforts to develop a standard operating protocol through detailed discussions with other G20 members.
According to local industry representatives, the need for strong crypto regulations is even higher in India as the country is witnessing the adoption of digital assets at an exponential rate.
Yet, so far, India’s approach towards crypto assets has been that of suspicion and doubt. The government has imposed a 30% tax rate on all crypto income, and on top of that, it does not even allow crypto traders to offset losses against gains.
The new registration conditions for VASPs (read: crypto businesses), scheduled to come into effect in January 2024, will require companies to comply with additional rules on internal controls, cybersecurity, and conflicts of interest.
Expert opinion indicates that new requirements for companies to have resilient and secure IT systems could prove difficult for small businesses and even pose a challenge for regulators when monitoring the market for irregularities.
To date, the text of the regulation is yet to receive approval from the National Assembly.
The new regulatory framework for the virtual asset industry in the Sultanate would be set up by its Capital Market Authority, known as the CMA.
The framework would give powers to CMA to oversee virtual asset activities, VASP licensing, and implement risk identification and mitigation strategies in the virtual asset space. It will also propagate surveillance, enforcement strategies, and mechanisms to prevent market abuse.
CMA will obtain the necessary guidance and advice about setting up the regulations from XReg Consulting Limited and Said Al-Shahry and Partners.
Once approved, crypto assets, exchange services, and initial coin offerings will come under new regulations.
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