Welcome to another exciting edition of Veriscope Regulatory Recap! In this week's edition, we look at the recent crypto regulation guiding principles published by Abu Dhabi FSRA to the White House's first-ever digital assets regulatory framework. So, without further ado, let’s dive straight into it.
In its new guidelines that define six key principles on which its approach would be built, the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market Free Economic Zone (ADGM) defined its regulatory approach to virtual asset activities.
The agency highlighted four "risk drivers" that need heightened focus, one of which relates to the obligations of virtual asset custodians, even when they contract out work to external parties.
There will also be an emphasis on technology and governance controls that businesses use. The FSRA also plans to examine whether companies adhere to legal obligations when exchanging virtual assets, particularly to ensure that laws intended to safeguard virtual asset investors, such as disclosure requirements, are being followed.
As such, the new guide reaffirms the FSRA's dedication to providing a strong, transparent, and consistent regulatory framework for companies engaging in virtual asset activities, prosecuting regulatory violations, and upholding "high standards" throughout the authorization process.
Read more here:
Recently, Gary Gensler, the current SEC supremo, insisted that any cryptocurrencies that follow the Proof-of-Stake consensus mechanism are likely to be securities.
In his own words, PoS blockchains "might pass a key test used by courts to determine whether an asset is a security."
As for how a distinction is made between crypto, which is a security, and one that is not, courts utilize the Howey test to evaluate it by determining whether an investor expects to make money from owning the respective asset.
This statement from Gensler is pretty significant, considering that it comes at the heels of the successful Ethereum merge rollout, which marks its move from the Proof of Work (PoW) consensus mechanism to the Proof of Stake (PoS).
Interestingly, there were rumors that Gensler wanted to backtrack from the previous SEC stance that Ethereum is a non-security, but he was held back by a lack of sound reasoning to pull this off. That may change now with Ethereum's move to Proof of Stake, as it may very well be the ammo that Gensler needed.
Read More Here: https://www.coindesk.com/policy/2022/09/15/secs-gensler-signals-extra-scrutiny-for-proof-of-stake-cryptocurrencies-report/
The US Department of Justice (DOJ) launched the National Digital Asset Coordinator Network, with over 150 federal prosecutors joining the team. According to the authority, the new network will advance its efforts to counter the growing threat the misuse of digital assets by malicious actors pose to the American public.
According to the DOJ, the DAC Network will be the main venue for prosecutors to receive and disseminate specialized training, technical know-how, and advice on investigating and prosecuting digital asset offenses.
Assistant Attorney General Kenneth A. Polite Jr. of the DOJ's Criminal Division said, "Through the creation of the DAC Network, the Criminal Division and the National Cryptocurrency Enforcement Team will continue to ensure that the department and its prosecutors are best positioned to combat the ever-evolving criminal uses of digital asset technology.
Read More Here: https://www.justice.gov/opa/pr/justice-department-announces-report-digital-assets-and-launches-nationwide-network
The White House published the "First-Ever Comprehensive Framework for Responsible Development of Digital Assets" to enhance regulatory control of the digital asset market.
The crypto framework is pretty detailed and consists of segments on investor protection, safe access to cost-effective financial services, strengthening the financial ecosystem, promotion of responsible innovation, ways to maintain the country's financial competitiveness and leadership, combating illicit finance, and pros and cons of CBDCs.
It also lays the groundwork for regulators like the SEC and CFTC to coordinate among themselves to ensure strict regulatory compliance in the crypto space and build an information-sharing mechanism to keep tabs on consumer complaints.
The White House report further shines a light on "a potential US CBDC," directing the US Treasury to consider the "potential implications of a US CBDC, leverage cross-government technical expertise, and share information with partners."
Read More Here:
After Shyft DAO approved the Veriscope VASP grant proposal, an aggregate of 10,000 SHFT has been granted for Virtual Asset Service Providers (VASPs) that integrate to the Veriscope mainnet by September 30, 2022. The fund will enable VASPs to pay the Shyft Network gas fees while using Veriscope. This offer will remain valid until December 31, 2022, or till the VASP exhausts its SHFT grant.
#2. Transcript: Senator Pat Toomey on the Bad State of Crypto Regulation
#3. Industry reps suggest improvements to the Stabenow-Boozman crypto regulation bill
#4. Report: SEC Accounting Guidance Creates Hurdle for Banks’ Crypto Plans
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