August 16, 2022

Veriscope Weekly Recap (August 08 — August 14)

Veriscope Weekly Recap (August 08 — August 14)

Tornado Cash, NFTs and pushback on adoption from the UNCTAD.

Welcome to another edition of Veriscope’s weekly regulatory recap. In a surprising move, the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Tornado Cash, a popular crypto mixing service, last week.

The OFAC’s action was called an unfair and illogical move by many in the crypto industry. So, without further ado, let’s dive into the major events that took place in the crypto regulatory space last week, including the U.S. OFAC’s sanction against Tornado Cash.

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U.S. OFAC Sanctions Tornado Cash

Last Monday, the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned the Ethereum-based cryptocurrency mixer, Tornado Cash.

With this move, the OFAC’s SDN list, which is a list of “Specially Designated Nationals And Blocked Persons” with whom U.S. citizens and organizations are not permitted to conduct business, has been updated to include Tornado Cash.

The U.S. Treasury cited Tornado Cash’s use to wash out money during the $625 million Axie Infinity’s Ronin hack by the North Korean Lazarus Group, the $100 million Horizon Bridge hack, and the $190 million Nomad Bridge hack as justification for this sanction verdict.

Read more here:

Thailand Central Bank to Get More Authority in Crypto Regulation

As per recent reports, Thailand is preparing to strengthen crypto regulation and grant additional powers to the Thai central bank to do so.

Speaking on the current limit to the central bank’s powers, Thai Finance Minister Arkhom Termpittayapaisith stated, “Right now, the central bank has no room to enter into the regulatory framework except for notifying that cryptos are not a legal means of payment for goods and services.”

The talks on strengthening the country’s crypto regulations started gaining momentum after Zipmex, a recognized cryptocurrency and digital token exchange in the nation, paused, allowing withdrawals.

That said, the goal of stricter cryptocurrency restrictions, according to the Thai finance minister, is to give investors greater protection, not to stifle innovation or technology.

Read more here:

EU’s MiCA Law Will Regulate NFT Collections Like Cryptocurrencies

During a panel discussion at Korea Blockchain Week, Peter Kerstens, an advisor to the European Union (EU), provided fresh perspectives on the EU’s efforts to establish comprehensive regulatory frameworks in the crypto and NFT sectors.

According to Kerstens, NFT collections will be treated similarly to cryptocurrencies under the Markets in Crypto-Assets (MiCA) law.

Under this new classification, the EU residents planning to sell NFT collection will be considered crypto-asset service providers (CASPs).

Thus, they will be obligated to obtain express permission from the EU before launching their NFT collection to the general market.

The aim behind these measures is to “protect investors and safeguard financial stability while permitting innovation and encouraging the attractiveness of the crypto-asset sector.”

This procedure is anticipated to take one to three months, with larger CASPs required to mandatorily submit regular reports to the European Securities and Markets Authority (ESMA) on their operations.

Read more here:

UNCTAD Aims to Stop Developing Nations from Embracing Cryptocurrencies

The United Nations Conference on Trade and Development (UNCTAD) published a policy brief outlining solutions for addressing the concerns that cryptocurrency poses for developing countries.

Highlighting the volatile nature of crypto assets, the report reads, “While these private digital currencies have rewarded some and facilitate remittances, they are an unstable financial asset that can also bring social risks and costs.”

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It further cautions that “cryptocurrencies may become a widespread means of payment and even replace domestic currencies unofficially (a process called cryptoization), which could jeopardize the monetary sovereignty of countries.”

Thus, the report urges developing nations to specify cryptocurrency’s legal standing and impose reporting obligations on crypto service providers.

It also suggests global tax coordination regarding cryptocurrency tax treatments, regulation, and information sharing among countries to tackle these challenges.

Read more here:


We can debate all about the morality of the government’s decision of sanctioning Tornado Cash, but this does clarify one thing. The government will crack down against anything remotely illegitimate when it comes to digital assets, no matter even if it means sanctioning a particular use of technology. Thus, complying with government regulations, both national and international, is a must for all VASPs.

The federal rules that VASPs will have to comply with will depend on the countries where they are providing their services. As for the global regulations, the most prominent one that the VASPs will have to comply with or prepare for compliance is the FATF’s Travel Rule. As of now, only a few countries have adopted the Travel Rule, but this may change in the coming days, with global bodies and institutions urging countries to regulate crypto assets on an urgent basis.

Thus, it is in the best interest of Virtual Asset Service Providers (VASPs) to at least prepare for the Travel Rule compliance, even if the country they are based in hasn’t adopted it yet. After all, Travel Rule adoption is just on the horizon. And all a VASP needs to comply with the Travel Rule is a Travel Rule Solution (TRS).

We have the best solution to suggest: Veriscope! Check it out here: and contact our BizDev team for a discussion here:

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