Cryptocurrency has long been associated with a perception of being completely unregulated, fostering an environment of uncertainty and skepticism. However, we are here to shed light on a crucial aspect that dispels this myth: cryptocurrency regulation.
In the past four years, a significant shift has occurred globally, with countries taking proactive steps to introduce
regulations that cover various aspects of the cryptocurrency landscape. From anti-money laundering and consumer protection to market conduct and prudential requirements, regulators worldwide have been working diligently to establish robust frameworks to govern the crypto industry.
One noteworthy development in this regard is the 2019 issuance of
global standards by the intergovernmental Financial Action Task Force (FATF) for combating illicit finance. These standards call for cryptocurrency businesses to adhere to AML/CFT (Anti-Money Laundering/Counter Financing of Terrorism) requirements, including customer due diligence, transaction monitoring, and retention of certain transaction information under the "Travel Rule."
The impact of FATF's global standards is evident in the proactive actions taken by several countries. For instance, Singapore's Monetary Authority of Singapore (MAS) regulates digital payment token (DPT) service providers under the 2019
Payment Services Act, aligning with AML/CFT requirements. South Korea has also regulated virtual asset service providers for AML/CFT purposes since 2021, while Australia is updating its AML/CFT rules to further align with the FATF standards.
In the United States, crypto businesses qualifying as money services businesses (MSBs) are mandated to comply with AML/CFT requirements under the Bank Secrecy Act. This inclusivity covers various crypto businesses, including exchanges, ATMs, brokers, and custody providers, ensuring the implementation of comprehensive AML/CFT programs.
Beyond AML/CFT, the U.S. government has intensified its focus on cryptocurrency in recent years. In 2022, President Biden signed an Executive Order on Ensuring Responsible Development of Digital Assets, setting objectives to strengthen America's global leadership, ensure financial stability, prevent illicit activity, and protect national security. This proactive approach also involves taking the lead in central bank digital currency (CBDC) research and development.
Similarly, in 2022, the EU parliament passed the Markets in Crypto-assets (MiCA), marking the first comprehensive legislation in the region for regulating digital assets. The United Arab Emirates (UAE) launched its
Virtual Asset Regulatory Authority (VARA) in 2022, rolling out a comprehensive set of regulations and rulebooks covering seven types of virtual asset activities.
While there may still be uncertainties in some parts of the world, these examples demonstrate a clear trend:
the global market is moving steadily towards more regulatory clarity in the realm of cryptocurrency. Regulators, governments, and financial institutions are recognizing the importance of establishing a secure and transparent environment for the rapidly evolving crypto landscape.
As professionals in the financial and legal sectors, it is crucial that we keep ourselves abreast of these regulatory developments.
We understand the significance of compliance in navigating the complex world of cryptocurrencies, and our expert team stands ready to assist you in ensuring your clients' interests are well-protected.
Let us embrace these regulatory advancements with optimism and dedication, understanding that they pave the way for a stronger and more reliable crypto ecosystem. As we continue to collaborate and explore the possibilities of blockchain and digital assets, I am excited to witness the growth of a regulated and responsible crypto space.
For more information,
contact Turning Numbers today!
