Weekly Crypto Policy News March 19 2022

A Win for Bitcoin and Proof-of-Work in Europe

The week began with the EU rejecting the inclusion of a provision in the Markets in Crypto Assets (MiCA) regulation that could have essentially led to a de-facto ban on bitcoin and other proof-of-work cryptocurrencies in European Union member states.

A majority of the EU’s Economic and Monetary Affairs Committee voted against the following wording:

“Crypto-assets shall be subject to minimum sustainable environmental standards with respect to their consensus mechanism used for validating transactions, before being issued, offered or admitted to trading in the union”.

Read more on this story here.

ECB Call for Experts on Digital Euro

Also in Europe, on March 17 the European Central Bank (ECB) sent out a request for experts to take part in online technical talks to explore options for the design of a central bank digital currency.

This is part of what the ECB has called the “investigation phase” of their digital euro project. In October 2021, the bank announced it would begin considering what a digital euro would actually look like, and how it would be delivered to the public and retailers. This phase is expected to last up to two years.

Canada Partners with MIT on CBDC

Earlier this week, the Bank of Canada announced that it would be partnering with MIT to develop a central bank digital currency. At this point, the partnership is exploratory and the Bank of Canada said there’s no commitment to developing a Canadian CBDC.

Read more here.

UK Regulator Shuts Crypto ATMs

At the end of last week, the Financial Conduct Authority (FCA), issued warnings to companies operating crypto ATMs in the UK. The FCA requires anyone operating a crypto ATM to be registered and comply with UK Money Laundering Regulations (MLR). Since no registered firms are currently approved to provide ATM services, the FCA warned them they must cease operating or face enforcement action.

Read more.

Ukraine Signs Crypto Bill into Law

Also this week the Ukrainian President signed a crypto bill into law. The new law sets up a regulatory framework for cryptocurrencies in Ukraine. It also:

• Appoints the National Bank of Ukraine and the National Commission on Securities and Stock Markets as the competent authorities that will oversee the framework
• Establishes a registration process for companies who wish to provide crypto services in Ukraine
• Allows banks to open accounts for crypto companies.

The Ukrainian government said that the new law is an important step in bringing the crypto sector in Ukraine “out of the shadows”.

Elizabeth Warren Tables Digital Asset Sanctions Compliance Enhancement Act

US Senator Elizabeth Warren, along with a number of other senators, introduced the Digital Asset Sanctions Compliance Enhancement Act. If passed, the law would allow the US President to apply secondary sanctions to foreign crypto firms doing businesses with sanctioned individuals or entities. It would also give the Treasury powers to prohibit US crypto exchanges from processing transactions linked to Russia, as well as requiring US taxpayers to report “off-shore” crypto holdings of $10,000 or more to FinCEN (the Financial Crimes Enforcement Network).

The bill is intended to prevent the evasion of sanctions using cryptocurrencies.

Warnings to Crypto Exchanges to Comply with Russia Sanctions

Both the UK and Japan also issued statements this week regarding cryptocurrencies and sanctions. The Japanese Financial Services Agency and the Ministry of Finance issued a joint statement on March 14 warning crypto exchanges that they would be subject to penalties if they failed to comply with any Russia-related sanctions, including the reporting of suspicious transactions to sanctioned individuals or businesses.

In the UK, the government emphasized that sanctions do not differentiate between cryptocurrencies and other types of assets, and the use of crypto to evade sanctions is a serious offense.

Meta Sued for Misleading Crypto Ads

Finally this week, Meta (Facebook’s parent company) has been sued by the Australian Competition and Consumer Commission (ACCC) for allowing misleading crypto ads to be displayed on its platform. The Facebook ads in question featured fake endorsements from high-profile Australian business personalities. The ACCC claims that Meta did not take adequate steps to prevent publication of the ads “even after the celebrities reported similar false, misleading or deceptive ads to Meta.”