MICA to RegRally: The Crypto Guide - Global, October 2024

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ECOVIS ProventusLaw brings you a newly curated selection of global crypto news and updates from the digital currency markets. It provides viewers with a look at what’s ahead and high-profile insights from the ever-changing crypto industry worldwide.

AMERICAS

United States seizes more than $6 Million in alleged proceeds of a Crypto-Confidence Scheme

The United States seized over $6 million worth of cryptocurrency from perpetrators overseas. The perpetrators in Southeast Asia targeted one or more individuals in the United States and fraudulently obtained millions of dollars worth of cryptocurrency through a cryptocurrency confidence investment scheme. The FBI traced victim funds on the blockchain and located multiple cryptocurrency wallet addresses, still holding victim funds totalling more than $6 million. Read more

SEC Charges Flyfish Club, LLC for Unregistered Offering of NFTs

The Securities and Exchange Commission today charged Flyfish Club, LLC (Flyfish) with conducting an unregistered offering of crypto asset securities in the form of non-fungible tokens (NFTs) that raised approximately $14.8 million from investors to finance the construction and launch of a private members-only restaurant called Flyfish Club. It has to be noted that FlyFish has settled with the SEC. Read more.

FBI warns of North Korea targeting crypto industry

The FBI announced the publication of its Cryptocurrency Fraud Report for 2023. The announcement asserts, “In 2023, the FBI’s Internet Crime Complaint Center received more than 69,000 complaints from the public regarding cyber-enabled crime and financial fraud involving cryptocurrency, with over $5.6 billion in reported losses.” In addition to providing complaint statistics, the report offers guidance for cryptocurrency scheme victims. Read more.

Consumer Advisory: Video games are targeting your children to get into your wallet

The Consumer Financial Protection Bureau (CFPB) issued an advisory statement on video game payments, including virtual currencies in online games, stating that video game companies use design tricks and in-game currencies “to conceal the real costs of transactions in-game.” Read more.

SEC settles with eToro crypto trading platform. 

The SEC announced that eToro USA LLC has agreed to pay $1.5 million to settle charges, claiming that it operated an unregistered broker and clearing agency in connection with its trading platform that facilitated buying and selling certain crypto assets. Read more.

Consumer protection watchdog warns about Tether's reserves

According to the S&P Global ratings agency, Tether scored a 4 out of 5 on its stability assessment, with 5 being the worst rating. Read more.

Federal Court denies motion to dismiss SEC allegations against Kraken.

The US District Court for the Northern District of California denied the motion to dismiss filed by Payward, Inc. and Payward Ventures (d/b/a “Kraken”) in a lawsuit filed by the SEC alleging that Kraken operates as a broker, dealer, exchange, and clearing agency for crypto asset securities without proper registration. The court found that “the SEC has plausibly alleged that at least some of the cryptocurrency transactions that Kraken facilitates on its network constitute investment contracts, and therefore securities, and are accordingly subject to securities laws.” Read more.

CFTC issues an order against Uniswap for illegal digital asset derivatives trading.

The Commodity Futures Trading Commission (CFTC) announced it issued an order filing and settling charges against Universal Navigation Inc. (dba Uniswap Labs) for illegally offering leveraged or margined retail commodity transactions in digital assets via a decentralised digital asset trading protocol. Read more.

California court upholds daily transaction limit for crypto kiosks.

The California Department of Financial Protection and Innovation (DFPI) announced that the Superior Court for Los Angeles County upheld the state Digital Financial Assets Law’s consumer protections for users of crypto asset kiosks or bitcoin ATMs. Read more.

SEC fines investment advisers for holding crypto assets outside a qualified custodian

The Securities and Exchange Commission today announced settled charges against Florida-based Galois Capital Management LLC, a former registered investment adviser for a private fund that primarily invested in crypto assets, for failing to comply with requirements related to the safeguarding of client assets, including crypto assets being offered and sold as securities. Read more.

FBI San Diego Seizes Cryptocurrency Recovery Websites

Special Agents with the FBI San Diego Field Office have seized websites belonging to three cryptocurrency recovery services. The seizures come as the FBI continues to crack down on an emerging scam tactic aimed at further defrauding cryptocurrency scam victims. Read more.

California passes bill to prohibit unauthorised AI replicas of the deceased

California’s Senate passed Assembly Bill 1836, prohibiting unauthorised AI-generated replicas of deceased personalities without prior consent to protect performers’ rights and likenesses. Read more.

AI may lead to inflationary pressures: Bank of Canada

Bank of Canada Governor Tiff Macklem said that investments in artificial intelligence may lead to higher inflationary pressures in the short term and cause financial stability issues. Read more.

ASIA

Japan’s Financial Regulator Mulls Taxing Crypto as Financial Asset

Japan's Financial Services Agency said it may be worth taxing crypto as a financial asset. The country currently taxes crypto profits as income, which can result in a 45% tax rate for high earners. Read more.

