Welcome to another edition of Veriscope Regulatory Recap! We are back with exciting news from the world of crypto regulations this week, from the US Treasury’s decision to warn the White House over digital assets to the latest UK notifications over sanctions compliance to VASPs. So, without further ado, let's dive straight into it.
As per recent reports, the US Treasury Department will alert the White House regarding cryptocurrencies if the federal government doesn't enact significant new crypto laws, given the serious financial risks to US consumers and the economy.
The Treasury intends to release four distinct reports that will showcase the viewpoint of top economic officials towards cryptocurrencies while pitching for strict regulation, according to the Washington Post.
Nirmala Sitharaman, India's finance minister, has urged the International Monetary Fund (IMF) to play "a lead role" in regulating cryptocurrencies while meeting IMF Managing Director Kristalina Georgieva in New Delhi.
Ms. Georgieva, too, agreed, saying that the IMF is prepared to collaborate with India on issues like climate change, cryptocurrency legislation, and other contemporary world problems.
While speaking to CNBC TV18, Ms. Georgieva reiterated that the IMF supports Indian crypto legislation and emphasized the significance of achieving a balance between the advantages and disadvantages after she met with Sitharaman.
She also noted, "India's digital ecosystem is on steroids as cryptos have emerged strongly without regulations. It is important to remember that cryptos are like the wild, Wild West."
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It is now possible to issue units of German investment funds digitally, popularly referred to as Crypto Fund Units, according to the new German Regulation on Crypto Fund Units (Verordnung über Kryptofondsanteile - KryptoFAV).
As for how this will work, a distributed ledger technology (DLT) or blockchain-based decentralized Crypto Securities Register will be used to issue Crypto Fund Units.
The fund's depository will be responsible for maintaining the relevant Crypto Securities Register, but they can alternatively assign this responsibility to a third-party business that is permitted to do so.
Interestingly, German investment funds organized as contractually constituted common funds (Sondervermögen) are subject to the KryptoFAV. However, corporate-organized investment funds are not.
According to new regulations put in place amid growing concerns that sanctioned parties are turning to crypto assets to get around the restrictions imposed in rebuttal to Russia's invasion of Ukraine, the virtual asset exchanges are now required to notify the UK authorities of any suspected sanctions violations.
Official regulations were updated on August 30 to clearly list "crypto assets" as one of the key items that must be prohibited if sanctions are imposed on a person or an entity.
Any Virtual Asset Service Providers (VASPs) that fail to report clients who are subject to sanctions will be in violation of rules set forth by the United Kingdom Office of Financial Sanctions Implementation (OFSI) of Her Majesty's Treasury.
The agency further stated that if "any other payment instruments" and assets, including cryptocurrency, are used with the intention of obtaining funds, goods, or services, it will be a gross violation of the sanctions.
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.
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