July 27, 2022

Veriscope Weekly Regulatory Recap (July 18 — July 24)

Veriscope Weekly Regulatory Recap (July 18 — July 24)

Thailand, Japan, UK and India take strides towards crypto regulation.

Welcome to another edition of Veriscope’s weekly regulatory recap. Authorities continued stressing the need for tough regulatory measures against digital assets amid a considerable fall in the global crypto market cap last week, too. So, without further ado, let’s dive straight into it.

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Thailand Planning Stricter Crypto Regulations

Thailand’s Securities & Exchange Commission (SEC) is looking to tighten the supervision of crypto asset companies after a significant sell-off in the crypto market resulted in the failure of businesses, leaving retail investors with substantial losses.

Thus, the country’s financial regulator aims to modify the current rules governing the crypto industry, originally passed in 2018.

“The extreme volatility of digital-asset prices has spurred the urgent need for improved supervision,” said Secretary-General Ruenvadee Suwanmongkol. “Our main focus will be to provide more protection for small investors, some of whom are putting most of their savings into these assets.”

Plans to increase crypto oversight come as the SEC looks into potential losses among the public following Zipmex Ltd., one of the country’s regulated crypto exchanges, and its regional parent’s announcement of halting withdrawals.

Amidst the talks around the tougher stance of the country’s financial regulator towards digital assets, Thailand’s oldest lender and Siam Commercial Bank’s parent company SCB X has indefinitely delayed a $487 million bid to acquire a 51% stake in the country’s largest local crypto exchange Bitkub.

Visit here to read more: https://www.bloomberg.com/news/articles/2022-07-21/crypto-asset-platforms-to-face-stricter-regulations-in-thailand?sref=TBDibEcD

Japanese Authorities are Seemingly Dissatisfied with Country’s Crypto Self-regulation Body

The Japan Virtual Currency Exchange Association (JVCEA), the self-regulatory body for the country’s crypto industry, is coming under fire from Japan’s financial market regulator, the Financial Services Agency (FSA).

JVCEA is reportedly criticized for poor governance, lack of skilled staff, and slow implementation of crucial Anti-Money Laundering (AML) regulations.

The FSA recently held a meeting with the association where it raised questions on JVCEA’s decision-making process and the responsibility of the board members.

Not long ago, JVCEA, founded in 2018 during the bear market, also came under pressure from the Prime Minister of Japan, Fumio Kishida, who required the body to review its token listing screening criteria.

Read more here: https://cointelegraph.com/news/japan-s-crypto-self-regulation-experiment-not-working

The UK to Boost Crypto Regulation

The UK’s Financial Conduct Authority (FCA) is set out to strengthen cross-border crypto asset regulation and use a data-led strategy to mitigate the risks of digital platforms.

Nikhil Rathi, the chief executive of the UK’s financial regulatory body, pointed to the FCA’s Digital Regulators Cooperation Forum, which plans to take a more proactive stance and intervene swiftly whenever risks related to financial crime are identified.

FCA plans to “deepen ties on crypto regulation and market developments” with US regulators as part of its regulatory approach to crypto.

The comments came after the UK, US, and Singapore launched the International Organization of Securities Commissions (IOSCO) taskforce on DeFi and crypto market integrity risks earlier this month.

“We are demonstrably supporting responsible use cases for the underlying technology while ensuring it is not at the expense of appropriate consumer protection or market integrity,” said Rathi.

Since 2020, the FCA has only approved 35 crypto firms out of 273 that applied for registration with the agency under AML regulations.

Read more here: https://complyadvantage.com/insights/fca-chief-outlines-data-led-strategy-highlighting-crypto-concerns-and-regulator-reform/

India’s FM Calls for a Global Framework on Exchange of Information Around Crypto Assets

Nirmala Sitharaman, India’s Finance Minister, called for a worldwide framework for crypto and urged the other G20 nations to integrate crypto into the “Automatic Exchange of Information” (AEOI).

During her speech at the G20 Ministerial Symposium on Tax and Development in Indonesia, Sitharaman urged nations to look into additional non-monetary resources other than those covered by Common Reporting Standard (CRS) in the AEOI at this time.

She further highlighted a study by the Ministry of Finance that revealed that “tax evaders often set up numerous layers of entities to conceal their unaccounted assets.”

Read more here: https://bfsi.eletsonline.com/sitharaman-calls-for-bringing-crypto-under-the-automatic-exchange-of-information-structure/


Although the crypto market was experiencing a rebound of sorts last week, surpassing one trillion market cap once again, the surge was a short-lived one as the market started reacting negatively to Tesla’s decision to offload 75% of its Bitcoin holdings, among other factors.

The regulatory landscape remained heated, too, with India and Thailand joining the action. This makes it clear that there’s no stopping the regulatory onslaught. Thus, crypto asset service providers (CASPs) must remain prepared to comply with various regulations, starting with the FATF’s Travel Rule. It is the first piece of global regulation aimed at the digital assets market.

All that CASPs need to begin complying with the Travel Rule is a Travel Rule Solution (TRS), and Veriscope is an undisputed leader in this market.

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