India leads in crypto adoption for second straight year, report shows

India led the way in the global adoption of cryptocurrencies for the second straight year as investors braved the country's tough regulatory stance and steep trading taxes. Read more.

Hong Kong prepares AI guidelines for the finance sector

By introducing new policies, Hong Kong authorities aim to increase the use of AI in Hong Kong’s traditional trading, investment banking and cryptocurrency markets. Read more.

South Korea Warns Crypto Firms as $4 Million Threshold Risks Life Sentence

South Korea's financial regulator is ramping up oversight of the virtual asset market. It is warning of severe consequences for illegal transactions just two months after implementing new protective legislation. Cryptocurrency scammers can now serve life sentences behind bars if their illegal operations exceed $4 million. Read more.

South Korea to Tackle Crypto Insider Trading with Legal Amendment

South Korea’s lawmaker proposes to broaden the definition of “improper solicitation.” The proposal seeks to include cryptocurrencies and insider information sharing under the term. The lawmaker aims to erase the regulatory gap and ensure equal treatment of financial benefits, including crypto. Read more.

Hong Kong to align crypto OTC derivative rules with European standards

Two top-level Hong Kong financial regulators have co-announced their intent to adopt reporting requirements set by the European Securities and Markets Authority (ESMA) for crypto over-the-counter (OTC) derivatives. Read more.

Turkish Capital Markets Board publishes new regulations for cryptocurrency exchanges

The Capital Markets Board (CMB) has announced a significant set of regulations in the cryptocurrency space. These regulations entered into force with the amendments to Capital Markets Law No. 7518. They were announced per the framework determined by Temporary Article 11 added to Capital Markets Law No. 6362. The new regulations cover many issues, from the operation of crypto asset platforms to customer rights protection. Read more.

Turkey’s $200 limit on cash payments: What does it mean for crypto?

Should the Turkish government pass new amendments, all cash payments above $205 would be subject to fines of 10%. Read more.

MIDDLE EAST

Qatar Financial Centre Issues Digital Assets Framework

The Qatar Financial Centre Authority (QFCA) and Qatar Financial Centre Regulatory Authority (QFCRA) have announced the launch of the QFC Digital Assets Framework, a comprehensive and innovative regime for creating and regulating digital assets in the QFC. Read more.

SCA and VARA set the regulatory framework for the UAE’s virtual assets sector in a boost to the country’s global position in the field

UAE regulators to allow Dubai-licensed VASPs to service the entire country. The agreement between UAE regulators covers the mutual supervision of crypto providers, penalty imposition, information exchange and employee training. Read more.

AFRICA

South Africa Leverages AI to Track Down Tax-Dodging Crypto Traders

The South African government is tightening its grip on cryptocurrency trading. Tax authorities (SARS) are issuing tax notices and clarifying regulations, likely using AI to identify non-compliant traders. Read more.

AUSTRALIA

Australia Introduces Non-Legally Binding AI Framework to Help Shape Future Policy

Australia has introduced voluntary AI safety standards to promote the ethical and responsible use of artificial intelligence. The standards feature ten fundamental principles that address concerns around AI implementation. Read more.

GLOBAL

US, EU and UK sign world’s first international AI treaty

The US, EU and UK have signed the world’s first legally binding international AI treaty, prioritising human rights and accountability in AI regulation. Read more.

Global Experts Advocate for AI Safety and Cooperation

Western and Chinese scientists: AI safety a “global public good”, global cooperation urgently needed. Leading global artificial intelligence (AI) scientists gathered in Venice in September where they issued a call urging governments and researchers to collaborate to address AI risks. Read more.

UN advisory body proposes new measures for AI governance

The United Nations Artificial Intelligence advisory body has released its final report, outlining seven key recommendations to address AI-related risks and governance gaps. The report was released on Thursday and will be presented at a U.N. summit in September. Read more.

IMF staff propose REDI framework to catalyse CBDC adoption

IMF staff members have introduced a high-level four-stage framework emphasising regulation, education, design and incentives to enhance CBDC adoption. International Monetary Fund (IMF) staff members have issued a guide for policymakers and banking institutions on ways to increase the uptake of central bank digital currencies (CBDCs) globally. Read more.

Council of Europe’s Workshop on Cryptocurrencies and Crime Prevention

The Council of Europe's Octopus Project hosted a workshop in Kosovo, focusing on analysing and confiscating cryptocurrencies linked to crime. The workshop gathered experts, law enforcement, and financial institutions to enhance their skills in tracing virtual currencies and aligning regulations with international standards like FATF. Practical sessions included case studies and cross-agency collaboration to tackle virtual currency-related crimes effectively. Read more.

Stay ahead with daily updates on X (formerly Twitter) https://lnkd.in/drEeij-j @EProventuslaw. Let’s navigate the ever-changing crypto landscape together! 🚀

Your experienced advisor,

ECOVIS ProventusLaw.