Regulation
BNY Mellon Urges Ireland to Adopt Crypto Rules Before EU Regulations, Report Reveals – Regulation Bitcoin News
As authorities in the EU are still discussing union-wide cryptocurrency regulations, a major U.S. bank has reportedly lobbied the Irish government to adopt its own rules for the space. BNY Mellon launched its digital asset business in Ireland this year to provide custodian services to institutional investors.
Banking Giant BNY Mellon Calls for Irish Crypto Regulations
U.S. banking corporation BNY Mellon, which established a crypto unit in Ireland this spring, has urged the country’s finance ministry to introduce crypto regulations while the EU rules for the space are still being developed, the Irish press reported. The bank’s digital hub in Dublin was set up to provide depository services for digital assets to institutions interested in cryptocurrency investments.
A report by the Irish Independent unveils that representatives of BNY Mellon met with the Irish Minister of State at the Department of Finance Seán Fleming in May to try to convince the government about the need to adopt national crypto regulations as the European Union’s rules for the sector are still under consideration. According to Fleming’s briefing notes for the department, BNY Mellon stated:
While we recognize that the European Commission’s Crypto Asset Markets (MiCA) proposal aims to create a separate regime for crypto assets at the European level, given the timeframe for this legislative action to come into effect, the national regimes quickly began to fill up the gap within their respective national jurisdictions and we believe Ireland should follow suit.
The Markets in Crypto-Assets Regulation aims to harmonize cryptocurrency legislation across the 27 EU member states with common rules regarding the custody of digital assets, capital requirements for service providers and improved investor protection. These standards should apply to both decentralized digital currencies and stablecoins backed by fiat currencies.
BNY Mellon expects the new regulations to come into force not earlier than 2023. In the meantime, several European countries have moved to introduce their own legislation in recent years. The publication provides an example with the German fund location law which came into effect this summer. Its provisions loosened the rules for a category of institutional funds called ‘spezialfonds’ that can now invest 20% of their portfolios in crypto assets.
“Given the accelerating change happening in other jurisdictions and to meet the changing needs of clients for digital assets, we would be happy to have a clear and comprehensive strategy to create an ecosystem of assets. Attractive digital technologies in Ireland,” the government official has been quoted as saying in the notes while BNY Mellon has declined to comment on the conversations.
Irish media also revealed that the U.S. bank emphasized the importance of securing a talent pool in the country’s crypto and blockchain space that would allow members of the growing industry to deliver this type of services. The financial company further noted that within BNY Mellon, Ireland is competing with Israel and New York for relevant blockchain expertise.
“Developing this talent in Ireland at a pace to meet the expected growth will be a challenge,” the banking group reportedly said. BNY Mellon has maintained presence in the Republic of Ireland in the last 25 years, operating out of offices in the capital Dublin, Cork and Wexford where it has around 1,000 employees, the report added.
With a business-friendly climate and positive attitude towards financial innovation, Ireland has established itself as an attractive destination and a European base for crypto companies and fintech arms of major players seeking access to the common EU market. A number of such businesses have been opening offices there in the past few years and looking to hire professionals. These include well-known names such as crypto exchange Kraken and Goldman Sachs-backed fintech Blockdaemon.
Do you think Ireland will adopt its own crypto regulations before the EU-wide rules are enforced? Tell us in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons, BNY Mellon
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
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Regulation
Popularity of Crypto Investments Makes Case for Regulations, Australian Securities Watchdog Says – Regulation Bitcoin News
High rates of crypto ownership, with purchases often made on advice from Youtube and Facebook, make “a strong case for regulation,” according to the Australian Securities and Investments Commission. The watchdog backs its stance with poll results showing nearly half of retail investors in Australia keep one coin or another.
Australian Securities Regulator Pushes for Rules to Protect Cryptocurrency Investors
Pressure on Australia’s new Labor government is mounting, to put an emphasis on consumer protection as it takes over a task from the preceding conservative government to adopt a regulatory policy regarding digital assets like cryptocurrencies. A years-long study on the matter, initiated by the former cabinet, is yet to answer the relevant questions of whether and how to do that.
