Monday, 25 September 2023

We are shifting our daily news to Gutzy.Asia Support us there!

Europe takes lead over US on crypto regulation

ZUG, SWITZERLAND — Born out of the desire to create a decentralised currency not controlled by a government, the crypto movement has long resisted regulation.

But those days may be numbered as the EU recently adopted comprehensive rules regarding crypto assets, taking a lead over the United States, which has meanwhile cracked down on two major crypto exchanges.

In April, the European Parliament adopted by a wide margin the Markets in Crypto-Assets (MiCA) regulation and it received final approval by the Commission last month.

The first comprehensive regulation of the sector, MiCA aims to reduce illegal practices including money laundering as well as protect investors and consumers.

It covers issues of crypto assets as well as trading venues and providers of the “wallets” where investors hold their assets.

“MiCA brings clarity, said Jerome Bailly, vice president of Crypto Valley, an association which supports the crypto industry in Switzerland.

“We’re no longer in the Wild West era and what everyone wants in the industry is the rules of the game,” he told AFP at an event supporting startups.

Bailly said that while everyone was initially hostile towards MiCA, “finally it has become a selling point for Europe” as it fixes a clear framework for companies which can then organise their business operations accordingly.

He believes a “European bloc” will emerge, with the Britain and Switzerland following the EU’s lead to create a regulatory zone.

US litigation fears

On the other hand, “the signals coming from the United States are clearly negative,” Bailly warned.

US crypto firms were weakened by the failures of Signature Bank, Silvergate and Silicon Valley Bank, which were key institutions in financing of the larger tech sector and startups.

Plus, US authorities have begun to turn the screws on the sector since the failure of the FTX and Genesis exchanges, charging the world’s top cryptocurrency exchange Binance with securities law violations, as well as its rival Coinbase.

In February, the California-based exchange Kraken received a large fine from the Securities and Exchange Commission, which regulates trading in securities, for not having registered its services.

The US regulatory uncertainty is a difficulty for companies, said Bailly, as debate rages in the United States whether the crypto should be treated as financial assets and therefore be regulated by the SEC, or whether they should be considered as commodities and therefore overseen by the Commodities Futures Trading Commission (CFTC).

“We see that a lot of companies are fleeing the US for Europe,” said Thomas Naegeli, a lawyer based in Liechtenstein, with more and more European firms staying away until it becomes clear who is responsible for regulating the sector.

“They don’t get clear answers and there’s this fear that they will end up being sued by the regulators,” Naegeli said.

“As an entrepreneur you don’t want to calculate potential litigation cases for decades into your budget.”

‘Openly negative’ attitude

While Europe may be making advances now, the United States remains the biggest market, noted the lawyer, so it is important they resolve the regulatory situation quickly.

“That’s what companies want,” Naegeli said.

At the end of May, Peter Smith, the head of the London-based exchange, lambasted the “openly negative” attitude of some US regulators towards crpyto.

“Thousands of incredibly talented people have left the US to move to other jurisdictions in the past year” for countries with a “constructive” approach to regulation.

“France, Portugal, the United Arab Emirates, Singapore, Hong Kong, London, increasingly and interestingly, have all been very excited to take up the slack that the US has created,” Smith said at the Qatar Economic Forum.

Martin Hiesboeck, head of research at the Uphold exchange, said all the noise was to prompt US authorities to clarify the rules of the game.

“Nobody really wants to leave America,” Hiesboeck said.

“They just want to put out some messages to put pressure and to make sure that American legislators realise that if they do not regulate properly they will lose millions of business, jobs and revenues,” he added.

At the beginning of June, Republican lawmakers submitted a bill which Hiesboeck hopes will serve to open a debate with Democrats on regulating the sector.

“I always say that America sometimes take longer but… they often have better regulation and the world pays more attention to their regulation than anybody else,” Hiesboeck said.


Notify of
Inline Feedbacks
View all comments

Latest posts

Election surprises and certainties: Dissecting Tharman’s presidential win

In the 2023 Presidential Election, Mr. Tharman Shanmugaratnam secured a stunning 70.4% landslide victory, surprising many, including himself. Despite expectations that TKL would win the opposition votes, voters from both camps showed a preference for Tharman's charisma and perceived competency. As Singapore reflects on the outcome, questions arise about the election's fairness and the real implications of Tharman's dominant win.

Volunteer as a Polling and Counting Agent for Singapore’s 2023 Presidential Election

For the upcoming Singapore Presidential Election on 1st September, members of the civil society have spearheaded an initiative to strengthen our democratic fabric. We invite committed individuals to join us as Polling and Counting Agents, standing together for a transparent, fair, and just election. This vote counting exercise, organized by members of civil society, is not specifically in support of Mr Tan Kin Lian, a candidate in the upcoming Presidential Election. It's an exercise in active citizenry. Nonetheless, Mr Tan endorses this initiative, which hinges on his candidacy, championing transparency, and has given permission for the results to be shared publicly.

Reflections from the Centenary: The Legacy of LKY and Singapore’s Future

Gilbert Goh reflects on the LKY centenary event: an inspiring showcase of a leader's global legacy juxtaposed against current challenges, urging Singapore to continue its path of progress.

Lim Tean advocates for Tan Kin Lian: A visionary leader for Singapore’s Presidency

In his speech at Mr Tan Kin Lian's launch of his presidential bid, Mr Lim Tean passionately championed the need for a truly Independent President. Highlighting Mr Tan Kin Lian's unique credentials and genuine concern for the wellbeing of Singaporeans, the Peoples Voice leader emphasized the pressing challenges of rising living costs and job insecurities faced by the public. Mr Lim depicted Mr Tan Kin Lian as a beacon of hope for the nation, advocating for a leader who genuinely understands and represents the people’s aspirations.

Tan Jee Say endorses Tan Kin Lian for President: A courageous, genuine, and humble...

In advocating for a truly representative leader, Tan Jee Say underscored Tan Kin Lian's humility, courage, and genuine dedication. Highlighting the pressing need for restored public trust and effective independence, Tan Jee Say emphasized that Tan Kin Lian, as the 'People's President', would bring back hope to Singaporeans and champion true democracy

Tan Kin Lian’s pledge: Rekindling unity and charting a vigorous future for Singapore

In the press conference to announce his bid for the Singapore presidency, Tan Kin Lian emphasizes safeguarding Singapore's reserves and strengthening public service integrity. Drawing on his 30-year leadership at NTUC Income, he envisions a future with affordable living, accessible housing, and job stability, pledging collaboration with the government for a united nation.

Strengthening Singapore’s political foundations: A call to action by Leong Mun Wai on Singapore’s...

Leong Mun Wai urges Singaporeans to strengthen political checks and balances, emphasizing, 'The best is yet to be for Singapore if we dare to make the right decision in upcoming elections.

Trending posts