According to a survey conducted by the Australian Securities and Investments Commission (ASIC) in November, 44% of over 1,000 retail investors admitted to holding cryptocurrency. The results indicated that crypto is the “second most popular investment after Australian shares,” Reuters noted in a report. A quarter of the polled investors who held digital coins said they were their only investment.
Statistical data suggesting high rates of cryptocurrency ownership in Australia were dismissed last year by a top central bank official who referred to the numbers as “implausible,” the news agency remarks. But ASIC believes they make “a strong case for regulation.”
Another argument for that, besides the high popularity of crypto, is the finding that 41% of respondents sought investment insight online, with a fifth of those polled naming the video sharing platform Youtube and at least one in ten pointing to the leading social media network, Facebook. Only 13% gained their info from a financial adviser or broker.
ASIC Chairman Joe Longo expressed the Commission’s concerns about the large number of participants in the survey who reported investing in what he described as “unregulated, volatile crypto-asset products.” The high-ranking official further elaborated:
There are limited protections for crypto-asset investments given they have become increasingly mainstream and are heavily advertised and promoted. There is a strong case for regulation of crypto-assets to better protect investors.
The survey was conducted in the same month when bitcoin (BTC) and ether (ETH), the two most popular cryptocurrencies, hit record highs, Reuters remarks. The prices of both coins have since dropped by about two-thirds, while the Australian stock market is down about 6%.
Part of the reason for that can be found in interest rate hikes that have likely convinced investors to exit speculative assets. Their retreat helped cause the latest crypto market slump and led to the bankruptcy of a number of businesses built around cryptocurrencies.
The popularity of crypto among Australian investors has attracted the attention of other government agencies as well. Earlier this year, the Taxation Office listed crypto-related profits among several priority areas where efforts are needed to ensure correct reporting. The authority reminded taxpayers they need to calculate any capital gains from the sale of coins and tokens and declare it with their tax returns.
Do you expect Australia to adopt restrictive regulations for cryptocurrency investment? Share your thoughts on the subject in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons, Ms. Li
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
This is a transcribed excerpt of the “Bitcoin Magazine Podcast,” hosted by P and Q. In this episode, they are joined by Dylan LeClair and Sam Rule to talk about the recent Tornado Cash sanctions by the U.S. Treasury.
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Dylan LeClair: Tornado cash is an open-source, Ethereum mixing wallet, like Samourai Wallet or Wasabi (which has already started to become OFAC compliant and blacklisting certain addresses). These are just ultimately a collaborative bitcoin transaction. People call it a coin-mixing solution or whatever they try to call it to try to criminalize it. It’s just a bitcoin transaction; it’s just a collaborative spend. That’s just information. You could make an argument that it’s against free speech in a way, but the State’s not gonna really accept that.
It’s just not a good precedent. The founder, who is just a builder of software is getting potentially canceled because he created something that the U.S government didn’t like and they blamed Korea.
It was pretty ridiculous, but just a pretty important day, in general, and not great for the privacy movement, in general, but we’ve known it’s been coming. We’ve known that it was just a matter of time.
Q: I wanna play devil’s advocate. I’m not asking this question because I think any action is justified, I am just a vehicle to share a different idea. Let’s ignore the Tornado Cash, but let’s say this actually happened to Do Kwon or Mashinsky. Would your feelings be different?
LeClair: Let’s distinguish a fraud, Alex Masinsky, and think what you want about whether Do Kwon was building something in earnest or knew it was all a Ponzi all along. I’m not gonna make that call here. But in terms of what Alex Masinsky and Celsius did, it was fraudulent, so it’s different than someone who’s building software. It’s non-custodial, like Tornado Cash is a non-custodial Ethereum mixer. You send in a transaction — I don’t even know the exact technicals as well as I do with bitcoin and mixing — but you send in eth and it’s a smart contract that executes and mixes it up and you can’t tell what’s the input and what’s the output is the base of it. Sorry if I bundled the response a little. The founder or the creator of this software, Roman Semenov, doesn’t actually touch the eth. There’s this really petty eth versus bitcoin flame war going on, where all this hype around the merge and potentially the .eth Twitter cult will go against the Bitcoin Maximalist Twitter cult. It’s all pretty dumb and I think it’s missing the bigger point that a clamp down is coming.
Whether Ethereum has its merits or is riding on the backs of Bitcoin is anybody’s judge. I align probably more with the Bitcoin Maximalist viewpoint. Screeching that everything’s a scam over the past decade hasn’t really served anyone well or protected anybody. People still go for the scams and so maybe we Bitcoiners should fine tune our message a little bit. Even though I’m pretty bearish on all the other altcoins against Bitcoin over the next year, five years, 10 years.
I think Ethereum is tremendously overvalued at 50% of bitcoin’s market cap, but I think that calling for more regulation into the labeling of Ethereum as a security is just probably the wrong way to go about it. To keep bringing it back here.
Sam Rule: To go back to your question, is it justified if it was some fraudulent activity or Mashinsky or something like that they’re shutting down. I guess it doesn’t really matter. If you do it for one, you’re gonna constantly find the gray area to do it more and more. It just gets back to the point that it’s just two different systems completely and are always gonna be because stablecoin are gonna be larger centralized issuers, no matter what chain, whether it’s Tron or Ethereum that they’re on, they’re gonna run into those issues. They still operate. Stablecoins by definition are a blockchain, dollar version of the financial system that we have today.
I don’t think it really matters in terms of punishment, whether it’s illegal activity or not. Now, when you think in Bitcoin terms and the innovation, what it’s meant to be is that, that you’re gonna have so many conversations. If Bitcoin is successful over the years and has so many issues with trying to shut down rails for all sorts of reasons from the system that the United States has had or where the Western world really has had very strong financial control over that. They’re gonna be losing that power, essentially. They’re not gonna be wanting to give that up in any such way.
Again, it’s just like one, probably very small example, whether I think it was North Korean money laundering, that’s gonna come up and probably many are gonna fight and say, that’s very justifiable to shut that down. It just goes back to the censorship-resistant capabilities of all this and what’s truly censorship resistant and when Bitcoin grows and it scales in these situations, is it gonna prove that it’s really truly censorship resistant? To me, that’s probably the largest risk: How much influence over governments and businesses between blacklisting addresses and trying to shut down some sort of circular economy, how much are they gonna be able to do? How much are the tools on Bitcoin gonna be able to withstand that?
LeClair: I think on this note, it’s pretty interesting. All of the macro craziness we’ve seen over the last year, I’m not just talking about like financially, but the geopolitical tension that’s increasingly being built with the United States and China and all of the sanctioning of Treasury reserves. We’re a long way away from bitcoin being anything from a shortfall asset, a 24/7/365 inverse VIX. S&P ticks down or up, bitcoin is beta on that and it’s just this reflection of the liquidity tied and all that extra speculation sloshing around.
If we do reach this point of bitcoin at $500,000 and it’s equivalent to gold, even bigger than that, bitcoin becomes liquid enough. It becomes the enemy of monies, but not at a level of drug dealers and small speculators, like it was in 2011 and it is now in 2022, but in say however long it takes, it’s gonna be liquid enough for adversarial nations to hold it in their reserves as a treasury [asset].
Bitcoin mining and the reality of the game theory of digital money and “not your keys, not your coins” at nation-state levels. It’s like, it’s not your system. And ultimately, I think the game theory of bitcoin long term is that people, institutions and eventually sovereigns are gonna opt into something where they have the rules in their favor. Whether it’s absolute scarcity, rising production cost and you get to decide that there’s no more than 21 million coins by running your own software. The bet on bitcoin is the bet that people converge upon that because there’s no other alternative. You can’t use USDC and you can’t use USTs (U.S. Treasuries) if you’re Russia or China.
So what if China invades Taiwan, and I’m not gonna pretend and larp here, like I’m some geopolitical expert and know what Xi Jinping’s gonna do with Taiwan. I don’t know, but I do know that the trend of increasing hostility between the biggest institutions and sovereigns on the planet is going to increase and the trust in this international monetary order that has been built up for the last 80 years since Bretton woods … and post-1971, that order became free-float fiat currencies. It’s this experiment; we’re really only 51 years into it. What happens when all of this boils to head and massive competitive basement and fraying of this international monetary order, which we arguably started to see over the last two years at increasing pace and probably in the next three to five? Bitcoin probably is there.
I’m pretty short term bearish. I think equities have a leg down and that we still haven’t seen the biggest volatility event in this financial meltdown, but on the topic of censorship resistance, I think one of the biggest bull cases is thinking about that geopolitical game theory, looking at why gold itself failed as global money and global money between sovereigns at the biggest level. Why that failed and why that trust, that link, that relationship failed and then look into Bitcoin or look into Ethereum, look into USDC and evaluate every asset on the planet in terms of what’s gonna fill this kind of need: this global need for a neutral reserve asset.
My bet, my conclusion is Bitcoin, but that’s me personally. I guess everyone has to make that decision for themselves, but that’s my thesis here.
Authorities in Uzbekistan are restricting access to online crypto trading platforms based outside the country and not registered under its laws. A presidential decree obliges citizens and local companies to only use digital asset exchanges licensed by the government of the Central Asian nation.
Uzbekistan Takes Steps to Prevent Crypto Trading and Custody on Foreign Platforms
Uzbekistan’s National Agency of Perspective Projects (NAPP) has registered a spike in activities of online platforms providing crypto-related services to Uzbekistanis without the necessary license. The regulatory body says these facilitate trading of cryptocurrencies and request personal information without complying with a requirement to have their servers installed in the country.
In a recent statement, the agency pointed out that such platforms “do not bear any legal responsibility for carrying out operations with crypto assets, cannot guarantee the legitimacy of transactions, as well as the proper storage and confidentiality of the personal data of citizens of the Republic of Uzbekistan.” In light of these findings, the regulator has restricted access to their domains.
The announcement highlights that the government of Uzbekistan has made consistent efforts to improve the regulatory and institutional framework in the crypto space. A decree signed by President Shavkat Mirziyoyev in 2018 defined the types of business activities pertaining to digital assets like the mining of cryptocurrencies and the provision of services related to their circulation.
Providers whose activities are subject to licensing include mining pools, cryptocurrency exchanges and depositories, as well as other crypto companies that offer individuals or legal entities services for the purchase, sale, exchange, storage, issuance, placement, and management of crypto assets.
Regulations adopted this past April allow Uzbekistanis and businesses based in their country to acquire, sell, and exchange cryptocurrencies exclusively on domestic platforms, starting from Jan. 1, 2023. NAPP now emphasizes this doesn’t mean local firms and citizens are granted the right to conduct such transactions on foreign platforms before that date.
So far, Uzbekistan has licensed only one cryptocurrency exchange. Operated by the South Korean entity Kobea Group, Uznex launched in January, 2020. Last fall, the National Agency of Perspective Projects issued a warning for Uzbekistani crypto traders to avoid unlicensed exchanges, which leaves them with a single legal option.
The agency has also reminded all residents of the country that they can perform crypto transactions on registered exchanges with the national currency, the som, and sell crypto assets to non-residents for foreign fiat currency. The NAPP urges Uzbekistan’s citizens not to use the services of online platforms that have not obtained a license to operate in the republic and to report them to law enforcement.
Do you expect Uzbekistan to license more cryptocurrency exchanges in the future? Tell us in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons, Felix Lipov
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
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